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If the Economy Is Tanking; Why Are Markets Up? (What's encouraging investors?)
American Thinker ^ | 07/28/2012 | Chris Banescu

Posted on 07/28/2012 4:08:18 PM PDT by SeekAndFind

The latest economic data released Thursday confirms what all Americans, especially business owners, already knew.  Economic growth has slowed down to a measly 1.5% (from 2% the previous quarter), job growth continues to languish with nationwide unemployment at a dismal 8.2%, consumer confidence has fallen to its lowest level this year, and consumer spending is also tanking.  Household purchases, which represent approximately 70% of GDP, grew at the slowest pace in a year.  Recent surveys show that Americans have lost approximately 40% of their net worth in the last few years, and poverty rates are reaching levels not seen in this country since the 1960s.

So, why are the markets up?  Everything confirms that our bleak economic situation just got worse.  Obama's anti-business, anti-job growth, and punitive taxation schemes have not changed.  The administration's stifling and oppressive regulatory policies continue unabated.  The European situation has not improved or stabilized much, despite repeated assurances from the European Central Bank.  The Federal Reserve in the United States is already out of options, despite speculation from the so-called financial "experts" who believe that another round of "stimulus" may occur, even though the Fed signaled just the opposite last week.  Given the poor record of previous easing and the near-zero interest rates, there is very little the Fed can do now.

So what could possibly have influenced the financial markets to push the Dow Jones, S&P 500, and Nasdaq averages into solid positive gains for the day?


(Excerpt) Read more at americanthinker.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: economy; investment; stockmarket
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1 posted on 07/28/2012 4:08:25 PM PDT by SeekAndFind
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To: SeekAndFind

Pump-n-dump?


2 posted on 07/28/2012 4:12:08 PM PDT by MileHi ( "It's coming down to patriots vs the politicians." - ovrtaxt)
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To: SeekAndFind

EASY! The end of an Obamanation.


3 posted on 07/28/2012 4:12:21 PM PDT by prisoner6 (Right Wing Nuts bolt the Constitution together as the loose screws of the Left fall out!)
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To: SeekAndFind

The market numbers have nothing to do with Obama’s Depression that rages on. Brokers buy and sell stock to each other. They are paid for each transaction, so the more they churn the stocks, the more they make in commissions. It’s the old S & L scam of the 70s redux.


4 posted on 07/28/2012 4:13:54 PM PDT by txrefugee
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To: prisoner6
>"The end of an Obamanation."

That's my guess also.

Business will be so much better without the Chicago Crook constantly robbing US!

5 posted on 07/28/2012 4:15:57 PM PDT by rawcatslyentist ("Behold, I am against you, O arrogant one," Jeremiah 50:31)
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To: SeekAndFind

Because with the bad economic news, the expectations of a third quantitative easing from the Fed is expected. So bad news == good news. The last two easings resulted in two market rallies, which then dissipated. The market is expecting to be rigged by the Fed, not expecting earnings growth and heightened consumer demand — because it is clear those are not present.


6 posted on 07/28/2012 4:16:03 PM PDT by bajabaja (Too ugly to be scanned at the airports.)
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To: SeekAndFind

There was another Thursday statistic......... Rasmussen, Obama down by 5%


7 posted on 07/28/2012 4:18:42 PM PDT by bert ((K.E. N.P. N.C. +12 ..... Present failure and impending death yield irrational action))
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To: MileHi

Pump-n-dump?


Obviously some of them think they can get out in time to salvage their gains.


8 posted on 07/28/2012 4:18:42 PM PDT by The Working Man
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To: SeekAndFind

Markets are up because investors and business are
looking forward to November and a change of regime
and just can’t wait.

That’s my guess.


9 posted on 07/28/2012 4:21:15 PM PDT by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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To: SeekAndFind

Maybe.

Or maybe Bernanke will do ANYTHING to get his messiah re-elected including QE3.

That and the market’s exuberant reaction to President of the ECB, Mario Draghi’s ‘Believe Me’ bullshit speech .

I think the markets are wholly addicted to govt. money printing and NO WAY Europe of the Fed will allow their Beast system to crash.


10 posted on 07/28/2012 4:21:56 PM PDT by Para-Ord.45
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To: MileHi

“Pump-n-dump?”
_____________________________

That is what I call it.
Fat cat investors such as Soros and Buffet, with exotic computer programs doing the pump and dump.
As I say, it is no longer your father’s stock market.

I no longer see the stock market having any relationship
to real life economic conditions.


