# What is driving the stock market to record highs?



## Ralphy1 (Nov 26, 2014)

It seems that the world has as many problems as ever so methinks it is that corporations have downsized, outsourced, de unionized, automated, robotized, and computerized to cut their costs to the point that their profits are soaring.   This surely should make you happy as you probably have a pension or a 401K, or some kind of investments, such as mutual funds or your own portfolio.  So you should give thanks for that tomorrow...


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## rkunsaw (Nov 26, 2014)

Thank you corporations everywhere. My paltry portfolio needs all the help it can get. Don't burst the bubble this time like you done so many times before.


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## Ralphy1 (Nov 26, 2014)

Yes, we have to wonder what Arthur Greenspan would think...


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## QuickSilver (Nov 26, 2014)

I have to say I am concerned.  It's another bubble?  Are we headed for another crash like 2008... it's going to us poor schmos that loose our butts again, not the CEOs or execs..  just like the last time, they will be sure to take their money and park it overseas, while we all lose our retirements.  Scarey!!   Yet, there is still no oversight over their shenanigans... and no one went to jail for it the last time.


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## Jackie22 (Nov 26, 2014)

[h=1]Dow, S&P 500 push further into record territory[/h]Source: *AP-Excite*

By ALEX VEIGA 

The stock market closed out its fifth straight week of gains with another record high on Friday. 

The Dow Jones industrial average and Standard & Poor's 500 index carved out all-time highs, extending the market's gains for the week. It was the third record close for the Dow in the week and the fourth for the S&P 500. 

*The latest records extended a comeback in the S&P 500, which has increased 11 percent since plunging in mid-October. A strong third-quarter earnings season, on top of a recent string of positive U.S. economic data on housing, jobs and manufacturing, have helped put investors in a buying mood.*

Investors on Friday cheered news of an interest rate cut in China and the possibility that Europe's central bank will step up stimulus efforts in the region. 

FULL story at link. 







The Wall Street subway stop on Broadway, in New York's Financial District, Thursday, Oct. 2, 2014. U.S. financial markets surged in early trading Friday, Nov. 21, 2014 as investors cheered a surprise interest rate cut in China and a hint of further stimulus for Europe from the head of the region's central bank. The rally extended gains from a day before, pushing the major market indexes further into record territory. (AP Photo/Richard Drew) 




Read more: http://apnews.excite.com/article/20141121/financial_markets-ad4ead9a0c.html


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## Debby (Nov 26, 2014)

I'm definitely not an expert of any standing on this, but my husband has followed all of this for years and of course, I get to hear all about it.  But this is what I understand:

Quantitative easing is driving the market to crazy highs.  As the Fed keeps 'printing money' out of thin air in an effort to support the economy, and handing it out to the investment banks at little or no interest, those guys are putting it somewhere and that is the stock market.  The more money that is printed, the higher the values the stock market can reach.  It used to be that the dollar was pegged to how much gold America owned but that ended in 1971 under Nixon and in turn the stock market was kind of tied to how much money was in circulation, but with QE, as long as money is being added to the system, it will only go up.

At one point, Bernanke was on record as saying the only reason the central banks are buying gold is for tradition sake(?) and gold is not a currency and yet Greenspan is also on record NOW saying that gold is indeed a currency.  

The Federal Reserve also makes a business of 'lending out' the gold in their vaults (which means they make money off it) to other banks who in turn sell it or use it in their trading schemes.  You have to wonder why when Germany decided they wanted to repatriate their gold which was in American vaults, why did America refuse and indeed refuse to let them even audit it?  The rumour is that it is gone.  America 'leased' Germany's gold?  Say it ain't so.  But a year later the two countries finally agreed that America would return at least 10% by 2020 and when it finally did arrive it was only about 5 tonnes out of the total 3300 tonnes and I have read that the bars were not the bars that Germany had originally sent.  Each country makes their own bars with their own markings etc.,  So perhaps the rumour isn't such a rumour and is more of a fact.  

The rumour also says that that gold was used in the process of forcing down the price of gold.  Put more onto the market at specific times and you can control it's price.  Keep in mind that Libya's leader was openly trading their oil for gold, Saddam Hussein was floating the idea of not using the American dollar for trading for oil, Iran has set up a bourse(market) that would see oil being traded for the euro and now China and Russia have agreed to not use the American dollar in their oil market.

