THE STREET WILL PRODUCE A MASSIVE SANTA CLAUS RALLY FOR THE ENTIRE MONTH OF DECEMBER...BASED SOLELY ON THE FED'S HYPER-LIQUIDITY AND THE TARP SPENDING...
MOST OF THE FED MONEY IS "TRAPPED" ON WALL STREET...LITTLE OR NONE IS TRICKLING DOWN TO MAIN STREET...
BUT THAT DOES NOT MATTER ANYMORE...
STOCKS ARE TRADING ON "STORIES OF THE DAY"...NOT ON SALES OR GROWTH...
THERE WILL BE GROWTH IN SPECULATION ON ASSET PRICES... BUT THAT IS EXACTLY WHAT THE BAILOUT MONEY WAS SUPPOSED TO DO... RESTORE SPECULATION!
YES, IT'S ALL FAKE ...AND IT WON'T LAST BEYOND THE NEW YEAR...
BUT THE NEED FOR WINDOW DRESSING AND SOME SENSE OF NORMALCY ON WALL STREET IS SO IMPORTANT TO INTERNATIONAL CAPITAL NOW...THAT THE FUNDAMENTALS WON'T MATTER...
WATCH FOR ALL BAD NEWS TO BE IGNORED...EXCEPT IN CASES WHERE A SPECULATION HAS BEEN OVER-BOUGHT... THEN BAD NEWS WILL BE AN 'EXCUSE' TO TAKE PROFITS AND SQUEEZE THE SHORTS...
WHETHER THIS STRANGE RALLY CAN ACTUALLY CAUSE THE AVERAGES TO RISE SUBSTANTIALLY ... OR ONLY ARREST THE DECLINES IS QUESTIONABLE...
THERE COULD BE A TREADING OF WATER...WITH A SLIGHT UP TREND...SAY TO AROUND DOW 10,000 BY THE END OF DECEMBER...IF EVERYTHING GOES AS THE FED PLANS...
BUT I DON'T SEE A MASSIVE HEADLONG RALLY...OR PANIC BUYING...BECAUSE THAT WOULD BE SHOT DOWN BY THE NEXT MORNING'S DATA POINTS...WHICH WILL ALL BE HORRIBLE FOR THE REST OF THE YEAR...
BUT NEVER UNDERESTIMATE THE WILLINGNESS OF WASHINGTON TO FUND A BUBBLE IN PAPER ASSETS...IT'S ALL THEY HAVE NOW.
SO WE HAVE OUR NEXT BUBBLE...IT WILL BE IN THE DOW AND S&P STOCKS...AND USED AS WINDOW DRESSING TO LEAD THE MONEY RUNNERS OUT OF A DISMAL 2008...
AS TO 2009...IT WILL BE A CATASTROPHE... BUT THAT'S FOR NEXT YEAR...
NICE WELL-MANAGED DECEMBER RALLIES ARE NOW ASSURED...
