Tim Duy at Fed Watch smells a new bubble fueled by a joblessly loose monetary policy. Meanwhile, at the Financial Times, Roger Farmer would like to see central banks act to sustain the wealth of the private sector by "buying and selling blocks of shares on the open market." Professor Farmer sez:
A stock market rally is not enough. The market must rally to the point where wealth enables households and firms to purchase the goods that will maintain full employment. If this does not occur, and I think this is likely, we are heading for a jobless recovery.Translation: "A stock market rally is not enough. Give us a bubble!" Note the trickle down formulation: rallying markets (not wages!) create wealth that enables households and firms to consume -- also known as the "horse and sparrow" or "manure" theory.
Sandwichman calmly replies, "you say jobless, we say work less!"
Funny he should ask, since the market - and, particularly us "poor" day traders - have been getting our butts kicked, as Goldman Sachs and J.P. Morgan relentlessly drive equities to new post crisis highs on thin volume and questionable trading tactics.
ReplyDeleteAsk, and ye shall receive...
Wall Street song of the week:
ReplyDelete"I'm forever blowing bubbles ...."