The improvement in the stock market following the quantitative easing (QE) and thus zero cost money has artificially boosted investors’ confidence through strongly improving markets, though in our point of view this confidence is paper thin and it won’t take much to rock investors’ confidence. The moment the stock market drops steeply the confidence will be gone.
The economy is not improving and will not improve, with widespread unemployment of 17%, a constantly deteriorating housing market, and huge private and public debt resulting in some corporate bonds (Berkshire Hathaway, P&G, J&J, Lowe’s Cos) trading at yields below treasury yields. Imagine, if the hundreds of billions of stimulus dollars were able to create only 114,000 (162,000 minus 48,000) jobs in March of this year, what the job creation will be once the stimulus drops away. more...
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The improvement in the stock market following the quantitative easing (QE) and thus zero cost money has artificially boosted investors’ confidence through strongly improving markets, though in our point of view this confidence is paper thin and it won’t take much to rock investors’ confidence. The moment the stock market drops steeply the confidence will be gone.
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