Saturday, May 4, 2013

The Coming Tale Of Woe For Retail Investors

     If you are looking to put money to work in the stock market because it hit an all-time high during intra-day trading on Friday, do not be the dope in the market's rope-a-dope scheme. The unemployment numbers were released yesterday and they paint a very dismal picture for the current economy and for the stock market in the near future when Lord of the Fed Ben Bernanke, who gave it will take it all away, causing a collapse.
     You say that you heard the employment numbers were stellar? Well maybe if you only look at the manipulated U-3 number, but the government's own U-6 number (which counts all the unemployed) actually ticked up to 13.9 percent from 13.8 percent last month. Additionally, the number of part time workers has climbed as well and will continue to do so as companies trim employee hours to avoid ObamaCare requirements. The Obama administration is crowing about adding a pathetic 165 thousand jobs, half of which are people who have given up finding employment and are now counted by this administration as "employed." And while we are four years into a recovery that the administration said would be netting 600 thousand jobs a month by this point, the mavens of Wall Street have used the over-hyped numbers as an opportunity to pull unsuspecting retail investors into their web.
     Wall Street sharks have used the government's bond-buying binge with printed money like a bar uses an alcoholic's binge to sell more booze or a casino uses a gambler's binge to win more of his money for the house. The dunces in the financial media play along with the artificial market as if it is actually based on fundamentals. The fact of the matter is that fewer companies are expanding their bottom lines, and by less of a margin, than pre-recession norms. But then, in the Obamaconomy, the new norm is a pathetic mediocrity that floats down the river of low expectations. If it were not for Federal Reserve Chairman Ben Bernanke printing 85 billion dollars a month in funny money and using it to buy 80 percent of the federal bonds sold, the stock market would be well under the 10,000 level.
     The professional traders on Wall Street like Warren "please raise my taxes" Buffett, have pushed the market higher because Mr. Bernanke has kept bond rates at an almost zero return with his quantitative easing program. But they also know that Blathering Ben is going to have to discontinue his binge and start to pull all that printed money out of bonds in the near future. This will cause interest rates to rise, making bonds more attractive, and the wheels are going to come off the equities market. Of course, those professionals like Mr. Buffett will be long gone, having sold their stocks at a premium to unsuspecting retail investors who will be stuck in a rapidly sinking market, having been the victims of  "buying high and selling low."

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