Friday, March 18, 2016
Every day I shake my head at the screens...............
Seven years of "the economy is improving, but boy - is it still shitty!" But, but - low gas prices, high stock prices..... everything is awesome but the worse things get, the more central banks ease and the more the market goes up. The problem is, as negative rates have shown, the FED is out of powder despite what they claim. All they will do is more QE, which puts a bigger air pocket between stock prices and the reality of fundamentals like sales and earnings and further expands the wealth divide.
Some days I think there is no market, no economy, only the FED. Armed with an economics degree long ago I thought there was a relationship between supply and demand but welcome to 21st century economics. Where is Roy Grohs to explain this?
If you are the CEO and sales/profits drop, hey, no problem. Call up your local central bank, get an infusion of newly printed money (at 0% interest) and buy up outstanding shares to boost your stock price. What can possibly go wrong?