11 posted on 07/28/2012 4:23:24 PM PDT by AlexW
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To: txrefugee
There are trillions of dollars on the sidelines waiting for Obama to be gone. Where else can one put money when interest rates pay less than the rate of inflation and the fedguv is devaluing currency faster than the ink dries?
The stock market soared during the Klintoon years too. It was great if you got out before it tanked.
12 posted on 07/28/2012 4:23:35 PM PDT by bitterohiogunclinger (Proudly casting a heavy carbon footprint as I clean my guns ---)
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To: prisoner6

The end of the current Anti-business regime will enable the economy to begin recovering. Yes.
But also...
when the Fed prints more dineros (”QE-3 or 4”)...
these $$$ are put into the big banks (which are allowed to invest now, since that wise restriction was lifted).
Given how WashingtonDC has been depressing the economy, there is very little demand for any loans, or at least any loans that the banks feel they can afford to risk writing. So, much of the newly-printed money goes into the stock market instead.
This creates a (n artificial) stock market bubble even if normal investors are far more cautious.


13 posted on 07/28/2012 4:23:35 PM PDT by faithhopecharity
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To: SeekAndFind

[ Why Are Markets Up? ]

There is profit in capitalizing socialism.. Look at China..
-OR- in socializing capitalism.. same evil thing..

Socialism is a lie.. a scam.. but some will buy it..
There are suckers born every minute.. unless they are aborted..


14 posted on 07/28/2012 4:24:00 PM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole..)
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To: tet68

RE: Markets are up because investors and business are
looking forward to November and a change of regime
and just can’t wait.

_______________________________

REALLY? How to explain this site ( where traders put REAL MONEY into how events will turn out ):

http://www.intrade.com/v4/home/

Barack Obama to be re-elected President in 2012

57.0% CHANCE

Last prediction was: $5.70 / share

Today’s Change: +$0.01 (+0.2%)


15 posted on 07/28/2012 4:24:50 PM PDT by SeekAndFind (bOTRT)
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To: SeekAndFind

Just part of the turbulence. The markets for real estate, precious metals, currency and stocks are all in a turbulent phase. So they go up and down. On the whole those who put in money into the markets near the peak during QE2 are down. The markets are moving up again due to rumors of an impending QE3 which will cause inflation. Whenever these rumors pick up, people move out their currency holdings into the other forms.


16 posted on 07/28/2012 4:27:16 PM PDT by JimWayne
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To: SeekAndFind

As a few have mentioned, its all about the anticipation of QE3. Since the Economy is taking, traders think that the Fed (Bernake) is more likely to print more $$. The irony here is that the anticipation of QE3 may give the market a bigger boost than QE3 itself. In fact, its possible the the QE3 euphoria may last just days once its announced—before the Market goes into reverse.


17 posted on 07/28/2012 4:31:03 PM PDT by rbg81
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To: tet68
100 DAYS BABY !!!!

....followed by the most volatile lame duck session in US history.

18 posted on 07/28/2012 4:34:21 PM PDT by chiller (More T-Partiers needed, especially in the Senate)
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To: AlexW; The Working Man

I don’t understand the market, but it sure seems to cycle up and down when nothing changes much either way out in the world.


19 posted on 07/28/2012 4:36:57 PM PDT by MileHi ( "It's coming down to patriots vs the politicians." - ovrtaxt)
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To: SeekAndFind

Bernanke is propping up the market.


20 posted on 07/28/2012 4:42:00 PM PDT by expat2
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To: SeekAndFind

The Fed is printing money, and it’s going into the stock market.


21 posted on 07/28/2012 4:42:28 PM PDT by Brilliant
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To: MileHi
The Market is not up that much this year....its been going between 12,500 and 13,000...It may go up if they think Obama will be gone
22 posted on 07/28/2012 4:44:11 PM PDT by Hojczyk
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To: SeekAndFind

Europe Central Bank basically saying they are going to do some quantitative easing (printing money).

Our Fed saying the same thing, QE3. Pretty simple really. This writer isn’t much of a ‘Thinker’ is he?


23 posted on 07/28/2012 4:44:55 PM PDT by Betis70 (USA! USA! USA!)
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To: MileHi

I think that most of us don’t understand the markets either. I’ve had the chance to discuss this with some long term investors and they have some interesting views. Most of which center around how the markets are manipulated.

And to be honest there isn’t just one or two manipulators, there are hundreds if not thousands of them. Each of them playing their game with the others. And if you aren’t a member of that club, well then you are at best the sucker to be fleeced.

My advice for what that is worth is to stay out of the day-trading and the penny stocks. If you want to invest look for a company that actually makes something or at the least has a product that is bought and sold. Buy it and hold it long-term and just ignore the market fluctuations. You’ll save a lot of money on Maalox that way.


24 posted on 07/28/2012 4:52:16 PM PDT by The Working Man
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To: MileHi; txrefugee

Txrefugee is right.

