You can't eat speculations, to some degree, you can commodities, but dude, you is only looking at one spoke that holds up the wheel......

WebsterMark wrote on 01/22/14 at 06:19:42:


You are defending the company you work for...
I'm not attacking it,.. or any company...
What I'm saying is that the value of these companies is now based more on the amount of money investors have in them, than in what they produce...
Investment has become disassociated with a companies efficiency...
Investment money is now automatically coming out of paychecks every week... and it must be invested every week... regardless...

Thats a very written post...long and thought provoking.

The FED ... in and of itself would only be marginally connected to the stock market. Right now the connect is very tight and dramatic... but thats only for now.

The stock market, is corrupt and has been for several decades. Companies that use to be called Stock brokers ( now rolled up into "banks" so they could be saved) have certainly a huge shoulder of blame ( IMO).  
I think you are correct that the price of stocks has been "bid up". Is this due to blind trust by the everyman investor? Or by brokers who get a commission on the sale price? In the past yes to both... but that is not what is currently bidding up the price today

The current stock market bubble is being created by the FED (see your still right). The FED is "printing" money and loaning it to the banks, but with the stipulation that it cannot be loaned. Loaning the money would increase the "velocity" of money and cause inflation to be appearent. This is what happend in 1981. Instead the banks have all this money they cannot lend... so they invest in the stock market.
This is "good" for the politicians as they can point to the stock market and claim the economy is recovering. It is good for business who get a cheap influx of captial cash... it is GREAT for the "banks" who get free money to earn money on in the market.
However, this does and has inflated the stock market itself. But to me, its much worse than that. It has set the "banks" up for an even bigger win. The FED WILL tell the banks when the QE stops before they tell anyone else. When the QE stops, the banks will be let off the hook and can lend that money. They will withdraw their stock investments, cause the market as a whole to drop. The really bad thing is THEY and only THEY KNOW the timing. Everyone else that were forced to pay high prices for stock bid up by the free money the banks used, will be stuck holding these overpriced stocks. Thier money will be gone, or locked up. In the mean time the banks will begin loaning money, velocity will increase and interest rates on both sides will go up ( a good thing) to a reasonable level. But, now only the banks will have the liquid cash to make loans.

This is why the FED is having trouble stopping QE. The current economy is built on system with QE in place. Stop the QE, and the economy will shift another system. But the bubble is place for the stock market, and there is very little to be done to deflate that bubble short of popping it.

Of course all this ignores the government side of things. For instance the cost increase the government would have to pay on the national debt would be greater for each perceantage point the interest rate rises. Debt is not going down, and at some point there is a real issue to being able to just maintain debt interest payments.

Serowbot wrote on 01/22/14 at 08:15:52:


Why are plain folks doing this???

Because the FED has killed interest rates. What does a retired person with say $20K suppose to do with it? Let it earn .01 percent per annum? So they are FORCED into the stock market... but the market is already inflated by the banks... and by others just like them.

Thats all very sad. But again.. not as sad as when the banks pull out and market drops leaving the masses upside down in the market.

http://www.multpl.com/shiller-pe/

A graph showing the average price to earnings ratio. Now, look at it & look at the years. Think back to when things were working better. Look at those years & the P/E ratio at that time,

Another problem with the market today is the high frequency trading, done by computer,, not some guy you call & tell him what you wanna do. The BIG firms arent making their $$$ handling trades for people.. theyre trading for themselves, using computer programs & buying & selling in millisecond events.

Buy on bad news, sell on good.
looks like you've seen a lot of bad news.

pg wrote on 01/24/14 at 15:22:23:


So? How does that affect you? What do bonuses paid to others have to do with you?