Tuesday, August 25, 2015

Dead Cat Bounce Tuesday?

Dead Cat Bounce Tuesday?

by Stephen Lendman

Whether market panic in recent days signals the six-year bull market’s end remains to be seen. Bull and bear markets take time to unfold. They don’t happen overnight.

Yet days of global panic with valuations way exceeding fundamentals suggest at minimum a major correction, selloff, down cycle, give it any name you wish is long overdue to rectify significant imbalances and may have begun.

Sharp reversal days punctuate all bull and bear markets - profit-taking or buying dips to cash in short term. They can be stunning.

The 2008-09 market crisis saw six of the 10 largest ever Dow point advances: 

2008-10-13: +936.42

2008-10-28: +889.35

2008-11-13: +552.59

2009-03-23: +497.48

2008-11-21: +494.13

2008-09-30: +485.21

Tout TV talking heads treat viewers like what Goldman Sachs con artists call “muppets” - easy marks to swindle no matter how many times they swallowed bad advice before and paid dearly.

CEO Lloyd Blankfein calls it “doing God’s work.” The Supreme Court ruled he and other Wall Street crooks are immune from clients pursuing security fraud charges. Washington alone can sue.

Wall Street’s culture encourages fraud - rewarding it handsomely. The price for getting caught pales compared to great fortunes made. 

Wall Street is ground zero for casino capitalism. Its business model prioritizes fraud and grand theft. Tout TV talking heads notoriously feed gullible viewers bad information. They suppress how a dirty system works.

They ignore massive wealth transfers from ordinary people to super-rich elites already with too much. They call market bubbles normal good times.

European stocks closed sharply higher after days of turmoil. The European Stoxx 600 rose 4.3%, reversing most Monday losses.

As this is written about midday Tuesday Eastern time, the Dow is up over 2%, the S&P almost 2.5%, Nasdaq stocks 3.4%. Given extreme volatility, anything is possible before the closing bell.

One thing is certain. All markets revert to their mean valuations. Current ones are way overextended - a house of cards waiting to collapse, according to Paul Craig Roberts.

Reality eventually overtakes euphoria. Money printing madness works only for so long. Former Reagan administration budget director David Stockman sees “a train wreck coming.”

“(S)tay out of harm’s way,” he warns. “We are headed into a perfect storm of policy failures.” More than money printing madness “causing a massive bubble” signals big trouble. “(W)e are also seeing an absolute failure of American world dominance.”

Stockman sees “a major collapse” coming. When the Fed increases its balance sheet from $900 billion to $4.5 trillion in less than six years, and the pattern repeats worldwide, a slow-motion “train wreck” approaches.

“(I)t’s not very far down the road, and I can promise you that is when all hell is going to break loose,” Stockman warns. Perhaps it already began.

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net. 

His new book as editor and contributor is titled "Flashpoint in Ukraine: US Drive for Hegemony Risks WW III."

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com. 

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