So, what's the stock market gonna do?!
Jan 8, 2021 23:34:45 GMT
sawmilljim, themotherhen, and 2 more like this
Post by Ozarks Tom on Jan 8, 2021 23:34:45 GMT
The whole system is so convoluted it's more than a little difficult to explain, and I'm not certain I understand the underpinnings of the markets as related to the Fed.
I do know the big players, be they investment houses, banks, high rolling individuals, are borrowing money at little to no interest rate. In other words, pretty much everything they do is leveraged to the hilt. Their relationship reminds me of the crooked car wholesalers I knew in Dallas many years ago. One guy would buy an old car at auction and take it to another dealer. They both had "floor plans" (credit lines for their purchases at banks) and would do the following: Dealer 1 - I gave $1000 for this car, if you'll buy it from me for $1200, tomorrow I'll buy it back from you for $1400. Dealer 2 - Okay, retail on that old beater is about $2100, so we'll keep pushing it back and forth until it hits that, then sell it at retail. In other words, they were making their profits off the banks without the banks knowing it. The problem was, if they couldn't sell it retail, and their lot started filling up with full boat priced cars, the banks would call their notes, and in some instance they went to jail for bank fraud.
I've got a sneaking suspicion the big investors are doing the same thing, buying one another's stock today, and that investor buying them back the next day at a higher price. That would account for the ever increasing DOW average. All done quietly with not even a verbal agreement probably, they all know how the game is played. Of course, it's the Fed that's their bank, and it's the Fed who's going to eat the default which mathematically has to happen. In the meantime, all the CEOs and CFOs of those investment companies are raking in bonuses and stashing them offshore. It's the corporations that will take the heat, just like the '08 meltdown. The crooks will walk away flush.
We had some money in San Diego municipal bonds for some unknown reason, we'd told the agent NO CALIFORNIA!! Anyway, he called and said San Diego was buying all their bonds back ASAP and we needed to put those bucks elsewhere. It seems San Diego got caught fudging their books to look like they has the projected tax base to cover their bond obligations. Federal regulators made them empty their banks accounts to pay off their bond holders, then issue new bonds under a different rating at a higher interest rate. Sort of why we told the agent originally no California municipals, everything out there is broke.
The stock and bond markets are no more than mirages of assets and income to back their prices. They're being manipulated to personal benefit, and those doing the manipulating will be laughing all the way to their islands.
I do know the big players, be they investment houses, banks, high rolling individuals, are borrowing money at little to no interest rate. In other words, pretty much everything they do is leveraged to the hilt. Their relationship reminds me of the crooked car wholesalers I knew in Dallas many years ago. One guy would buy an old car at auction and take it to another dealer. They both had "floor plans" (credit lines for their purchases at banks) and would do the following: Dealer 1 - I gave $1000 for this car, if you'll buy it from me for $1200, tomorrow I'll buy it back from you for $1400. Dealer 2 - Okay, retail on that old beater is about $2100, so we'll keep pushing it back and forth until it hits that, then sell it at retail. In other words, they were making their profits off the banks without the banks knowing it. The problem was, if they couldn't sell it retail, and their lot started filling up with full boat priced cars, the banks would call their notes, and in some instance they went to jail for bank fraud.
I've got a sneaking suspicion the big investors are doing the same thing, buying one another's stock today, and that investor buying them back the next day at a higher price. That would account for the ever increasing DOW average. All done quietly with not even a verbal agreement probably, they all know how the game is played. Of course, it's the Fed that's their bank, and it's the Fed who's going to eat the default which mathematically has to happen. In the meantime, all the CEOs and CFOs of those investment companies are raking in bonuses and stashing them offshore. It's the corporations that will take the heat, just like the '08 meltdown. The crooks will walk away flush.
We had some money in San Diego municipal bonds for some unknown reason, we'd told the agent NO CALIFORNIA!! Anyway, he called and said San Diego was buying all their bonds back ASAP and we needed to put those bucks elsewhere. It seems San Diego got caught fudging their books to look like they has the projected tax base to cover their bond obligations. Federal regulators made them empty their banks accounts to pay off their bond holders, then issue new bonds under a different rating at a higher interest rate. Sort of why we told the agent originally no California municipals, everything out there is broke.
The stock and bond markets are no more than mirages of assets and income to back their prices. They're being manipulated to personal benefit, and those doing the manipulating will be laughing all the way to their islands.