Global Economic Intersection
Advertisement
  • Home
    • 카지노사이트
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
    • 카지노사이트
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

Weekend Market Commentary: Special Edition

admin by admin
July 19, 2014
in Uncategorized
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Written by Gary

Weekend Market Commentary ‘The reason(s) why the markets won’t crash’!

UPDATED: 0845 EST 2014-07-19

When I say crash, I mean the actual average’s numbers will not waterfall as they did in 2008/2009, but experience a slow, methodical decline with occasional pop-ups. This is also true for the continuing upside march of this bull market.

Several years ago I wrote that the mom and pop investors had left the financial stock market after getting slammed in the 2008/2009 bear market, now known as the ‘2009 Global Recession’. The only ones left standing were the investment houses that now held the bulk of equities, outnumbering remaining retail investors and couldn’t sell anyway. But what is this ‘holding’ of securities doing to the markets in today’s financial climate and culture?

This ‘holding’ is creating a stable market that is not likely to fluctuate widely or produce the volatility we saw back in 2008/2009. It will move in ways we have been witnessing for several years before because they are not going to sell, but why?

But there are many reasons why the institutions dare not liquidate large block holdings in any market, bear or bull. More importantly, why would they want to reduce their holdings in the first place? Seriously, where would they invest the cash?

In today’s environmental slow moving financial conditions many, including the large financial concerns, may find themselves solidly in a bear market before they even realize it and may be to late to sell. Let’s look at the basics and see if you agree.

One is the real threat of a World financial collapse. It would certainly happen if the large financial institutions suddenly decided to move to alternative assets along when their panicking retail cousins decide to jump ship. A one hundred dollar a share issue would suddenly be valued a pennies when billions of dollars worth were put up for trading and a lot of folks jumping out of windows.

Another would be their reducing their holdings at their own demise. Assuming they are not up to their arse in debt or extreme liabilities in risky assets as in Lehman Brothers, then these financial behemoths would hunker down and wait out the storm. Selling to cover losses would probably not be the wisest thing to do, at least in large numbers.

The large institutional houses of investment holdings really have no reason to cash in their chips as most are structured to ‘wait out’ dips, corrections and have cash to ‘play’ the dips. Hence, the moderate, minor corrections and slow moving charts we have witnessed the last several years. If need be, they could trade very large blocks in the ‘Dark Pools’ and never cause a ripple in the retail end of the retail markets.

In the meantime, this brings up the reason why the markets will continue to rise in the near future and not ‘crash’ as many have speculated. One reason is that the retail investors, affectionately called ‘Sheeples’ have been buying into the markets lately helping push the averages to new highs with additional help from the HFT algo computers. I expect ‘Sheeple’ buying equities numbers will increase exponentially over the next 12 months as the lure of hidden riches flood their uneducated and unsuspecting minds.

Another is the Feds are finding no urgent need to unwind it bond holdings. As a result this will have a abnormal high supply of accumulative liquidity as explained below. My problem with James thinking (below) is that this ‘liquidity’ issue is it will run out sooner than two years, much sooner in fact.

James A. Kostohryz writes, “This process (liquidity preference ) could take one to two full years to fully run its course”. In his article below he explains how the markets are posed to shoot the markets higher after QE ends which could be the ‘last straw’ breaking the bull’s back.

QE To Propel Market Treacherously Higher After Taper Ends

Summary

  • After the taper: Abnormally high supply of accumulated liquidity + normalization of liquidity preference = surging asset prices.

  • Almost by definition, the taper will end just as risk aversion and liquidity preference have barely begun to normalize.

  • In this context, stock prices will probably rise sharply for 1-2 more years, but with valuations already stretched, this will be an unprecedented and treacherous time in US history.

We mentioned above the Fed has no immediate need to unwind their bond holdings and that will also contribute to the continuing bull run.

Why U.S. Stocks Will Keep Powering Higher

Summary

  • The Fed has no urgent need to unwind its bond holdings, and good reasons not to do so. The central bank is banking on inflation to inflate away the problem.

  • In such settings, the stock market will continue to march upward and onward thanks to the ample liquidity.

  • Which, in a nutshell, explains why the Fed is tough on banks: To keep speculative excesses and imbalances from having systemic consequences in this golden age of liquidity.

Below Cam discusses the euphoria of the collective conscious of the ‘Sheeple’ and why they are buying into the markets and will continue to do so.

The ‘Good’ Stock Market Mania

Cam Hui, CFA

Recently, there have been a number of bearish warnings about the equity markets. No doubt there have been signs of froth, but how much frothier can the stock market get? Cutting to the chase, my conclusion is we are seeing the initial stages of a stock market mania and that it will have a lot longer to run.

Just as my former colleague Walter Murphy termed “good overbought” to describe overbought conditions in an uptrend, I believe that we are seeing the start of a “good” stock market mania.

The markets will eventually experience a decline, enter a bear market and then what do these institutions do. What will the ‘Sheeples’ do? Will it be different this time?

As a closing thought, the markets won’t ‘crash’ for many of the above reasons (and more), nor shoot up like they used to do, instead they will melt up and down slowly as they have been doing. So don’t look for a ‘Shooting Star’ candle to signify anything as it won’t happen – not now anyway. For that to happen we need a new large crop of ‘Sheeples’ to be sheared.

Your opinions are welcome and would love to hear from you.

(Follow Closing Market Averages at end of this article)

WTI oil closed Friday at 102.98 (down -0.36 -0.35% )

Brent oil closed Friday at 113.21 (down -0.04 -0.03% )

The Demon The Gold Bears Are Mistakenly Overlooking

Gold closes lower for a weekly loss of 2%

Gold closed Friday at 1309.10 (down -7.80 -0.59% )

Copper closed Friday at 3.188 (down -0.038 -1.19% )

If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the ‘Follow‘ button. Write me with suggestions and I promise not to bite.

Friday’s Closing Market Numbers

Leading Stock Quotes powered by Investing.com

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

[email protected]

Written by Gary

Previous Post

Are Interest Rates Too High To Stimulate the Economy?

Next Post

Infographic of the Day: The Cheapest States To Buy A Car

Related Posts

Unlocking the Future: Google's Game-Changing Move to Advertise NFT Games Starting September 15th
Business

Unlocking the Future: Google’s Game-Changing Move to Advertise NFT Games Starting September 15th

by John Wanguba
September 8, 2023
Bitcoin Is Finally Trading Perfectly Like 'Digital Gold'
Economics

Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’

by John Wanguba
August 5, 2023
Can Worldcoin Overtake Bitcoin?
Economics

Can Worldcoin Overtake Bitcoin?

by John Wanguba
August 4, 2023
Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures
Economics

Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures

by John Wanguba
August 4, 2023
Namibia Will Regulate And Not Ban Crypto With New Law
Finance

Namibia Will Regulate And Not Ban Crypto With New Law

by John Wanguba
July 25, 2023
Next Post

Infographic of the Day: The Cheapest States To Buy A Car

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market blockchain BTC BTC price business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Archives

  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • Unlocking the Future: Google’s Game-Changing Move to Advertise NFT Games Starting September 15th
  • Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’
  • Can Worldcoin Overtake Bitcoin?

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.