Replies to post #13455 on SEASONALITY STOCK REPORTS

[david_3011]

sludgehound- I enjoy reading your take on the market and the econ. The link to CBSMW was a broken link.

In any case, theoretically speaking, increase in M3, while damning to the long-term infrastructure of our economy, is in fact bullish for the stock market, provided that the liquidity goes into the stock market. Unfortunately, that’s not always the case. This is why we should look at the money supply along with other relative and relevant indicators.

One reason for the housing market getting as inflated as it is now is that majority of this liquidity had gone into the housing market. This is why we don’t hear conversation about the stock market anymore when we go to parties. Most of my friends are so apprehensive about stock market that they didn’t want to have anything to do with it. As a side note, this is one reason that made me believe there will not be a “crash” anytime soon. It’d be a trading range though with downside bias. The ingredient lacking comparing to the ’29 crash was the extreme euphoric sentiment. According to the PBS documentary, there was even a number 1 hit song about the stock market in the 20’s.

Most of the conversations nowadays are about the housing market because that’s where the money is. And the overall sentiment in California is still very bullish. I know that for a fact.

So, as long as the Fed kept the discount rates at a negative and the money supply spigot wide open, the party in the housing market is going to go on. Unfortunately, the Fed’s monetary policy has changed.

We’ll keep track of the source of all evil, the supply of money, and see if it’s gaining its status as a good indicator as the tightening of the monetary policy continues. We’ll keep track of all the markets (real estate, equity, bonds, commodities, etc.) competing for the liquidity, and see if we could find some level of correlation among them.

Finally, I’ll try to keep up with your sniffing and see if I could churn out anything “really” fresh. I doubt it, but all I could do is keep on trying.