Irrational exuberance of the stock market

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Does anyone out there know why the U.S. stock market is so bullish?
Yesterday, the Dow Jones Industrial Average (INDU) rose to its highest level ever — closing at 14,253.77 — erasing losses from the financial crisis after a four-year rally fueled by the fastest profit growth since the 1990s and monetary stimulus from the Federal Reserve.
Jim Cramer, host of CNBC’s Mad Money, shows us how yesterday compares with October 11, 2007, the last time stocks were this high:

  • Dow Jones Industrial Average: Then 14164.5; Now 14253.77
  • Regular Gas Price: Then $2.75; Now $3.73
  • GDP Growth: Then +2.5%; Now +1.6%
  • Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
  • Americans On Food Stamps: Then 26.9 million; Now 47.69 million
  • Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
  • US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
  • US Deficit (LTM): Then $97 billion; Now $975.6 billion
  • Total US Debt Outstanding: Then $9.008 trillion; Now $16.43 trillion
  • US Household Debt: Then $13.5 trillion; Now 12.87 trillion
  • Labor Force Particpation Rate: Then 65.8%; Now 63.6%
  • Consumer Confidence: Then 99.5; Now 69.6
  • S&P Rating of the US: Then AAA; Now AA+
  • VIX (market volatility index): Then 17.5%; Now 14%
  • 10 Year Treasury Yield: Then 4.64%; Now 1.89%
  • USDJPY (US dollar to Japanese yen): Then 117; Now 93
  • EURUSD (Euro to US dollar): Then 1.4145; Now 1.3050
  • Gold: Then $748; Now $1583
  • NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

In other words, the fundamentals of the U.S. economy are in very poor shape. And yet the stock market is at a record high.
What goes irrationally up must come crashingly down. As Cramer puts it, “we all know it’s going to end badly, but in the meantime we can make some money.”
As long as you sell ahead of everyone else.

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0 responses to “Irrational exuberance of the stock market

  1. You are right The fundamentals are not there . Whats different this time over Bushes time when the Hawks started calling the Stock Valuations Book Cooking is Obamas Federal Reserve QE is pouring that Cash into the portfolios of these stocks through the Corps and this Covers up the book cooking which is Now been fundamentally transferred over the Federal Reserve who is not subject to the same SEC regulations as the Corps as that Under the Bush era were and called out for Book Cooking with Private Debt accumulations , right ?????
    So there has to be another reason why this Market rally is being staged …..Lets analyze some reasons why the printing of dollar debt leveraged against US Citizens and generations to come by the Federal Reserve like never seen before is happening .
    Heres the evidence of how the Corps are extracting funding from the 2 big to fail that access funds from the Federal Reserve Discount Window then invest this funding into the stock market ,
    $253.5B—Obama Borrowed Nearly 6x as Much in February as Sequester Cuts All Year
    Here is past evidence from 4 years ago on how the funding gets lost throw the Cracks and is leveraged against the Next Generation ,
    The Fed Audit
    9 TRILLION Dollars Missing from Federal Reserve,Fed Inspector General Can’t
    Senator Sanders asks Bernanke WHERE IS THE MONEY!!!

    Bernie Sanders and Timothy Geithner

    Chart Of The Day: China’s $3.3 Trillion FX Reserves Could Buy All World’s Gold Twice
    Obama & Co. is entering into a dangerous time of trying to stay relevant now and into the future !!!! The events that are taking place that forcing the fed to FLOOD the currency markets and equities with Cash to try and force with GREED world markets to continue to accept the dollar is going to create such a radical event to happen it will just be a wreck of destabilization . This should be reported more but the fear of this being exposed and causing a breakdown is too great for the power of the press so they stay quiet and we continue to watch this slow moving train wreck evolve !!!
    I think after 2006 when the Democrats took control of both houses of congress they Forced Bush because of their threat to defund the Iraq war to look, act and spend like they wanted and to not implement or publicly expose any sort of Regulatory actions that would have warned the Investment communities of the economic corruption that set the stage for the “ Takedown “ in 2008-9 or they would have cut funding for Iraq . Iraq was a failed strategy just like Opening up the Oil region to the takeover of the region by the Muslim Brotherhood will be .but now this strategy that the west thought would be an alliance in the Geo Political and Dollar financial Western nations to aline resources and political forces together has taken a different path and I bet the Russian, China and soon alliance with South American nations will forge a alliance with the Brotherhood fracturing the alliance the west was hoping for and the dollar continuing to be the trade currency and dominating the world societies in the sense of creating a Global Zero Growth economic structure to save the Eco system of Earth .
    Here is some evidence of this fracture of the alliance…..
    China is helping Iran get around the sanctions ,
    Argentina is hating the dollar and I bet this leads to their willingness to start setting their trade with Asia in Yuan’s , I bet most of South America will go with the Asian suppliers currency soon . The Federal Reserve is going to cause Obama to do something soon we are in dangerous times .
    European firms are starting to trade with the Yuan as their settlement currency . The report concluded that Asian and European firms are increasingly open to using Yuan payments, most frequently from Singapore and London.
    The Continued Fed QE strategy seemed to suggest they were losing the Faith in the investment community public to force the Fundamental Transformation away from the capital system over the Global Collective system they want in the 2010 turnover of Congress , so they restarted the capital system with the Fed QE policies along with keeping the interest at zero to get past the election . Now with the public drooling again over a economic sign of wealth recovery I bet if we see a Geo Political ( Federal Reserve losing the Trade Currency Status and willing to force war with Iran ) even that would require a action of national security support would be able to be generated for whatever kind of effort to secure the economic welfare of the nation and the public’s recovered Financial means .
    we might be getting ready to see such an event soon ……