Brokers these days make money by TRADING, not by making investments.

And since the public has been trained to think that UP in the market is always good news, young money-hungry traders have a vested psychological interest is selling up.

Then they sell off and take a bit of profit, then sell up again. It’s not entirely unlike realtors in the bad old days flipping properties, the proceeds of which were based on speculative prospects and upselling too.

The traders especially can make trades (thus money) on mostly bogus “good news” like the latest European Union popinjay promising “great resolve” in addressing the Euro debt crisis, or our own Federal Reserve planning to print and spend more money in the bond markets, etc., supposedly “easing” the cost of credit and investment (while really only debasing our currency and increasing the likelihood of an eventual financial panic and crash).

Party on! is the motto of the stock market and the people who sell it. They (and we) can all deal with the hangover later...or perhaps sooner.


25 posted on 07/28/2012 4:53:06 PM PDT by Fightin Whitey
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To: SeekAndFind
The markets are up because the Fed's whole quantitative easing ("QE") program is aimed specifically at propping up the U.S. stock markets by: (1) artificially suppressing the cost of borrowing, and (2) reducing the returns on many investments that are alternatives to the U.S. stock market (U.S. Treasuries, for example).

This is how the stock market grows even while the U.S. economy declines by almost any other objective measure (employment, income, productivity, etc.).

I'm not a "gold bug" and I don't advocate for or against any specific type of investment, but this interview is a must-read for everyone on this thread:

The Emperor is Naked: David Stockman

26 posted on 07/28/2012 4:56:38 PM PDT by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: SeekAndFind

I may be wrong, but I figure it’s because the banks don’t pay interest worth squat. Were else are you going to protect you money from deflation?


27 posted on 07/28/2012 5:10:37 PM PDT by Trteamer ( (Eat Meat, Wear Fur, Own Guns, FReep Leftists, Drive an SUV, Drill A.N.W.R., Drill the Gulf, Vote)
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To: AlexW

Exactly! The entire system is rigged.


28 posted on 07/28/2012 5:10:54 PM PDT by fortheDeclaration (Pr 14:34 Righteousness exalteth a nation:but sin is a reproach to any people)
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To: Hojczyk
Agree. I just mean the +200-330 and then - 200-300 seesaw moves.
29 posted on 07/28/2012 5:14:45 PM PDT by MileHi ( "It's coming down to patriots vs the politicians." - ovrtaxt)
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To: AlexW

agree


30 posted on 07/28/2012 5:18:06 PM PDT by MileHi ( "It's coming down to patriots vs the politicians." - ovrtaxt)
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To: Fightin Whitey

Sounds right


31 posted on 07/28/2012 5:18:55 PM PDT by MileHi ( "It's coming down to patriots vs the politicians." - ovrtaxt)
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To: SeekAndFind

American businesses, and more especially foreign businesses, have more value than dollars. But we are valuing them in the denomination of dollars. The value of the dollar continues to fall, and with each increment down, more dollars must be assigned in value to a company to meet the inherit value of the commodity or business.

Demand is down, the economy is down, thus the value of oil is down. But the price of oil goes up - why? Because it takes more dollars to buy each barrel of oil. Is the GDP up? Nope, the GDP has fallen quarter after quarter if you take into account deficit federal spending, up to a whopping 24% of the GDP.

So there you have it, why stocks are up when everything in the news cycle points to utter disaster. The DOW is a horrible measure of economic health.


32 posted on 07/28/2012 5:18:55 PM PDT by kingu (Everything starts with slashing the size and scope of the federal government.)
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To: SeekAndFind

More money printing.


33 posted on 07/28/2012 5:24:08 PM PDT by Palmetto Patriot (How much better off would we be if these bastards would just leave us alone?)
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To: SeekAndFind

during the hyperinflation and economic collapse of Zimbabwe, their stock markets soared too


34 posted on 07/28/2012 5:25:59 PM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: SeekAndFind

If by “up” the author means below the 2008 levels including inflation), it’s because the President thinks everybody’s money belongs to him.

Short term ticks up and down don’t mean anything. It’s a random walk.


35 posted on 07/28/2012 5:30:57 PM PDT by <1/1,000,000th%
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To: MileHi

qe forever.....


36 posted on 07/28/2012 5:31:10 PM PDT by KSCITYBOY
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To: SeekAndFind

This is easy. It is money creation by the FED.

I believe that It can be taken even further. Every time the FED is about to create money and dump it to the bankers(in exchange for JUNK) then they create a cover story. They get the German Chancellor to make a statement, They bring out Liesman on CNBC or whatever. It is all a cover. These statements are not what make the market jump up. They are simply an explanation, so that Gullible people don’t figure out what is really going on.

