Skip to comments.Stocks Surge To Record Highs On Worst Economic Growth In 3 Years
Posted on 05/29/2014 1:51:10 PM PDT by PoloSec
One supremely smart CNBC talking head summed it all up, "today's negative GDP number was excellent news," and sure enough, thanks to someone's multi-billion-dollar bid at the all-time-highs mid-afternoon, we went to the moon, Alice. Trannies are on target for their best month since October (+5.7%). The dash-for-trash has a new life as "most shorted" have now risen 6 days in a row - the biggest squeeze in over 3 months. This all happened as bonds rallied (though yields rose modestly on the day), VIX rose, USDJPY would not play along and aside from the spike in volume, on a total lack of liquidity. Gold and silver were monkey-hammered early on but limped back off their lows as WTI crude rallied from the GDP print on. The S&P 500 is now only 30 points short of Goldman Sachs June 2015 target.
(Excerpt) Read more at zerohedge.com ...
Scary stuff...sum-fins bout to pop
so the stock market and Obama think the U.S. economy should be like a golf score - minus
As long as the POSOTUS and the FED keeping printing more and more worthless “deutchmarks” the jerks on Wall Street will cheer.
More “irrational exuberance”.
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I'm not getting this sentence.
Nah, their still pumping, what, $40 billion a month in monopoly money into the stock market?
Maybe the DJIA sees bad economic news as an indication that this QE^infinity will continue with no end in sight.
Transportation Sector stocks
This is about interest rates. The market thinks the fed will not raise interest rates soon because of weak economic data. When it looks like interest rates are going to go up the market will tumble, IMHO.
What could I have been thinking?
Biggest purchasers of stocks are corporations. They get dirt cheap financing to go into debt and buy back their stock to drive prices up. Makes the CEO’s and Wall St. investors very happy, to bad they have now blown the corporate debt bubble back to all time highs. Malinvestment is the norm, until it implodes.
Only you know what's between the ears and behind the eyes
Right on the money.
Transportation stocks - trucking, rail, airlines
There, fixed it.
it’s amazing how many inches you can squeeze into a foot
Wall Street could not care less about Main Street.
Standby to sell short.
With interest rates near zero, that money’s going to stay in the stock market. Until the elite decide it’s time to take the profits before anything gets in the way of that, that is.
We live in crazy world where everything means the opposite of what it used to mean.
When this beached whale blows up...It’s going to stink!
Looks like it’s time to cash in some of my stock gains and buy some gold at bargain basement prices.
In an imperfect world, investors see an imperfect American economy, as one the best bets for long term prospects.
Such factors as risk weigh heavily, alongside discretionary income, taxation & regulation, political environment, natural resources, physical and institutional infrastructure.
The US may be slipping, but remains at the top in many areas.
I believe they are referring to transportation stocks but in this day and age one can never be quite sure.
I can get ya 50 shares at $2M or market.. Insanity Healthcare
Cheap! A real up and comer!!
Ahhh,, but what a experience.. And an aroma .:-o
The artificial propping-up of the stock market still goes on, though “quantitative easing” is officially winding down.
Meanwhile, inflation in the food and energy sectors continues almost unchecked, if somewhat unevenly so far.
It will get much, much worse, once the US dollar has been effectively discarded as the primary means of settling international debts.
Gold, or possibly uncut diamonds, will be the unofficial currency. Other precious or semi-precious metals or gems may be included in that list, but there will be no set price for any commodity. “One pound of butter for one pound of gold.”
A painful lesson is about to be taught again.
Grass has some marginal dietary value. Grubs and slugs are also of some benefit against starvation.
Its an old saw that when transportation stocks are doing well then the internals of the economy are doing well. There are sections of the economy that are on fire. That would be the oil patch mainly. You just can’t have a down economy when a country is producing an extra million barrels a day annually.
As well the midsection of the country is enjoying high grain prices.
The hottest urban markets are san francisco to san jose which just churns out billion dollar companies at a pretty regular clip.
Now the rest of the country outside of the oil patch, the food patch and high tech is not doing so great. And obama’s regulations are killing any real chance of big growth. But as things stand there’s not much chance of the economy going down hard.
My hometown is in the red hot center of the Bakken.
As a kid I worked in the patch during the 80s boom. One day it was there, the next it was gone.
Ask anyone who has seen or lived through a boom that goes bust.
The boom comes on with tremendous speed and force-—the bust happens even faster.
