‘We’re all technicians now!’ Stocks again are so divorced from reality and economic fundamentals that investors must be technicians in order to capture upside and avoid the inevitable recoupling with economic and financial reality…Remember the last recoupling of a few quarters ago?
Please recall the Goldman CFO, David Viniar, warned in early February 2008 that there is a “total disconnect between the equities market and the credit market.” [King Report 2/7/2008] We are now witnessing a historic disparity between stocks and GDP as well as employment. The autumn is going to be very, very interesting.
Globe & Mail: Stocks surged Thursday morning when the Bank of Canada said it has seen signs that the US economic recession has reached its bottom. We don’t recall the Bank forecasting the economic collapse last year.
Hasn’t it already been decreed that the US economy has bottomed? Haven’t stocks already discounted this? Of course – it’s just traders fooling with stocks during the summer – on thin volume.
Why do so many people heed the bottom-braying of people that never forecast the biggest economic and financial collapse since The Great Depression? The economic and financial collapse that occurred last year was as easy to recognize as humanly possible – and look how many people missed it.
Old Ben Bernanke is rebubbling stocks because the market believes he’s back in funny-money mode. And the last thing the US needs is another asset bubble that is intended to paper over structural problems.
The WSJ: Ford Posts $2.3B 2Q Profit On One-Time Gains;Beats Estimates The company burned through about $1 billion in cash – down from $3.7 billion in the first quarter – during the quarter as it controlled incentive spending around the world while increasing output in its North American plants. Ford’s profit came largely from a $3.4 billion gain it received related to debt-restructuring actions in April. Excluding the one-time gains, the company would have narrowed its quarterly loss to $424 million compared with a loss of $1.03 billion a year earlier. It would have been the company’s fifth consecutive quarterly loss…
Once again we have accounting gimmicks (non-cash factors) manufacturing earnings.