After the market bottomed in March 2009 every single dip along the way has turned out to be a tremendous buying opportunity. The S&P500 tagged a new all time high yesterday. This morning, another terrible terrorist tragedy overseas has done little to dampen the euphoria in the stock market.
Every dip along the way was just a prelude to the next market crash....right?
And then we have all those crash callers over the last 7 years. Every few months telling the world the stock market is on the cusp of the next big crash.
Late last year he just stopped writing. Perhaps he retired, moved on to another job or position. Or perhaps he squeezed the crash call lemon dry? Let's face it. Barring a surprise end to the world, the market will crash again.... right?
The interest in market crashes has settled down recently.
And with the stock market, it usually does the exact opposite of what everyone thinks it will do.
Even after the market moved off its lows in March 2009, it took many moons for the excessive bearishness to subside. The crash was just a prelude to an even bigger crash. No one knew back then that the market would spend the next 7 years soaring higher than ever before.
But at what cost?
One headline I saw yesterday went something like this:
"Great News! Stocks Hit New Record Highs!"
Great news? For the rich it means another summer home on their own private island. For the rest of the country it means the shoe shine industry is doing well. Great news? When we have put at risk the prosperity of future generations to artificially inflate asset prices in the hopes of bringing back inflation? Great news? Why are interest rates at record lows? Why is the FED not raising interest rates. Why is the Bank of Japan ready to throw billions of fake money at the market. Why is the ECB in the corporate bond market. This is not great news. Great news would be a global economy functioning on its own free will. Great news would be interest rates where people could save their money not throw it into risky financial products.
When the FED announced operation Twist in September 2011, I recall Ben Bernacke being asked about the savers of this country. He said they needed to sacrifice for the better good and that down the road they will be better off for it. It is now almost 5 years down the road. Interest rates have never been lower. After being taught to save your money , in 2016 saving money is about the dumbest thing you can do with it.
The stock market at record highs is Great News? I beg to differ.