False Information, Mass Psychology and this Hated Stock Market Bull
By: Sol Palha
GoldSeek.com
Friday, 29 July 2016
em>As long as you keep a person down, some part of you has to be down there to hold him down, so it means you cannot soar as you otherwise might. Marian Anderson
Regarding today’s news, the average person is inundated with unnecessary junk. On any given day you will find experts telling you why the markets are destined to soar and or crash. News outlets are desperate for eyeballs, so they are going out of their way to make titles bombastic, and or offering multiple scenarios so that when one of them comes to pass, they can proudly state we told you so.
The problem is that in most cases the information used to back these scenarios is utter rubbish. On any given day you will find several compelling arguments that call for this market to crash or for this market to soar to the moon. Which one are you supposed to believe, especially when they appear almost simultaneously? Spend some time on Yahoo or any other major finance site and you will see the common theme is bombastic titles trying to get the reader to click and read the article. The most interesting part of the article usually is the illusory title, which hardly ever has anything to do with the article at hand. Today’s reporters like mindless bots assume they can continuously employ the same approach, and the masses will embrace them with the same gusto as yesteryear. Perhaps they are right and then perhaps again there is a trend change taking place.
This brings us to another interesting point. The problem today is that the vast majority of individuals want to live the life of a king but on soldier’s salary. They want to buy things they do not need, with money they do not have to impress people they hate with their guts. Why would they want to do this? Perhaps, the idea is to give their enemies the illusion all is well. Maybe they would be better off if they focussed more on themselves instead paying attention to the opinions of outsiders.
You see this trend everywhere. For example, take a look at what’s going on in the corporate world. Corporate officers are looking for ways to improve earnings per share (EPS) without doing any hard work or coming out with any innovations. The trick, borrow money on the cheap and use it to buy back shares thereby magically boost the EPS.
We have always stated that for any con to work you need two elements the conman and the person willing to be a victim. The share buyback scam continues because the public does not care what method is used to boost earnings as long as earnings look great. If shareholders cared, they would have made a noise long ago. If you look everywhere, you see this trend of doing nothing and wanting more gaining traction. When negative rates debut in the US, it will be like manna from heaven for the Corporate World; they will double down on their share buyback programs, providing, even more, fuel for this bull market. Don’t for one second think the Fed is seriously thinking of hiking rates continuously. The fact that they have done nothing after one miserable rate hike speaks volumes. Their game plan is to follow the rest of the world and embrace the era of negative rates. They have no option but to keep inflating the money supply to infinity or at least to the point when the masses finally state “no mas” and who the hell knows when that day will eventually arrive. A good guess is that many of those who have been waiting and continue to wait for that day will be gone before it comes.
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