Financial Markets: Negating the Laws of Gravity

Pivotfarm's picture

Usually what goes up normally ends up coming back down to Earth with a damn great thud. Well, that was long ago with good old Isaac Newton and the apple story. Apple might well be part of the story these days as an example of things that are going up but that have ascended so high for the moment that they have almost vanished from sight. But, there is simply no reason to defy the laws of Newton on Gravity. Negating the laws of gravity in such a way as to turn Newton on his own head is exactly what the stock market is doing right now. Antigravity might not exist in the real world but there is a theory that is refuted by the Gravity Establishment as to the means of blocking gravity effects on bodies. Have the stock markets and the financial wizards just put that into practice and is there some way of explaining why the stock market has increased yet again with no apparent reason?

When there’s good news these days the financial markets increase. When there’s bad news it just does the same. The laws of cause and effect, the theories of rising and falling? They don’t hold anymore, apparently. You can change the text-book baloney and learn how things really work today. Increase in the markets happen whatever you do.


DJIA and Market Reaction?

  • Yet again the Dow Jones Industrial Average increased on Friday 25th Octoberclosing up (with an increase of 0.4%).
  • That’s the 11th time in a row out of the last 13 trading days.
  • It seems like this is becoming the norm.
  • The DJIA had already increased 11 times in a row out of 12 trading sessions inSeptember 2013.
  • Is this a taste of things to come?
  • All of that in October has been right in the midst of the US federal-government shutdown fiasco and the dire figures that have just been released on unemployment in the country.
  • The official figure for unemployment in the USA has dropped to 7.2% (with a reduction in unemployment of 148, 000), but that’s only because there are people that are so discouraged from actually seeking employment that they have been dropped from the figures.
  • Real unemployment is double that figure today, but governments will never talk about real unemployment figures.
  • It wouldn’t do to sap the moral of the people would it too much; better to stuff the growing unemployed numbers behind some other less-important problem like what a neutered male Portuguese-Water dog might be up to in the gardens of some house along Pennsylvania Avenue.
  • Jobs haven’t been created any more than the Federal Reserve’s efforts on Quantitative Easing have done anything to improve the stability of the US economy.
  • The agreement between the Republicans and the Democrats is only temporary and will by January 2014 end up on the political and economic agenda once again.

The financial markets are therefore increasing with no real apparent reason to do so. Where’s the justification and are they defying the laws that have been established for decades now? Once upon a time bad news in politics and economic turmoil meant a crash. Now, it seems as if whatever happens, the stock prices just rise and carry on rising.The financial markets are disconnected from the reality of the economy and on a drip feed direct-line into the Federal Reserve these days. It won’t take too much analysis to see that it’s when the financial markets become isolated from reality. The financial markets are suffering from a depersonalization disorder and that spells trouble: Bubble Trouble!

How wrong could the Federal Reserve have been pumping $85 billion a month into the economy (or rather giving it to the banks to play on the stock markets with and then strike it rich)? How on earth was it possible to imagine that if you give someone such a sum that they will hand some of it out to the people down below? Ben Bernanke threatened in veiled false promises to throw us the money from his helicopter. We never even saw it before it got carried away in thebanksters’ wind. It was just a lot of hot air, wasn’t it?

The market is supposed to reflect the buyers demand for a share and the availability of that stock on the market. But, the prices are too high and way above what they should be simply because the economy is not sustaining the increases in prices of shares today. The growth of the economy is so slow; it’s almost non-existent. How is it possible for a share price to be maintained if the economy is not increasing too?

  • Apple’s shares are valued at 13 times more than the profits that are generated by the company’s annual earnings per share today.
  • Google is valued at 28.4 times its earnings.
  • Facebook is way ahead and stands at 229 times its share earnings.
  • That’s a price-earnings ratio that is out of control today and they are just a few of the examples.

The US financial markets are surfing on a wave; but usually waves end up breaking and they come crashing down too. The smile will be wiped off the face of the financiers. The only question is when exactly that will end up happening. It would certainly be worth our while to cash in now and take the winnings and to certainly go elsewhere rather than invest in the Federal Reserve’s self-created bubble. It can only spell trouble, with or without Bernanke’s help.

Defying or negating the laws of gravity is impossible. You might be able to create a shield to block it and it might just be that sort of thing that has happened with the QE-injections of unconventional monetary policies. Bring on the loose money…forever! May the increases commence (yet again) on the stock markets!

hould we get rid of the rating agencies? Rate them yourself!

Originally posted: Financial Markets: Negating the Laws of Gravity

 

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