  2. 40 Billion in mortgage-backed securities (bad loans) being bought by the Fed each month. Maybe this month’s check just cleared?

    • If you want a economy valued off a true supply of inflation fighting goods rather than just a Bunch of paper Money that Obama is ordering from the Federal Reserve that Last Month was Over 200 Billion Bucks fed into the economic system around the world I suggest you email President OBama and tell him to Hear My Senator on this Trade Policy issue please !!!!!!

      This next Video will tell you how the trade Policy is Controlled by the Same Elite group of Corps that Wall Street and the 2 big 2 fail banking and Federal Reserve print and feed leveraged funding into the international economic system .

      Pay attention to this story on trade with Russia , Obama said he could be more flexible after the election with Russia remember ????

  3. “FIGURES DON’T LIE , BUT LIARS FIGURE “……….The fiat money is going a long way to buy time . Just enough time for all the ” everyday Joe’s ” to put their $ back in and then kaboom .

    • Precisely.

      • Yeah it will be the LAST roundup of Private wealth creating the scare that will open the doors to Social unrest and then the NWO can implement their plan of World economic domination for consumption rate controls and population controls all in the name of Saving earth eco system . Its all in the NSSM200 memorandum and i think they have been following this since 1972 when they delinked the dollar and went on the fiat system , its the only thing that makes sense of all of what we have seen in these years since then .

        • Just watch how easy it will be for them to eliminate the dollar entirely, and how fast it will be accomplished. We may share a currency with Mexico and Canada, but with the speed with which is being accomplished – perhaps they’ll just bypass the Amero and go straight for the international currency.
          The same successful formula used in Europe is being applied here. 1972? I’d say 1910. So long in the making, the Rothschild formula that was so successful in 18th century England – PERPETUAL WAR – is now the basis of the destruction of the United States. The Napoleonic Wars (1803-1815) were essentially Napoleon’s fight against bankers. Right now – we are fighting the banker’s wars for them. One by one those “Arab Spring” nations are being brought into the “family,” with central banks popping up as soon as the “despot” is summarily removed.

          • I was relating the 1972 time when Nixon delinked the dollar as this times attempt to consolidate the wealth and resources away from the private sector and into the bowels of Government via the Plutocracy that has formed in the mega merger mania over the 40 years since then and I think its a Exact Blue Print that is described as a Way to do this in Kissingers NSSM200 . You know Kissinger has not missed a state dinner since Obama took office . I think they are trying to finish what Kissinger said was saying needed to be done by the year 2000 in the NSSM200 memorandum

      • That’s why I’m keeping a sharp eye on the market . Gonna pull it all out in a week or two . Maybe sooner . 70% of something is better that 100% of nothing !!! You gotta do what you gotta do .

        • Yes, Japoa. They are “shaking the rug out.” I’d say sooner rather than later. The middle class must go to accomplish the NWO. All the manipulating of the gas prices is designed to force us out of our cars and into public transit. Squeeze, squeeze, squeeze. . .

  4. The entire world has gone to hell!!

  5. Thank you Dr. Eowyn for this interesting post. There is no rhyme or reason to the stock market; this is why this is not good news, especially in light of the fact that employers are still not hiring!!!

  6. Congress needs to bring actions against the Obama Administration that will relieve the members of that body from their obligations, and put in a bipartisan group of men and women from their ranks, Congress’s ranks, to run the country until the economy is back up and running again.
    There is a bill waiting to be heard in the House that demands the reinstatement of Glass Steagall, and that is step number one. We need credit to be uttered through congress by a new national bank, that is if the FED is bankrupt in fact which is what has been reported by the Bloomberg Press Organization. We can’t close the stable door and hope the horse will still be in the stable somehow even though horsey has escaped, long ago. So to speak that is. The party is over and the guests that just don’t want to leave are attempting to run up the tabl for room service and party fovors still. The only party that will never stop is a Holy Ghost Party, and this is not the Holy Ghost Party methinks. This party is what they call Buck Nekkid.


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