It's basically as if the markets are just a replay of 2005-07 at this point. The system can only function with banks, funds leveraged 20-30x on miniscule price volatility and managed markets. Any prolonged volatility just threatens to collapse the system..except this time around, with fewer entities and more concentration of risk, the system cant absorb it.
Denner, I traded through that period (and two decades prior to that i hate to admit but I'm old and slow now) and racked up huge gains as there was two way action. Yeah, overall it went up but there were swings both ways intraday, pullbacks werent just a buck or two before they got bought, they would be down 12 and then you could logically go in and buy a dip. But this does not look right here, when you have day after day of up, with never a pullback of any magnitude. It is almost as if the powers that be will not allow any pullback at all to relieve the constant squeeze that is on. Just last week Trichet basically admitted that it is a policy consideration to favor the longs and never to help the shorts. It was quite a statement for one who is in charge of economic policy. No wonder whats his name resigned.
yep, that cartoon was pretty funny and has continued to be correct in all aspects. i think it was buy the f n dip you retard.
It's a bit funny and sad, but I remember the 2005-07 period (actually should just be amended to 2003-07), and guys were still stuck with the memories of 98-02 and the really good two way volatility, very liquid options markets, good side by side action with electronic vs pits, etc...So, the 03-07 was a letdown for many as the ranges contracted and the movement towards all electronic and less transparency arrived. And definitely going back into the 1990s things were world's apart from now. Nobody really lived under the impressions that if some entity got into deep enough shit that the world would stop to cater to them. I suppose LTCM started us down this road, but that's not entirely true...the Mexican bailout arranged by Rubin is in there amongst other things. There is no question that they've made it abundantly clear that rising stock prices are a policy tool and with far less volume or even interest in these markets, a slow grind higher doesn't even look like it takes much effort or any meaningful resistance frankly.
Since this credit crisis the only way the economic system can function is through Bubble ben bernankes easy money policies along with trillions in stimulus, that is the only reason behind this 100% run since the bottom only 2 short years ago, strip every bit of stimulus and bailout money out of this market and this and there would not have been anything close to a 10% rally off the lows set just 2 years ago. There is no such thing as a free market, they never seem to let the economic cycle take its own course, there is always intervention when things are going south, thats why it leads to the crisis were in now. The longer they keep spending to keep the economy on its feet the more problems this economy will have.
It's not a ponzi scheme, it's a buy the dip scheme! Edit: If you want a non-rigged (at least I think so...) market to trade, you will have to switch from US indices to individual stocks or if you want to trade breadth you will have to switch to European or Asian indices. The CAC40 and Eurostoxx have been a real charm, barely above their April highs as we speak. If there is any meaningful decline (which is now considered 3% or something like that) we would probably see these guys in a range pattern, retreating to the April lows again.