“The path of least resistance in the short term seems to be for stocks to go higher, but to do so sustainably we need to see much stronger economic growth and positive earnings growth,” said Wiegand, adding that he is surprised by the absence of volatility and range-bound markets. – Fox Business
The path of least resistance is up.
Until it’s down.
And we told you so. Remember this DB article from early April, HERE: “Stock Market Last Gasp: Could Equities Jump Up Hard?”
Today, we seem to be at the terminal stage for the world’s economy. And yet there could be a market surprise to the upside. It’s happened before when the majority of “sophisticated” investors don’t expect it.
We analyze elite propaganda. Sometimes we can smell the “directed history.”
Now even the hardiest stock market drummers are having trouble beating the drum of equity optimism.
HERE, from CNBC, a report on a new Goldman Sachs analysis:
Goldman Sachs downgrades equities to ‘underweight’ over three months … Global equities are at the upper end of their “fat and flat range,” according to Goldman Sachs, who downgraded stocks to “underweight” on Monday as part of its 3-month asset allocation. The bank remains “neutral” on equities over a 12-month period and continues its “overweight” position in cash.
This Goldman report surely scratches only the surface of the real difficulties.
The US, for instance, is some $200 trillion in debt when formal and informal promises are taken into account.
The derivatives markets is apparently well over one thousand trillion dollars and eternally balanced on the knife-edge of insolvency from what we can tell.
Germany’s largest bank, Deutsche Bank, is also on the edge of insolvency, as is the Italian banking system.
Lord knows what problems in Europe and Asia have NOT been reported. Corporate, private and government interests are generally insolvent.
The “middle classes” in the US (and elsewhere) have perhaps several weeks savings between themselves and insolvency.
Central banks around the world have printed so much money for so long that banks are starting to charge for the privilege of holding it.
That’s real monetary debasement!
To keep the system functioning for now, central banks are interfering with the market in unheard-of ways.
HERE, from Bloomberg in late April: The Tokyo Whale Is Quietly Buying Up Huge Stakes in Japan Inc.:
Central bank seen boosting ETF purchases as soon as this week … They may not realize it yet, but Japan Inc.’s executives are increasingly working for a shareholder unlike any other: the nation’s money-printing central bank …
It’s now a major owner of more Japanese blue-chips than both BlackRock Inc., the world’s largest money manager, and Vanguard Group, which oversees more than $3 trillion.
The manipulation is clear.
In fact, in our view, there is no “capitalism” in the traditional sense anymore – not in Japan and not elsewhere either.
The world is in either a depression or quasi-depression depending on where you live.
Wars are exploding in the Middle East and elsewhere, and these wars will probably become bigger.
The last two wars ended with the construction of quasi-global institutions: The League of Nations and the UN (with its related IMF/BIS/World Bank paraphernalia.
The next war, now perhaps in its planning stages, could usher in full-blown globalism, perhaps alongside quasi-debt forgiveness.
In the short-term, we don’t except professional and investment choices to become any easier.
Conclusion: The struggle between despotism and market competition is accelerating.