One of the key reasons that America has been able to engage in QE and to keep propping up the economy (and continuously adding to a huge debt) is the fact that they are the reserve currency.  That reserve currency status depends on the value of their dollar.  Any move away from the use of the petrodollar threatens that status.  And if you were no longer the holder of the reserve currency status and your creditors came asking for their money back, where will America be then?

Russian and China have been strategically building up their gold reserves for years unlike stupid Canadian feds who let themselves be talked out of our gold back in 1985 (under Brian Mulroney) by then President, Ronald Reagan.  At that time apparently, the price of oil was 'forced' down ($30 a barrel) and both the drop in gold prices (as a result of Mulroney beginning to sell of 660 tonnes of Canada's gold) and the drop in oil were the factors that ended the Soviet Union.  These were two resources that supported that regime.

I believe two 'banksters' have been jailed as a result of 2008.  One is Kareem Serageldin who worked for Credit Suisse and the other is Sigurjon Arnason who was the CEO of Landsbanki of Iceland.

And yes there are many economists and investors who say it is only a matter of time before another 2008 style crash comes again only this time, they say, QE will not help and it will be bad.  China will likely play a part as it begins to reduce it's holdings of US treasuries as they become worth less and less and becomes reliant more on it's gold holdings which have been increasing year over year.



http://www.maxkeiser.com/2014/06/germany-still-wants-gold-back-repatriation-campaign-continues/

http://www.zerohedge.com/news/2014-...ency-no-fiat-currency-including-dollar-can-ma

http://en.wikipedia.org/wiki/Quantitative_easing

http://www.nytimes.com/2014/05/04/magazine/only-one-top-banker-jail-financial-crisis.html

http://www.reuters.com/article/2014/11/19/iceland-landsbanki-jail-idUSL6N0T942B20141119


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## QuickSilver (Nov 26, 2014)

Great post... way over my head...  I just don't want to lose my A$$.... so whatever is driving the bubble... let's hope it doesn't burst


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## Don M. (Nov 26, 2014)

QuickSilver said:


> I have to say I am concerned.  It's another bubble?  Are we headed for another crash like 2008... it's going to us poor schmos that loose our butts again, not the CEOs or execs..  just like the last time, they will be sure to take their money and park it overseas, while we all lose our retirements.  Scarey!!   Yet, there is still no oversight over their shenanigans... and no one went to jail for it the last time.



We are certainly headed for another bubble....the only question is When, and how long it will last.  The stock market is a continuous "roller coaster", but for the past few years, it is the ONLY venue that allows an opportunity to grow a persons finances.  Money in the bank earns virtually nothing, nor will it until the Fed allows rates to climb....and That can only happen if and when our government begins to look seriously at this nations National Debt, and rewrites our tax codes such that it can begin to reverse this debt.  Gold and Silver are only good as a hedge against Inflation, but again, so long as the Fed suppresses interest rates, inflation is unlikely, and precious metals will go nowhere.  Municipal Bonds are doing nothing, as most cities and states are struggling just to stay even.  That leaves little other than the Stock Market as a means for individuals to maintain, or grow, their worth.

Knowing that, a person MUST monitor their holdings closely, and spend some time, daily, to check on market and global news.  Watching CNBC, or Bloomberg on TV, or reading the financial news on the Internet, etc., is time well spent, and can give a person a good clue as to market direction.  Self management of an IRA, or portfolio is a Must, as many financial institutions trade far too often, thus creating "churn" that eats up any gains via transaction fees....that's how they "bleed" the smaller investors.  

Investing is a "career" and must be looked upon as such.  Just parking money in a fund, and "assuming" the fund management will take good care of it is risky.  Only funds with excellent ratings from Lipper and/or Morningstar should be utilized for the best chance of proper fund management....and even then, a person needs to have their portfolio set up such that they can move the funds themselves.  

Perhaps the best advice is the old saying of "Go Away in May, and Come Back in November".  The best gains always seem to come in the Winter, while most losses occur in the Summer/early Fall.


