This time it’s different right?
Blast From The Past – 6 Years Ago Today…
Six years ago today, with the S&P 500 around 1460 – having risen 20% without a correction for seven months – a handful of Wall Street’s best and brightest joined CNBC’s Larry Kudlow and Bob Pisani to discuss the Goldilocks economy, why the bears are wrong, and where the market is going next. Sometimes, we just need a reminder to snap us out of that recency bias… for example, Bob Pisani: “We have got a global rally going on… and the important thing is… there’s a floor to the market - every time, for the last seven months, they sell the market down for 2 days, it comes right back.”
I love this comment on Zero Hedge:
DOW 2013: This time its rigged!
Timothy Gheitner as “The Manipulator”
Barack Obama as “The Trutth Twister”
Larry Kudlow as “The Retail Inestor Pump Artist”
and Joe Biden as “The Village Idiot”
And as this is the first down week this year for the DOW I’m sure we will hear the same advice as we did in 2007. Keep calm and keep buying.
When will this end? When will the crash occur? The fed keeps printing money to prevent any dip from occuring while inflation will continue to rise. It WILL boil over, the question is when?
Asset inflation often produces something called “wealth illusion,” the belief that pricier asset holdings
…The Fed policy of quantitative easing is designed to rebuild the asset inflation edifice that collapsed in 2008. German banker and economist Kurt Richebächer provided some of the earliest warnings of the dangers. In his April 2005 newsletter, he wrote that “there is always one and the same cause of [asset inflation], and that is credit creation in excess of current saving leading to demand growth in excess of output.”
Richebächer added that “a credit expansion in the United States of close to $10 trillion—in relation to nominal GDP growth of barely $2 trillion over the last four years since 2000—definitely represents more than the usual dose of inflationary credit excess. This is really hyperinflation in terms of credit creation.”
…an economy built on an illusion is hardly a sound structure. We may be doomed to learn that lesson once again before long.