Bernanke speaks, stocks leap! Why?

tobr24u(z6 RI)March 27, 2012

It seems that Bernanke did not give an exactly upbeat report yet the stock markets around the world soar. Grasping at straws as they expect more stimulus according to some. Your thoughts will be welcomed as mine are muddled (just on this matter)...

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esh_ga

Who knows - it seems like such a game.

    Bookmark   March 27, 2012 at 7:51AM
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chase_gw

The speculation by some is that the Fed will buy up bonds thus encouraging investment in stocks.

It's known as financial stimulus, it's not the infrastructure , job creation type of stimulus.

I have no idea if it works except to say that every time there is a hint of it stocks shoot up. Whether he does it or not I'm happy to have him keep on talkin'!

    Bookmark   March 27, 2012 at 7:58AM
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labrea_gw

"When Royal Bank of Scotland (RBS) boss Stephen Hester waived his 963,00 0pound bonus in January this year, he wrote a candid letter to his staff revealing the motive behind his decision. Hester confessed to workers at the largely state-owned bank that press coverage "had been discomforting to say the least".

Hester's surprising admission proved that even bankers are not immune to the psychological pressures of a guilty conscience. The newspaper articles had expressed outrage that a bank, which was bailed out with 45 billion of public money, had paid 785 million pounds in bonuses for 2011 despite losses of 2 billion pounds." (theres a little fear & greed)

The markets 3 major factors fear, greed & the least practiced patience. Small fry do not drive the market algorithmic trading programs are more often the driving force/combined with prudential (what a joke analysis).

The China bubbles are the major factor I see out there that are like a tillers in this sea of international debt, Punch & Judy & rabbit in hat show.

There has always been great secrecy in the Government controlled economy that tries to shield it's debt problems from they eyes of the rest of the world.
The US has a better Credit rating than China. Historic because China the US never renounced it's debt in it's History. (There are a few in OWS that believe we should tssssk tsilly billy)
China claims a healthy debt ratio to GDP (and Dial takes he worry out of being close) pure puffery.
Some Consultancies in Asia in China are willing to suggests the ratio is not the Government touted 18-18% but more like 80-90% probably much much higher even than that (oh that's not good or bad it's just not factored into the market mythology)
China will pay it's external debt but it's technocrats & economists probably all took classes with US brain surgeons & are seeking ways of creatively restructuring internal errr ummm obligations.
China's last stimulus represent an amount that was equal to 25% percent of it's then economy, You only have to look at Ghost towns like Ordos to see all that growth did'n't necessarily produce anything sustainable,
Great buildings, museums, neighborhoods in Inner Mongolia one problem in a Country packed with people no People, Took a lot of local loans to build all that.

Lot's of Villa's like our empty McMansion developments, this may get paid or these local communities will defaults left & rarely right. This is repeated in many places extensive building programs housing for Hundreds of millions left empty. Infra structure to these communities unused. Huge power grids supplying no one ye you still have masses of people living in very crowded miserable conditions in manufacturing areas. Rather hard to commute from Northern China's inner Mongolia to Guanndong where housing is still a problem. Not if your managerial but your average workers (beware the workers) still face unaffordable housing.
Whats affordable when your making etch o sketches or I pads
Pie in the Sky. A lot of wealth has flown out of the country where memories aren't that short> Hey he used to be our Part Block leaeder now he's a Billionaire give me a break.

Old news!

The proposal, sent by the Guangdong provincial committee of the Taiwan Democratic Self-Government League, gave the example of Shenzhen, where only 20,000 low-cost apartments have been built, compared with its goal of having more than 169,000 completed between 1996 and 2010.

In Guangzhou, the provincial capital, only 26.5 percent of 2010's targeted investment for affordable housing has been met.

My guess there will be a collapse of local economies within China's (just a guess) Foreign banks will buy up some assets and Internationalization will move merrily along it's way

Here is a link that might be useful: WSJ

    Bookmark   March 27, 2012 at 8:19AM
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