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## QuickSilver (Nov 26, 2014)

> Investing is a "career" and must be looked upon as such.  Just parking money in a fund, and "assuming" the fund management will take good care of it is risky.  Only funds with excellent ratings from Lipper and/or Morningstar should be utilized for the best chance of proper fund management....and even then, a person needs to have their portfolio set up such that they can move the funds themselves.




I have to admit I know nothing about finances...  so I pay a guy.   He takes care of it, and has for the last 20 years.  yes..  I trust him.  He monitors our holdings and advises us when he feels it's time to move things around.  He keeps us advised of burps in the market. and we meet with him twice a year in person. and get a full detail report.


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## Don M. (Nov 26, 2014)

A good and trustworthy Financial Adviser is a Plus....IF you can find one.  Again, far too many make their money off the churn and transaction fees they generate.  I look at it this way....No one has a more vested interest in my financial well being than I do...so I Assume that responsibility.


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## QuickSilver (Nov 26, 2014)

Don M. said:


> A good and trustworthy Financial Adviser is a Plus....IF you can find one.  Again, far too many make their money off the churn and transaction fees they generate.  I look at it this way....No one has a more vested interest in my financial well being than I do...so I Assume that responsibility.



I like money, but have no interest in studying it on a daily basis.   I survived the last crash by piling up my statements unopened.  Since I trusted my advisor, I continued to invest.. as he talked me through the panic.. I resisted cashing in. Although he did placate me by moving some things to a safer place.    Now I'm sitting pretty good.   However, I may be retired for the next one and will not be in a position to buy.


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## Debby (Nov 26, 2014)

Don M. said:


> We are certainly headed for another bubble....the only question is When, and how long it will last.  The stock market is a continuous "roller coaster", but for the past few years, it is the ONLY venue that allows an opportunity to grow a persons finances.  Money in the bank earns virtually nothing, nor will it until the Fed allows rates to climb....and That can only happen if and when our government begins to look seriously at this nations National Debt, and rewrites our tax codes such that it can begin to reverse this debt.  Gold and Silver are only good as a hedge against Inflation, but again, so long as the Fed suppresses interest rates, inflation is unlikely, and precious metals will go nowhere.  Municipal Bonds are doing nothing, as most cities and states are struggling just to stay even.  That leaves little other than the Stock Market as a means for individuals to maintain, or grow, their worth.
> 
> Knowing that, a person MUST monitor their holdings closely, and spend some time, daily, to check on market and global news.  Watching CNBC, or Bloomberg on TV, or reading the financial news on the Internet, etc., is time well spent, and can give a person a good clue as to market direction.  Self management of an IRA, or portfolio is a Must, as many financial institutions trade far too often, thus creating "churn" that eats up any gains via transaction fees....that's how they "bleed" the smaller investors.
> 
> ...




While I agree with you for the most part, it needs to be understood also, that this is not actually a 'free market' as it's touted to be.  With Goldman Sachs and their sort, using software that allows them to move the market as a result of 1/4 of a cent moves in the price of stocks, the average investor is the equivalent of a David in competition with a thousand Goliaths.  Sometimes David gets lucky and sometimes David gets hosed despite his best efforts.

My husband does all our investing and we used to think of the 'go away in May...' routine, but in recent years even that doesn't seem to hold a lot of water.


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## Don M. (Nov 26, 2014)

That's right...the stock market is rigged in favor of the big boys.  An individual trying to act as a "Day Trader" is fighting an uphill battle.  However, if a person has a "long term" view, and invests in quality companies/mutual funds, AND monitors their portfolio regularly, AND pays close attention to the global financial news, they should be able to level out the wild swings enough to get a decent return.  The "Go Away in May" theory is only about 60% accurate, so the "buy and sell" signals can change substantially from year to year.  Therefore, the Only way an individual stands a chance of improving the odds is to pay Very Close Attention, and be prepared to act accordingly.  It takes some time and effort to make money....and this holds true with investing, just as it does for holding any kind of job.


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## WhatInThe (Nov 26, 2014)

Key work stock MARKET. It's the market that IS being played by computerized and accelerated faster trading. They always say don't associate the company with the stock because the business is frequently different than the stock. The stock does not necessarily reflect the business. Don't fall in love with a stock they say and this is exactly why you have to know the market as much as the company.


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