THE CURRENT PANIC SELLING IS BECAUSE OF THE STRANGE NATURE OF STOCK TRADING RECENTLY...
MOST OF THE TRADERS ARE SHORT TERM SPECULATORS...FLASH TRADERS...NOT INVESTORS... FLASH TRADERS TRADE ON THE NEXT SECOND OR MINUTE IN THE MARKETS...NOT THE LONGER TERM
THE FED HAS DIVORCED THE MARKETS FROM THE REAL ECONOMY IN RECENT YEARS... THIS FLASH TRADING IS ALL THAT IS LEFT NOW...
IF THE MARKETS COULD REFLECT THE TRUE STATE OF THE ECONOMY...AND NOT SOME FED LALA LAND WHERE ONLY ASSET PRICES MATTER...THEN NORMALCY COULD RETURN...
THE IMPORTANT ISSUE IS WHAT THE LEVEL STOCKS "SHOULD BE" AT ...IF YOU BACK OUT THE FED AND WALL STREET POLICIES WHICH ARE BOTH TOXIC TO REALITY IN FINANCIAL MARKETS...
VERY LIKELY EVERYTHING SHOULD BE DISCOUNTED UNTIL IT YIELDS BETWEEN 4% AND 5% ANNUALLY...
MONEY NEEDS TO HAVE A PRICE...A REASONABLE "RENT" FOR ITS USE...
IF THE RENT PRICE OF MONEY IS ZERO...AS NOW...THEN THE ECONOMY IS OVER BUILT AND NEEDS TO CONTRACT TO A SUSTAINABLE EQUILIBRIUM...
MY HUNCH IS THAT WE HAVE A DOW 5000 REAL ECONOMY...WHICH IS TRYING TO SUPPORT A DOW 12,000 PAPER SECTOR...
THIS MARKET HAS A LONG WAY TO FALL IF THE REAL ECONOMY CAN NOT "CATCH UP" TO THE FEDS "OPTIMUM" LEVEL OF ASSET PRICES...