For this boom to stop, and for the U.S. economy to fall precipitously, there would have to be some great unexpected disruptive development or event, here or elsewhere in the world.
But there always is, eventually.
Grain prices are high in part because of the ethanol mandate and other federal spending, and Wall Street is likewise booming because of the government buck. The nation is broke, up is down, the economy is stalled, and yet the rally goes on.
Two facts to consider: a boom (or a bubble) always busts; and a bust can in fact be just as irrational as a bubble or boom.
For more than a half dozen years now you could stand on Main Street in my little town and shake your head at the tremendous initiative, energy, brainpower, muscle and sheer human enterprise rolling past nearly around the clock.
But at the same time there is always a little voice in the back of your head saying It cannot last, it cannot last.
Because nothing, especially nothing of this extraordinary magnitude, ever does.
Because nothing, especially nothing of this extraordinary magnitude, ever does.
Well, I don’t know if you were around in the 70’s but imho today is a reversal of what happened in those years.
I’ve done some studying up on the oil industry. American oil production went straight up after WWII...until 1970 when it was stopped cold. I mean if you look at a graph of American oil production it looks like it was cold cocked in 1970.
Saudi oil production started going up by a million barrels @ day just like american oil production is going up by 1 million barrels @ day today. But Saudi oil production went straight up for six years through 1975. Each year they raised oil production by 1 million barrels a day. They went from oil production of 3 million barrels a day to 9 million barrels a day. Then for the next five years between 1975 and 1980 their oil production went up another 3 million barrels a day.
Here’s the kicker.
It cost the saudis between .25 and .50 a barrel to get the oil out of the ground. It cost them 1.25 to ship the oil anywhere in the world. That’s why US oil production died. US driller couldn’t compete. But once the Saudis gained control of production—then they jacked up prices in two moves in 1973 and and 1979.
Now the demand for oil is so high around the world—that the saudis can’t keep up with it and prices are high.
This has left a tremendous opening for high cost US oil drillers where there was no opening before. So US drillers will be able to raise production for the next couple years without prices getting cut.
Falling prices is what will kill US oil production. But that’s not going to happen until until other countries learn to frack in volume. That won’t happen for at least another five years.
So you’re right that it will end at some point.
In the bakken the best estimates that I’ve seen so far is that production will keep rising for roughly another 2 years until 2016 and peak out at roughly 1.3-1.6 million barrels@ day. Then it be pretty steady for the next ten years—before going into decline.
I think that after 2020—the oil industry is going to be faced with steadily falling prices as competition from natural gas houses trains trucks and buses plus electric cars take the first tiny bites out of demand. But the fall will be a decades long process.
By 2020 bakken costs should be down far enough to withstand the first rounds of oil price cuts. But the impossibly amazing days will have passed by then anyhow.
Not till 2025-30 will oil start to appear in the rear view mirror of North Dakota history.
In the meantime, these are the good old days for oil in North Dakota. Tell everyone to sock away as much money as they can. Because when its done. Its done.
In the meantime, North Dakota and a half dozen other places around the USA are steadily re capitalizing the USA.
That’s serious thing. Whereas the fed is playing with funny money. The fracking revolution is creating real wealth again for the USA. That’s why the dollar has been going side ways for the last couple of years. The the downward pressure on the dollar caused by the feds many QE’s is being met by the upward pressure on the dollar by steadily increasing US oil production—which is literally shifting capital flows around the world—in favor of the US dollar.
(This as I didn’t quite get around to mentioning is a reversal of the situation in the 1970’s when the dollars went overseas—and the USA was forced off the gold standard.)
Of course it “soared”’ if it just keeps up with real inflation. Lol.
I don’t think we disagree much.
I’ve just gotten old enough now that when I hear someone (not you) say, “It’s different this time,” I begin to edge toward the exits.
The thing that bothers me most is that, as I said in the other post, these days up is down, good is bad, lies are truth...the whole world seems at cross purposes and there is this grave cold sense that something is dreadfully wrong.
There was a sense that something was out of kilter during the dotcom boom, which was supposed to be different.
There was a similar sense in the year leading up to the 2008 collapse.
But in those cases it was mostly the air of gold rush fever that made one uneasy. Now we have certain segments of the economy in which the fever seems even more heated...but on top of that we have a president who actively disdains achievement and accomplishment, we have a leftist party in charge of much of the nation that values weakness over strength, destruction over construction, poverty over prosperity, irrationality over good sense and raw power over anything else.
The world is out of plumb, my FRiend. I still think very hard times are coming sooner rather than later.