Replies to post #176390 on Tornado Alley (PROG)

[SilverSurfer]

Look at this statement in a Reuters 'news' article on the Yahoo main page today....Not what you normally hear from the media but true...

"Stock market rallies in each of the past three years were fueled by combinations of massive central bank and government stimulus spending. That maybe the only hope for equities this year, too."

and this....

"I don't see any compelling reason to think that we are going to have any sustained recovery absent new fiscal, monetary stimulus, not only here in the United States but perhaps even more importantly elsewhere around the world," said Clark Yingst, chief market analyst at Joseph Gunnar.

Yingst said that signs of more stimulus may be a compelling reason to get bullish.

We will be "watching very closely for new fiscal and monetary stimulus from a variety of countries. I think the source will be important, I think the magnitude, the scope will be important," he said."

2009, 2010, 2011, and probably 2012 stock markets, which equals the banks and big corporations, kept afloat by Central Bank and Government Debt/Liquidity. Will these entities (banks and corps) suddenly reach some kind of critical mass and overcome the tremendous World OverDebt problem in 2013 or 2014 because the Central Planners poured on More Debt? Debt the citizens are directly responsible for and victims of via punnishingly low interest rates (on savings) and dilution of the currency (raising costs of food and energy the things we need and the things we own, like real estate, not allowed to go through price discovery) and crippling uncertainty (the money does not get loaned). Excessive Debt/Liquidity that has gone and goes into the pockets of the leverged HIGH RISK takers, who should instead, pay for the problem (by failure). Just asking?

http://finance.yahoo.com/news/wall-street-week-ahead-time-210044240.html

http://www.americanbanker.com/bankthink/uncertainty-crippling-bank-stocks-killing-mergers-and-acquisitions-1046951-1.html

[SilverSurfer]

fuagf, the very unfortunate reason interest rates have to be kept so drasticlly low? The Central Bank, as the Papa Bear of all the banks and financial markets, is directly responsible for loss of control in the derivative industry that built and built risk right under the nose of Alan Greenspan and especially Ben Bernanke. Debt, in history has gotten out of control many times but 'this time is different'. Now banks, hedgies, speculators, any and everyone, thought - thinks, they can assume levels of risk that otherwise would never be considered because they can 'insure' with derivatives, Credit Default and Interest Rate Swaps or spread the risk with Debt Securities or Obligation Instruments. This truely false sense of 'security' backed by no reserves in case of calamity, was allowed by the Primary Regulator, the Central Bank. All the players in the game are to blame, yes of cource, but in a normal free market they would pay for their mistakes. Failure is a good thing in a free market because it rids the sytstem of dumb participants, facilitates price discovery on assets, creates opportunity for well run entities, and discourages excessive risk. Too Big To Fail is the most ridiculous and destructive concept a financial market could ever become subject to, imho, because it takes away the very healthy mechanism to clear out the garbage, plow the field, and fertilize the garden of finance/business. But TBTF is alive and well and the very reason interest rates have to be kept low. If the few remaining survivors, the U.S. - Germany - China sort of, and the Multi-National Coporations can't grow more debt, at ultra low cost, then it is game over QUICK. That market of debt issuance has been leveraged to the max by SWAPS and such, just like every other market, so if the debt creation of new money were to become unworkable, like any other pyramid/ponzi scheme, failure comes suddenly when there is insufficient new money to service the clients uh... victims.