QE3 succeeds: retail sheep back to the slaughter once more

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.
Households buy the top

This entry was posted in Main Page. Bookmark the permalink.