Friday, January 3, 2014

2014-01-03 Friday - Markets Are Doomed

At the beginning of this new year, as I look back over the last few years of extraordinary growth in the markets...most startlingly represented by the chart of the SPDR S&P 500 (SPY)

2014-12-12 Friday Update ( 1 Year SPY Chart)

2014-12-12 Friday Update (10 Year SPY Chart)

...rather than finding myself elated, as seems the wont of every pundit and talking media figure head, I find myself becoming more and more bewildered, alarmed, and incredulous:

After trim to QE, Fed no less committed to stimulus: Bernanke

I stubbornly refuse to believe that the fundamental forces of a normally functioning, healthy, business cycle have been forever neutralized by the ongoing unnatural influence of the Fed's quantitative easing programs.

In this sense, I proudly proclaim myself to be a member of that seemingly most rare, nearly-extinct, group of...

"Last Bears Standing"

There is a scene at the beginning of the film adaptation of H.G. Wells story, "Things To Come" that echos the growing sense of dread and depression that I feel about the future prospects for continued peace and economic growth in the world:

As just one example of the apparently unfettered growth of some stocks in the market that I find so alarming, see the chart for Bank of the Ozarks, Inc. (OZRK)

How can anyone believe that this type of growth is natural...or sustainable?

To my senses, the world blunders on, caught up in a Quantitative-Easing-as-drug induced narcotic haze of euphoria that ignores the growing future liability, forward-promised, unpaid costs of these extravagant gains.

Somethings doesn't feel right. There's too much discounting of risk. There's a strong stench, in the metaphorical air, of "this time it is different".

The prolific printing & spending by governments to artificially support their economies - and the abysmally transparent machinations of market manipulation by the "unseen hand"...are nothing less than shocking.

This will not end well.