Our Annual Post Of The Top 41 Untruths Perpetuated By Wall Street
All of these untruths have proven to be accurate or there are seeds still building in their development. Since we are far from out of this crisis, none of my work or analysis on these issues has changed. It may appear that they have but in fact all the crooks are doing is making many of the unfulfilled untruths that much worse before they manifest themselves.
If nothing else, this is a reminder of the constant media manipulation and self-delusion that belief systems create. As an example, it's pretty hard to remember before the collapse all of the incessant babble on CNBC and on Wall Street about how much global liquidity existed. And how bullish that was for the future. Contrarily, we were writing of coming liquidity shocks and the highest risk of a credit crunch in my lifetime - views that no one else was talking about before the collapse.
The same pinheads now talk of quantitative easing guaranteeing the world will again be awash in liquidity. Remember we have put up at least a dozen posts in the last fifteen months remarking of a dynamic of Wall Street and financial firms batting countless assets back and forth including stocks and commodities and how this would resolve itself. In other words, the same incompetent financial geniuses with the same beliefs of endless liquidity never seem to go away. That's because they keep getting bailed out by the corrupt corporatocracy. Were we to have a working democracy and a merit-based economy, these incompetent and often crooked savants would have been marginalized ages ago.
- We will get a healthy and much needed 10% correction and restart the second phase of a multi-year bull market
- Buy this dip because because earnings were great
- There is too much global liquidity for the markets to go down
- Interest rates must go up to kill the commodity run, inflation and the global equity markets
- China is an economic miracle
- The 21st century is the Asian century
- The U.S. (and I guess by implication all democracies) has lost its economic leadership
- The stock market is cheap
- Risk management.....Well, need I say more
- Continued globalization is a foregone conclusion
- Emerging markets and (Brazil, Russia, India, China) are a safe havens while the U.S. economy and dollar craters
- American manufacturers cannot compete and offshoring or doom is inevitable
- The dollar is doomed because America is a land of spend happy dunces
- Capital equipment spending will rise from the ashes and drive us to a new bull run
- The Federal Reserve will save the economy and by implication the stock market when they cut rates
- Financials are defensive stocks because they pay a dividend
- Defensive stocks are a great investment in any coming market decline
- Inflation is out of control and interest rates must go higher
- This has been the best global growth story ever and it's unstoppable
- The American consumer and the housing market are the major concerns behind a recession. (They are symptoms.)
- Oil is at a permanently high plateau
- Commodities are in a twenty year bull market (Maybe many years of yo-yo action)
- The rest of the world will pull the global economy through US weakness
- Global companies get more than half of their earnings overseas and that makes them a great investment
- There is always a bull market somewhere. (Yeah, and it will likely be in the U.S. dollar comparatively)
- Sentiment is too bearish for the market to sell off
- The U.S. doesn't drive the global economy any more
- Markets must exhibit mania and blow off to have a peak (That's double speak for people who don't know what's going on and they need a sign from God to see a market topping)
- The Federal Reserve is printing money (Total baloney)
- Alan Greenspan caused all of this (Although he didn't help)
- Goldman Sachs is a great investment
- This can't be a top because Goldman is levered to the hilt
- Wall Street is smart money
- It is different this time
- The real estate slow down will be contained
- The US is a service economy and manufacturing doesn't matter anymore
- The consumer loves high gasoline prices (or more eloquently spoken by Wall Street as high oil prices haven't hurt the consumer)
- Unemployment is at 4.5% and by implication the economy is great
- Apple and Google are the next great thing and deserve their stratospheric valuations (As I said before, I'd rather own all of the equities in Thailand than Google for the same sum of money.)
- The Fed equity valuation model tells us the market is very undervalued
- This final one is for emphasis and has actually been discussed above: the dollar will crater if the Fed cuts rates.
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