Following a concerted action by most major governments stocks have rebounded and have powerfully surged upwards on Monday:
(click on image for closer look)
Is anyone (besides traders) really buying this?!
Have anyone heard anything which should lead us to believe that the fundamental (structural and political) issues which have triggered last week’s panic have been addressed?
Is there any reason to believe that the dollar, and therefore the entire US economy, has some real, non-virtual, foundation for its value?
Is there any reason to believe that the massive deregulation which made it possible to create a “bubble-driven market” (think of it as a pyramid scheme) has now been brought under control and that Wall Street and the banks will now police themselves?
Oh, and by the way, what will these bailout plans do to our debts?
Yes, stock brokers are buying like crazy because that is what they are good at: making a killing during a bubble. Because this exactly what this all is: a bubble. Let me repeat:
Get it? Nothing has been fixed and no underlying cause has been addressed.
This latest bubble too will burst.
… much sooner than earlier.
Just more manipulation. There is absolutely no change in the fundamentals to warrant this. None! It’s just a scam VS that’s all it is. Who are the beneficiaries of all this economic speculation? Why, all the usual suspects of course!
Saker,
I haven’t posted in a while. I would say that the key problem in all this is not regulation, but central banking. When a cartel of private banks control the money supply, this is precisely what you get. And they have the money and lobbying power to force the government to extract tribute from taxpayers. The Fed here and basically the ECB, BoE etc are all the same. A gold standard with an end to the confidence game known as fractional reserve banking is what we need.
As for today’s mega rally…well I can’t time the market and so can’t say when it will end, but bear in mind monday was a semi holiday with banks and the bond market closed. That makes for more errratic trading. Also October options expire on Friday, which is also a cause of volatility. And also nothing goes in a straight line forever. After a big drop “bargain” hunters appear.
That said…things will be getting ugly. Maybe not today or tomorrow, but soon and for a long time.
Remember Thomas Jefferson;
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
* Letter to the Secretary of the Treasury Albert Gallatin (1802) and later published in The Debate Over The Recharter Of The Bank Bill (1809)
@lysander: I fully agree that central banking is a core factor in the issue. Ditto for the abandonment of the Gold Standard and the practice of fractional reserve banking. Very good points.
I did not mean to deny any of that, I was just pointing out that when the banking industry is tasked with self-regulating itself it will naturally lean towards using a maximum of “accounting creativity” to maximize its profits. Then, benefits will be privatized while risks and costs will be socialized in good ole Fascist fashion.
But yes, (re-) regulating banks is not a panacea as long as central banking and fiat money is still out there.
I’m a few days back in world events but I thought today what about China? Why they are nowehere in the mess? Then I came across this text:
World Markets Go Insane With Joy–America Commits Economic Suicide
http://elainemeinelsupkis.typepad.com/money_matters/2008/10/elaine-meinel-9.html
A quote – “I will note that China is silent about all this. Has been remarkably silent as they watched the US flounder, Europe scramble and nations begin going bankrupt. They knew that if they pulled us out of this forest fire, we would stab them in the back. Instead, they waited until we crawled to them for help. Now they have plans to deal with the resulting flood of funny money this rescue will pour into the Chinese FOREX reserves.”
Read the whole article and the other from the blog.
Second thought. Think about the “new regulations” as an excercise on global scale what can be done or achieved and to what extent(!) in terms of controling so called “world opinion”.
I do not say it (the financial crisis) was purposely envoked but as it happened it created also excellent conditions to check the “global flow of money with behind-a-door control”.
I only wonder who was the inventor of the perpetuum mobile system of “infinite money lending” about which Elaine Meinel Supkis wrote in her text.
Have a nice day.
And the last hyperlink from my side with all the sums involved in the “crisis”:
In Case You’re Keeping Track
http://www.campaignforliberty.com/blog.php?view=1979