Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20
Silver's Massive Undervaluation Relative to Gold Makes It Irresistible - 14th May 20
Bitcoin Halving Passes with no Fanfare, but Smart Money is Accumulating - 14th May 20
Will Job Market from Hell Support Gold? - 14th May 20
The Tragedy Of Missed Covid-19 Opportunities - 14th May 20
Worst Jobs Report In US Economic History - And The Stock Market Continues To Rally - 14th May 20
NASDAQ Sets Up A Massive Head and Shoulders Pattern - 14th May 20
Perceiving Coronavirus as a Disruptive Technology - 13th May 20
Why Financial Trouble Brews on the "Home" Front - 13th May 20
Stock Market ‘Sentiment Event’ Rally Grinds On - 13th May 20
The Fed Now Owns All Markets - 13th May 20
Fruit Trees Gardening to Beat Coronavirus Blues - , Apple, Cherry, Kiwi, Pears, Plums, Grapes, Bananas May 2020 - 13th May 20
Gold Investors Shouldn’t Be Losing Focus - 12th May 20
S&P 500 Bulls Again At Resistance – Now What - 12th May 20
US Fourth Turning Accelerating Towards Debt Climax - 12th May 20
Gold in the year of the Coronavirus Pandemic - 12th May 20
Hi Ho Silver : Away! - 11th May 20
The Great Stock Market Disconnect - 11th May 20
The Big Move In Silver May Be Right Now - 11th May 20
Finding Winners in the Wreckage of the Coronavirus Economic Downturn - 11th May 20
Brave New Corona World – A heated Debate between Steven Pinker and Aldous Huxley - 11th May 20
Coronavirus Catastrophe Stock Market Implications - 10th May 20
US Stock Prices are Ignoring the Economic Meltdown, Wait for it… - 10th May 20
Forecasting Crude Oil: This Method Has Been the Undefeated Champion Since 1998 - 10th May 20
Coronapocalypse and Gold - How High Is Too High for the Yellow Metal? - 10th May 20
The Illusion of Owning Gold - 10th May 20 - Nick_Barisheff
The Financial Crisis Will Continue To Lurk Even If the Lockdown Gets Eased - 10th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

There Are No Markets Anymore

Stock-Markets / Market Manipulation May 15, 2014 - 02:51 PM GMT

By: Raul_I_Meijer

Stock-Markets

It’s a fun day in finance so far today. Eurozone growth is not going anywhere, but there’s no lack of positive anticipations for the future. Is there ever? Q1 GDP in the Netherlands actually shrank to the tune of -1.4%, but they have a great explanation for that. It’s because of – drumroll, wait for it – … the mild winter! The weather can be used to explain anything and everything these days. Where the US economy was hurt by a harsh winter, the Dutch went down because their winter wasn’t harsh enough.


The reasoning in the burbs of Amsterdam is that both exports and domestic use of natural gas was, what’s that word, tepid, and at face value that sounds sort of acceptable perhaps, but why didn’t the US economy get a boost then from additional heating costs, instead of being hurt by them – or so they say -. And if Americans didn’t go out to buy cars and homes because of the cold, wouldn’t the Dutch have done just more of that in their mild winter?

The Bank of Japan yesterday was good too: it warned against an El Niño this year cooling the weather, which allegedly will cut spending. Japan Q1 GDP was up by 1.5% yoy, but there’s not much faith left in the rising sun: the Nikkei lost 0.75% (-12% for the year) on the good news (like the Dutch markets are up on their bad news), and NLI senior economist Taro Saito was quoted as saying: “We expect the economy will contract at an annualised rate of around -5% for April-June” He did add it might grow back a bit later in the year, but still. Ouch.

Reuters has a piece about how the Japanese working poor are getting hurt by Abenomics, and that’s no wonder since it’s based on ye olde trickle down theme, and I don’t swallow for a second that Abe doesn’t know what that means. He wants consumers to spend just because they believe Abenomics will work, not because it actually does, but he knows Japanese don’t think like that. Meanwhile, his banks – for the umptieth time in the past 20 years – just got a desperately needed credit buffer. A job well done. Wonder what the BOJ will come with when that El Niño never materializes and the economy still keep on crumbling.

In line with my article yesterday on the developing disaster that is the Chinese economy, David Stockman does one better, and says China’s not even an economy, just a “monumental building aberration”. Now we’re talking. “China is a grotesque economic aberration that bears no relationship to prior economic history or any conventional economic models ..” Even TIME Magazine joins the fray now: “You know a property market is in trouble when developers stage long-jump contests to attract buyers.”

China’s one of the main reasons – Russia’s the other – why Steen Jakobsen at Saxo Bank foresees a major slowdown in Germany. And if you combine that with the disappointing eurozone Q1 numbers, held above zero only by Germany, then what do you see? Well, one thing is that in a week, the 3-day European Parliament elections start, and there’s a fair possibility that anti-EU parties get such a big chunk of the votes, there will have to be serious discussions about what the European people want, not just the ‘Europe is good, more Europe is better’ “visionaries”.

And if you ask the people, there’ll be very few who want more Europe. They just have no other way, except in Italy with Beppe Grillo’s 5-star movement, to express that than through voting for fringe parties with often questionable ideas. The entire ‘normal’ political spectrum, from left to right, all have the same basic message: Europe is good for you, more Europe is more good. Which is a strange way to run a democratic system, and down the line a dead end one.

And of course nobody’s surprised anymore that bad news causes a stock market to rise, and good news leads to falls. That lack of surprise is just one of many signs that we don’t have markets anymore, that they no linger exist other than in name. And that can seem merely semantics, but let’s have that conversation. Stock markets are places where someone who has done work, who has added value to something through his labor, after providing for his own food and shelter can invest what’s left over in shares of a company that does the exact same thing: add value to something through work. In a company’s books and ledgers, an investor can see if the company’s doing well. If so, he gets some dividend, if not, he may lose some of his investment, sell the stock, and invest elsewhere.

Of course there may be people who inherit the money they invest, but by and large the model stands. Except that it doesn’t look at all like what are called the markets today. Where for instance the S&P can set records despite a still severely limping US economy. Where 40% of trade goes through HFT desks. Where stimulus freebies prop up everything, and nobody says anything as long as they too can feed on that trough. Where a company’s shares may have nothing to do with its performance when it comes to added value in its products, and often indeed does not.

It’s the Tulip bubble redux, and we all know how that went, but nobody says a thing as long as there’s a buck to be made. That this buck will have to come from the working poor, who get hit everywhere in the same fashion as Japan’s working poor are through Abenomics, nary a moral objection is heard about that. A buck in the hand today is worth more than a functioning economy down the line. Or so people seem to think.

If you say that you can’t solve a debt based problem with more debt, other than perhaps at low debt levels -which we certainly don’t have -, most will understand and agree. If you say that’s exactly what is being done right now all over the world, most will neither understand nor agree. There’s a belief in magic factor that plays a role in that, but there’s also the ‘buck in the hand today’ one. A belief that somehow this will end well trumps our logic, and that allows us to give way to greed over common sense, over the notion of leaving behind a better, let alone just simply functioning, world for our children. By the time we hand it over to them, there’ll be nothing left but zombie markets ruled by zombie banks reigning supreme over a zombie economy in a pool of miserable desperation. We’re laying the foundations for that today.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2014 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
Raul Ilargi Meijer Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules