For the past week the world markets have shown positive gains

[Subdivisions]

only after the Fed and the EU Central Bank "injected" billions of dollars. Today, the Fed injected another $7 billion and, sure enough, the markets are showing gains, but just barely.

Isn't this sort of like a game of keep the balloon in the air wherein failing to do so will bring it to ground resulting in a resounding "POP!"? The one sure aspect of this game is that the balloon ALWAYS ends up having burst.

Meanwhile, the side effect of this game is not so much the advantage of physical exercise as it is the devaluation of the US dollar. And that, merged with the bursting-balloon that is the stock market, means severely troubling time ahead.

No?

[redqueen]

1. That's what I think...

but what the heck do I know?

To hear my wanna-be-rich republican associates tell it... this is just a blip... nothing to worry about... a minor correction.

*sigh*

[PDJane]

2. Yes.

the balloon was not and never has been sustainable. Put the fed in government hands, and elect folks who can steer the ship of state, preferably really good democratic candidates.

[TechBear_Seattle]

3. Read this post

I mean THIS post. :hi:

The American market fall of recent days was preceeded by a similar fall in other world markets. With other markets recovering, ours will very likely follow. National and planetary financial markets have a lot of inertia; you cannot restart them over night.

[Subdivisions]

5. Good post and I like the "pushing the string" analogy. n/t

[Warpy]

4. The awful truth about subprimes and the hedge funds that

counted them as assets is finally starting to dawn on a lot of investors.

Individual stockholders will lose paper profit in the short term. However, there is more holding ordinary stock up than there is pushing it down.

The people who will get hurt in this one are the institutional investors who thought hedge funds were a great idea to goose the profits: banks, brokerages, pension funds, and some mutuals. A few greedy investors who were lured by the high returns promised by hedge funds and ignored the high risk will get hurt, but they're the minority. Most investors who dabbled did so with only a small part of the portfolio.

It will be interesting to see how the bailouts will be distributed. My best guess is that banks will get the lion's share, followed by brokerages. Pension funds will get kind words, alone.

[TahitiNut]

6. Equity markets are inflated - too many dollars chasing too few enterprises.

The Investor Class has relied almost exclusively on 'technical' market analysis - essentially numerology and superstition under a thin veneer of 'behavioral' metrics. Of the marginally substantive measures, P/E is being chased by the rape of the working class. But that merely decimates the product market from the demand side. Stupid.

[screembloodymurder]

7. No, it's more like keeping the air in the balloon so

we don't hear that psssssssshing sound.