Yes the system is really that corrupt.


37 posted on 07/28/2012 5:35:10 PM PDT by Revel
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To: SeekAndFind
As the markets tanked at the end of '08 in anticipation of an Obama presidency, so they are rallying this year in anticipation of a President Romney.

The crash of '08 had everything to do with Obama and hardly anything to do with Bush.

38 posted on 07/28/2012 5:37:11 PM PDT by what's up
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To: txrefugee
The market numbers have nothing to do with Obama’s Depression that rages on. Brokers buy and sell stock to each other. They are paid for each transaction, so the more they churn the stocks, the more they make in commissions. It’s the old S & L scam of the 70s redux.

Can you explain this?

39 posted on 07/28/2012 5:42:44 PM PDT by the invisib1e hand
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To: SeekAndFind

This is not about the stock market going up. It isn’t going up. That’s a delusion created by the Fed. This whole phony economy the Fed has constructed with cheap money is going to come toppling down. But the reality is we have to kill this phony economy because it’s unsustainable. We need to replace it with a viable one but unfortunately to do that there’s a lot of short-term pain because we’ve got to unwind this bubble, and the Fed doesn’t want that to happen.


40 posted on 07/28/2012 5:52:26 PM PDT by wolfman
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To: SeekAndFind

It’s just inflation at work. Why wouldn’t the price of stocks go up just like everything else?


41 posted on 07/28/2012 5:54:16 PM PDT by The Duke
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To: bajabaja
Because with the bad economic news, the expectations of a third quantitative easing from the Fed is expected. So bad news == good news. The last two easings resulted in two market rallies, which then dissipated. The market is expecting to be rigged by the Fed, not expecting earnings growth and heightened consumer demand — because it is clear those are not present.

Agree.

42 posted on 07/28/2012 6:19:48 PM PDT by Ken H
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To: SeekAndFind

Returns on bonds are pathetically low, so they put the money into the stock market. For some, if they don’t play the game (i.e. invest) they don’t get to collect fees.


43 posted on 07/28/2012 6:19:57 PM PDT by voicereason (The RNC is the "One-night stand" you wish you could forget.)
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To: Alberta's Child

That is a GRAAT inteview
Stockman is a really interesting guy, amazing to hear stuff like this coming from a former OMB Director:

Quote:

TGR: Finally, what is your investment model?

DS: My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains.

TGR: Thank you very much.

End Quote


44 posted on 07/28/2012 6:24:58 PM PDT by silverleaf (Every human spent about half an hour as a single cell)
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To: Alberta's Child
That is a GREAT interview
Stockman is a really interesting guy, amazing to hear stuff like this coming from a former OMB Director:

Quote:

TGR: Finally, what is your investment model?

DS: My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains.

TGR: Thank you very much.

End Quote

45 posted on 07/28/2012 6:25:17 PM PDT by silverleaf (Every human spent about half an hour as a single cell)
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To: SeekAndFind

People who already needed the money have sold to get the money have done so. Buyers now are seeking a hedge against inflation in the form of stocks that increase in value if there is inflation or inflate both in valuation and dividends with hyperinflation.


46 posted on 07/28/2012 6:36:53 PM PDT by tbw2
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To: SeekAndFind

... Because the US is the “best of the worst” places to invest. EU and BRIC’s are a mess.


47 posted on 07/28/2012 6:43:13 PM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: SeekAndFind

Qualitative easing and government loans here and in Europe drive the markets. Just the promise of support will send the market soaring out of a slump.

My opinion is that a lot of investors are doing the only thing they know how to do, and there is little or no economic reason behind it. What made the markets drop for several days, and what made it shoot back up? Greece disappointed the market, and the Fed made promises, like a drug addict and his pusher. ...Don’t look now, but the Ayn Rand disciples in the market morphed into fascist as soon as their corruption caught up to them.


48 posted on 07/28/2012 6:47:48 PM PDT by pallis
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To: what's up

RE: As the markets tanked at the end of ‘08 in anticipation of an Obama presidency, so they are rallying this year in anticipation of a President Romney.

_________________________________

REALLY? How to explain this site ( where traders put REAL MONEY into how events will turn out ):

http://www.intrade.com/v4/home/

Barack Obama to be re-elected President in 2012

57.0% CHANCE

Last prediction was: $5.70 / share

Today’s Change: +$0.01 (+0.2%)


49 posted on 07/28/2012 6:48:31 PM PDT by SeekAndFind (bOTRT)
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To: SeekAndFind
Could this be the real reason why the markets responded with such enthusiasm? I suspect that that might have something to do with it.


50 posted on 07/28/2012 7:27:36 PM PDT by Donald Rumsfeld Fan (The)
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