posted by jason at 9:40 PM
Jason about our discussion in yesterdays comments. I am not sure i can see any reasoning in the statement you made. In 2008 wasn't the government printing money when the market fell way over 20-30 percent. And I thought the fed said recently that they would stop QE3 by the end of the year. I would think that from these perspectives the markets have a great chance at exceeding the last drop in 08. Correct me if I am wrong?
monkeypicks, actually QE1 was announced on November 25, 2008 and the market did drop just over 20% from there. However, QE1 was expanded on March 18, 2009 which was just after the market bottom. Bernanke learned that the amount they announced on November 25, 2008 to purchase wasn't nearly enough to turn around the market and that's why the market continued going down. Only upon expansion of QE1 on March 18, 2009 was the market comfortable that sufficient money printing would be there to raise asset prices. The same thing is going on in the Nikkei in Japan right now. If you devalue your currency the market goes up when denominated in your currency. If you measured the market in a stronger currency such as gold you will see the market has gone nowhere and is sharply down since 2000 let alone 2008. So, it is very unlikely that we can break the 666 lows unless the Fed decided to strengthen the Dollar which isn't going to happen anytime soon. Until the Fed actually stops QE, I wouldn't believe a word of it. They may be trying to jawbone the market a bit but so far QE is still going on so no reason to think that it will end. It has been going on for more than 4 years with no end in sight...
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