I was wrong. Instead of plunging, the markets have surged. Nevertheless:
1: The strong upward slope that brought us here, as I illustrated in a previous post, were caused by the policies of QE (Quantitive Easing) and ZIRP (Zero Interest Rate Policy). When the American economic growth is self-sustaining, these policies have to end, bringing a significant market correction.
2. The amazing recovery over the last week had two underlying stimulants: the FED's assurance that ZIRP would end no time soon, and evidence that the American economic recovery is now self-sustaining. Ultimately these are two contradictory forces, since self-sustaining economic growth calls for an end to ZIRP.
3. I can hear the cocks crowing, which always happens on the eve of a market collapse. Bear voices are drowned and the market's champions encourage the fools with promises of even greater profits to come. The louder they shout the clearer the message becomes: we want to sell at the right price!
1: The strong upward slope that brought us here, as I illustrated in a previous post, were caused by the policies of QE (Quantitive Easing) and ZIRP (Zero Interest Rate Policy). When the American economic growth is self-sustaining, these policies have to end, bringing a significant market correction.
2. The amazing recovery over the last week had two underlying stimulants: the FED's assurance that ZIRP would end no time soon, and evidence that the American economic recovery is now self-sustaining. Ultimately these are two contradictory forces, since self-sustaining economic growth calls for an end to ZIRP.
3. I can hear the cocks crowing, which always happens on the eve of a market collapse. Bear voices are drowned and the market's champions encourage the fools with promises of even greater profits to come. The louder they shout the clearer the message becomes: we want to sell at the right price!
