MESSAGE TO DRAGHI…SHUT UP OR QUIT
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Ok…I know many reading this are asking…what’s a Draghi? Who’s Draghi? Well…he is the money mouthpiece for the European Central Bank. And oh yes, he was a Governor for the bank of Italy while Italy was running up deficits. He is the head honcho, top dog, big cheese at the ECB.
Why am I pissed? Simple. I am sick and tired of the constant interference in markets. I am sick and tired of the constant yapping out of these people that somehow have markets waiting breathless. Last week, this man and his cohorts, in a non-stop yap-fest, came out and stated that the ECB was ready. Ready for what? Ready to enact the same stupidity that for whatever reason, the market loves. And that is the same thing Bernanke has been doing…printing money to buy assets in order to lower interest rates, in order to goose spending which would help flagging economies in Europe.
On this noise, markets ripped 500 points in a couple days. On Thursday, a 250 point Dow gap. On Friday, another 200 point love-fest as they wouldn’t shut up all day. My issue is simple. Markets would not have ripped without their words.
I am quite sure Draghi and the rest read the newspapers. For the past few days, every article was about today’s conference where Draghi would speak. Every article and every commentary was about the ECB undergoing serious actions. After all, didn’t they telegraph serious moves to come. Well…what does Draghi do today…NOTHING! Absolutely NOTHING! So…open your mouth several times. Goose the markets…and now disappoint.
Futures have tanked this morning on this non-action. This man and the rest of the ECB are tone deaf. They have been the cause of the problems and they are amazingly, still in power to try and fix the problems.
This manipulation and interference of the markets must stop. Investors have been leaving the markets in droves because of lack of confidence. Yesterday’s screwed up trading just adds to the problem. And now this!
http://www.advisorperspectives.com/dshort/
http://advisorperspectives.com/dshort/updates/Crestmont-PE-Ratio.php
http://advisorperspectives.com/dshort/updates/Q-Ratio-and-Market-Valuation.php
http://advisorperspectives.com/dshort/updates/Market-Valuation-Overview.php
http://advisorperspectives.com/dshort/updates/Secular-Bull-and-Bear-Markets.php
Gary, were stock prices not so overvalued historically and in a zero-sum game of a secular bear market, the central banks and banksters using the NY Fed and their offshore shell companies and pass-through entities to lever up Treasuries and MBS would not be so reactive and so desperate to prop up the market.
Were the natural course of revaluation of equities to be permitted to occur, the S&P 500 would be in the 800s-900s by now on the way to the 600s again, and possibly as low as the 400s-500s at some point, which is the historical precedent for secular bear markets. (Don’t take my word for it, look at the data at the links above.)
Moreover, the secular, once-in-history Boomer demographic drag effects will push all asset prices to lows not seen in 20-25 or more years as the decade progresses. It will be about a return “of” one’s money, not a return “on” one’s money.
Further, one will need to save more, i.e., spend less than one earns, not “speculate” in the stock market, which is not savings but “gambling” when the conditions result in a zero sum, i.e., one gambler wins at the expense of losses for another gambler. That is what the stock market has become since the secular bear began in ’00: a casino in which the house ALWAYS wins.
If one does not work for the casino, one is just another mark for the parastic criminal syndicate casino operators on Wall St. A growing share of the so-called “investing public” is coming around to this realization.
The stock market is a “wealth-transfer” vehicle to those who already own stocks, not a wealth-creating vehicle.
http://www.vestory.com/2011/07/04/fees-matter/
And in a zero-sum casino environment of a secular bear market, what one pays for annual “management” fees REALLY matters.
That anyone is still getting away with charging “savers-turned-unwitting speculators” 2% per year is astonishing.
I was a buy and hold guy until the DOW broke 14,000 in 2007 and then I went all cash. Since then I’ve been all short term trading. Since last summer with all the chattering going on, I hold anywhere from a few minutes to up to a week, which cost me some during the winter rally. I don’t set stops anymore, just mental stops. Probably a month from now I’ll be scalping.
Terry, I admire your chutzpah and agility, but how do you avoid the HFT and PTF snipers routinely gunning for your positions at the speed of light?
Which broker(s) do you use, if I may ask? I’ve tried 2-3 different brokers and market-clearing firms on 2-3 different continents, and I still get routinely sniped.
IMHO the range for this market is that they have to keep the Nas Comp over 2800 and then to get any higher than march they have to get the Nas 100 over 2805. I base this on 50% of the move in both indexes between all time highs and 2002 low. You have to include extended hours to see what I am looking at. You could also say that everything has to stay over the June 4 low but this range thing with the 50% retracement I mentioned is something I spotted and I am sticking to it.