--Watts (Some Kind of Wonderful)
Confidence seems to be growing that there's no way the present administration will take its foot off the stimulus pedal in an election year. It follows, therefore, that the path of least resistance for stocks should continue to be up.
People have short memories.
Similar bravado was voiced in early 2008, the last year of the previous administration. They'll pull out all stops to keep things going thru the election, it was asserted.
The Bush administration gave it the Harvard try, of course. As in the fairy tale, though, all the king's horses couldn't keep things from coming apart.
Sure, politicians can and will try to move heaven and earth in order to stay in power. It often works for a while, of course. That's why politicians of all colors head to the stimulus casino.
The Obama administration is betting big that it can keep markets propped up thru November. Perhaps accompanying that bet is a prayer that the dice roll doesn't come up snake eyes like it did for the previous administration.
position in SPX
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1 comment:
If you look back at quantitative easing two, so-called, in November 2010, the concerns at the time were that it would be highly inflationary, it would hurt the dollar, that it would not have much effect on growth.
I think the record is positive. Looking back, I think that those actions played a constructive role.
~Ben Bernanke
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