I guess you do have to hand it to those bankers; maybe they are brilliant after all. They wagered that if they could keep pumping up the stock market long enough via QE and creative accounting manoeuvres, the little guys who had fled in tatters in 2007-09 would finally be sucked back into the fray at cycle highs once more. Its a maniacal cycle to witness: central banks pump “free” (taxpayer-backed) liquidity into the investment banks and hedge funds off the market bottom, which allows them to buy (when price risk is the lowest) from all the retail investors who are selling in panic with huge losses. Then after these “strong hands” have enjoyed every conceivable concession and advantage, they take profits and raise cash by selling down their equity holdings back onto the retail crowd just as price risk moves back toward cycle highs. Waiting to repeat the cycle all over again. Seducing and then slaughtering sheep is a very lucrative business model indeed.
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Cory’s Chart Corner
Many will focus the blame of market drawdowns on the tariffs and ignore the fact the SP500 (only a few weeks ago) was trading at 4 std devs above its historical mean…valuation also matters.
The Kobeissi Letter @KobeissiLetterBREAKING: The European Union is preparing further counter measures against newly announced US tariffs of 20%, per CNBC.
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Danielle’s Book
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