Today's Market
by Dr Invest

The market continues it cocky and confident climb, pushing the prices of stocks higher and higher. It is a "trader's dream come true", especially in the light of promised rescues by the FED and ECB. Vanguard founder declared today, "Not investing in stocks a big mistake". The headline next to it  read, "Don't expect the Market Ralley to Last". One financial author headlined: "The rich holding cash - and that's not good." Not everybody can be right, somone is not seeing the true market condition and there is gonna be a slip on the banna peel.

It is true that the rich are holding cash. But did your ever ask yourself, "Why?" Why are the rich not investing? What do they know that you don't? Listen, there is a reason they are rich. What about major companies and corporations holding back trillions in cash? Why will they not invest? And what about the banks, flush with taxpayer's cash and client's cash from an over abundance of fees, why are they not lending money? What do all these companies and individuals have in common?

They know hype from truth. The economy is gutted and world banks and central banks cannot deliver what they promise. Not one person would invest into the market if they knew that they would lose 40% of their money in six months.

Never has the stock market grown so quickly where the fundamentals were so weak. The fundamentals point to world-wide recession, but stock prices point to a dramatic and vibrant economy. These two ideas conflict and one will be extinguished.

The John Hussman Report

If you care about your investments, please go to Hussman Funds and read this report. You will then understand why rich people are out of the stock market right now.  http://www.hussmanfunds.com/wmc/wmc120730.htm

Quote:

The enthusiasm of investors about central-bank interventions has reached a pitch that is already well-reflected in market prices, and a level of confidence that with little doubt, investors will ultimately regret. In the face of this enthusiasm, one almost wonders why nations across the world and throughout recorded history have ever had to deal with economic recessions or fluctuations in the financial markets. The current, widely-embraced message is that there is no such thing as an economic problem, and no such thing as risk. Bernanke, Draghi and other central bankers have finally figured it out, and now, as a result, economic recessions and market downturns never have to happen again. They just won’t allow it, printing more money will solve everything, and that’s all that any of us need to understand. And if it doesn’t solve everything, they can just keep doing more until it works, because there is no consequence to doing so, and all historical evidence to the contrary can finally, thankfully, be ignored. How could anyone ever have believed, at any point in history, that economics was any more complicated than that?

Concluding Thoughts

From my vantage point, I see the bridge out down the tracks. Now is not the time to throw more logs on the fire and get a full head of steam. This is the time to shutdown the boilers and wait for the bridge to be repaired. The bridge is DEBT and stimulating debt is not going to bring more prosperity.

(note: the above article is for entertainment purposes only and not to be used as investment advice.)