Bigworld, Thanks for the Rinear update. The bottom line with the made-up economic data is that it still moves the financial markets as if it was legit data, at least in the near / mid term. Longer term, the actual economic situation (debt bomb, etc) will win out, but that might take years. So for us investors to make money in the market in the near / mid term, we need to act on the bogus data as if it was real. So we basically live in a financial 'twilight zone', lol.
Since the Fedsters routinely cook the data to fit their desired goals, the main question for us investors is to determine what the Fedsters want at any given time. If we assume they want the incumbent to win the upcoming election, then the Fed should logically want the financial markets fairly buoyant over the next 6 months, or at least stable. The Fed has to balance their main job of getting lower inflation, with the added goal of helping Biden. Juicing the stock market will help Biden, but hurt the inflation battle, so I figure we're likely in for a sideways market with a modest upside bias.
That may be the Fed's goal, but they can't control everything, and numerous landmines are lurking out there beyond their control. But assuming nothing blows up, the next question for investors is whether the modest potential upside over the next 6 months is worth the risk? 6 months in the money market will produce a profit of 2.5%, so the stock market return will have to beat that enough to make it worth enduring the risk and volatility.
Fwiw, I may decide to stay in stocks with 5%, but probably no more than 10%. Once the election is over, assuming Biden wins, then the stock allocation can return to 15-20%. The election angst and uncertainty will be over, and the Fed will be free to start lowering % rates. If Trump somehow wins, then the drama is just beginning, and all bets are off. Very unlikely though imo, since they clearly don't want Trump, and can presumably just tweak the vote count (again).
The wild card that worries me is that a neocon wingnut will want Biden removed to ensure a Rep administration, since that's they only way to get the 'US bombs Iran' scenario. Iran is reportedly very close to getting a nuclear weapon, and Biden & Co appear adamantly opposed to 'US bombs Iran'. So from the perspective of the extreme neocon wing, something has to give. But it's possible that Biden has already secretly agreed to 'US bombs Iran' for sometime after the election, in which case all sides will be satisfied. The Trilateral and Bilderberg crowd keep Trump out of office, and the neocon side gets the US to destroy Iran's nuclear program. So that might ultimately be what happens, and the election is a sleeper, with Biden either winning outright with a slight margin, or via a certain amount of vote tweaking if necessary. But just a guess, and we'll see what happens.
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