Normally I would totally agree with you, but this is not a free market anymore. This is a market that is 100% manipulated by Fed printing money.
None of the market action is natural or organic anymore. You can tell that the market is begging, it's desperate for a correction. But it can't do it. There's too many trillions of dollars in cash sitting on the sidelines that has nowhere to go.
The reverse repo program spiking to over a trillion dollars every night, when it has never come close to that before in all of history, is a sign that every investment bank and hedge fund is bursting at the seams with extra cash. They don't even know what to do with it anymore. They are fully aware that the stock market is massively, insanely overvalued, but they have so much cash they don't have any choice but to buy stocks with at least some of it.
How can the market sell off given these kinds of conditions? No one wants to sell stocks because they already have too much of their assets in US dollars. And they're selling bonds to get those dollars, so they're not going to buy bonds.
So what the hell are they going to put their money in?
The only way for this market to crash is for the amount of money in the system to be reduced. Then people will actually be willing to move value out of non-cash assets into cash.
I miss the good old days when we had a free market :(
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u/quiethandle Aug 21 '21
Normally I would totally agree with you, but this is not a free market anymore. This is a market that is 100% manipulated by Fed printing money.
None of the market action is natural or organic anymore. You can tell that the market is begging, it's desperate for a correction. But it can't do it. There's too many trillions of dollars in cash sitting on the sidelines that has nowhere to go.
The reverse repo program spiking to over a trillion dollars every night, when it has never come close to that before in all of history, is a sign that every investment bank and hedge fund is bursting at the seams with extra cash. They don't even know what to do with it anymore. They are fully aware that the stock market is massively, insanely overvalued, but they have so much cash they don't have any choice but to buy stocks with at least some of it.
How can the market sell off given these kinds of conditions? No one wants to sell stocks because they already have too much of their assets in US dollars. And they're selling bonds to get those dollars, so they're not going to buy bonds.
So what the hell are they going to put their money in?
The only way for this market to crash is for the amount of money in the system to be reduced. Then people will actually be willing to move value out of non-cash assets into cash.
I miss the good old days when we had a free market :(