About all that money on the sidelines

Mr Market missed a great opportunity to scare everyone off on Friday, ending the session with light squeeze rather than the devastating rout that the savage Wall Street frenzy so urgently needs. The continued rise in Apple stocks as always remains the key to the global illusion of prosperity and the surreal expectations of portfolio managers, and that is why, as last week’s comment pointed out, Stock No. is not about to come back quietly into the night. He struggled last week, however, to progress to a goal of 187.93 after peaking at a record 170.20 on Wednesday. AAPL then sold hard for about ten hours, then limped to the finish line to end the week in a way that could not have satisfied neither the bulls nor the bears.

The all-important rally target remains viable, but we will need to closely monitor the AAPL’s progress towards that target, as fears of Omicron, the alleged latest Covid variant, threaten to strangle it once again. global consumer economy. By the end of the week, Fauci and his blind lackeys in the media seemed anxious, if not desperate, for someone to die, or at least be hospitalized for a few days, lest an opportunity be missed to deploy another blow. reminder and to stoke public antipathy towards the unvaccinated to new extremes. Sadly, press releases from health officials in South Africa, Omicron’s apparent zero point, have only served to alleviate concerns that the variant could be the devastating killer that so many politicians and bureaucrats have. must hope.

Actions are in the lead

Meanwhile, as Western civilization collapses midway through, the stock market continues to feel as if it is in a sympathetic leveling process. However, it takes a little imagination to concoct a scenario in which the virtually limitless amounts of shelled silver that fueled the bull market for nearly 13 years could dry up. Consider companies with tens of billions of excess cash going out and borrowing more because, apparently, they want to keep their “real” stash for… exactly what? Certainly not to increase capacity, despite what you’ve read about shortages. They know shortages come and go, and that’s why they’re reluctant to commit to, say, $ 10 billion to build a manufacturing plant with a multi-year lead time when the global economy looks set to lock in. new.

A logical way to end the bull market involves putting all that supposedly money aside. Secondary silver is a staple of Wall Street lore, always most plentiful in the intangible form of bullish editorials whenever bull markets appear to stall. Let the overall averages slow down nervously for a few weeks and a few the Wall Street newspaper columnist will invariably produce 1,200 sunny words about how investors sit on piles of untold heaps of money, waiting to roll it out at the first sign of anything. In fact, one sits on a precious little money in the literal or even figurative sense; because every penny of it works all the time, no matter where it’s parked. But like the stock market itself, money is more of a creature of mind and mass psychology than of economic reality. Be aware that when bull markets rise, it is their earnings multiples that ultimately justify the rise. At what level do the justifications stop? Well, there really isn’t a specific level, just varying degrees of optimism that tend to foreshadow the ups and downs of the stock market. At extremes, however, the correlation is always the opposite, and extreme exuberance can literally turn into panic overnight.

What savings?

Likewise, the amount of money available for all practical purposes varies depending on people’s eagerness to borrow it. And they have to borrow, because technically speaking there can be no real savings in an economy that is 70% consumption-based and which, when you go ten years ahead, will be catastrophically unable to meet Social Security obligations. , Medicare or Medicare. even a relatively paltry $ 1.8 trillion in student loans. For now, however, investors, if not workers, are still thinking largely about our economic future. This is mainly because the stock market is trading at record highs and the values ​​of the homes they live in continue to soar.

But let the stock market fall for no apparent reason, and the gas frenzy that allows us to continually increase the supply of money, including secondary money, begins to congeal into something solid and heavy. More sales on Wall Street will quickly make this substance, which represents the sum of our fears and our greed, even heavier. Very early in the transition from vertigo to panic, the desire to borrow money, especially money to support falling stocks, will collapse faster than an erection in an octogenarian. And so the speed of money could crumble, pushing all those so-called dollars back on the sidelines in the shadow of what we’ve so long feared: a debtor settlement day.

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