STAFF NEWS & ANALYSIS
New Dow Record Expands Wall Street Party
By Staff News & Analysis - May 01, 2014

The Dow Jones industrial average rose to an all-time high on Wednesday after investors assessed more corporate earnings, the latest move from the Fed and an unexpectedly weak reading on economic growth in the first quarter. Sealed Air, a food packing company, and C.H. Robinson, a freight company, were among stocks that rose after reporting earnings. On Wednesday: The Dow Jones industrial average rose 45.47 points, or 0.3 percent, to 16,580.84. For the week: The Dow Jones industrial average is up 219.38 points, or 1.3 percent. For the year: The Dow is up 4.18 points, or 0.03 percent. – MyWayNews

Dominant Social Theme: Things are looking up and stock market averages reflect that.

Free-Market Analysis: So the Dow has hit a record high.

We told you so. There is NO reason for the Dow to go "up" so much. The US is mired in a quasi-depression, Europe is in chaos, China continually faces a hard landing and the BRICs generally are struggling.

Where is the growth to come from? What is the rosy scenario that stocks are reflecting? What do the wise men of Wall Street see that we do not?

In fact, these are seemingly purely manipulated markets. And they have been for a long time. It's just more obvious now.

The manipulation, in fact, began in earnest after the Civil War, when the forces of mercantilism in the person of JP Morgan were unleashed in full. At one point, Morgan was said to effectively control 30 percent of the US's gross national product.

It's been downhill for the US's "free-market" system ever since.

The 20th century – the century of central banking as it shall be known in the future – was filled with ups and downs, but more downs unfortunately than ups. We can see the downs because looking back we can see clearly that the wise men of central banking did not add value with their considerably flawed forecasts.

The Western world is not better off in the 21st century than in the 19th, and there is little prospect that what didn't work in the 20th shall somehow miraculously improve over the next decade or two.

In fact, this miserable recession – quasi-depression – has been going on since 2008 and despite talk of green shoots and various forms of recovery, it looks set to continue.

Yesterday, AP issued a report commenting on first quarter numbers in the US and explaining why the Dow reacted by roaring upwards.

Building on a "wall of worry" as it were. Here's the beginning of the AP article, including some comments on the Fed:

US economy slowed to 0.1 percent growth rate in Q1 … The U.S. economy slowed drastically in the first three months of the year as a harsh winter exacted a toll on business activity. The slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer weather.

Growth slowed to a barely discernible 0.1 percent annual rate in the January-March quarter, the Commerce Department said Wednesday. That was the weakest pace since the end of 2012 and was down from a 2.6 percent rate in the previous quarter.

… No major changes are expected in a statement the Fed will release. But it will likely announce a fourth reduction in its monthly bond purchases because of the gains the economy has been making. The Fed's bond purchases have been intended to keep long-term loan rates low.

In its report Wednesday, the government said consumer spending grew at a 3 percent annual rate last quarter. But that gain was dominated by a 4.4 percent rise in spending on services, reflecting higher utility bills. Spending on goods barely rose.

Also dampening growth were a drop in business investment, a rise in the trade deficit and a fall in housing construction. The scant 0.1 percent growth rate in the gross domestic product, the country's total output of goods and services, was well below the 1.1 percent rise economists had predicted. The last time a quarterly growth rate was so slow was in the final three months of 2012, when it was also 0.1 percent.

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Does this sound like a world-beating economy recovery to you, dear reader? Not to us, either. And that is just the point.

We've been arguing that Western markets – especially US markets – are increasingly detached from fundamentals in the 21st century and that a variety of monied, elite forces are in control.

In aggregate we call what is occurring a Wall Street Party.

It is perhaps the last fling of the modern era's capitalist "dreamtime." It is perhaps the "final adjustment."

  • The IPO conduit is filled with phony green solutions to non-existent problems that the power elite intends to monetize to endow them with fleeting credibility.
  • The plunge protection team is no doubt working hard in Washington DC buying futures in order to ensure an orderly and continual ascent of the stock market.
  • Janet Yellen and Mark Carney, two central bankers known for their dovish approaches, are priming money pumps for continued and expanded printing for the foreseeable future.

And money continues to flow into stock markets from commercial banks and their corporate clients.

When the news is good, stocks go up. When the news is "bad," stocks make a new record.

Yes, this may be equity's last hurrah. After what may be a remarkable push toward 20,000, markets will inevitably collapse as they always do and the resultant chaos may be utilized to create a far more globalized monetary system.

Already the BRICS have created their own IMF and World Bank: The dialectic is increasingly easy to observe. Eventually East will meet West and a truly international system will be constructed.

But first there is a party to throw, or so it seems. We figure it may last another year or two, anyway. After that, perhaps, will come Something Else.

After Thoughts

Are things proceeding to plan?

Posted in STAFF NEWS & ANALYSIS
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