Casino's doing great! (Don't fight the FED)

Here's a look at what $2.2 trillion freshly printed greenbacks and a $20-trillion interest-free credit line can do in the "right" hands. It'll trickle down to the peasants eventually, I'm sure. Please remember not to ask questions when stocks are going up children. What's good for stocks is good for the banks and what's good for the banks is good for everyone. Quit your bitching about banks paying zero percent while you pay 10% -29% and realize this is "for the good of the country" (well, the top 10% anyway).

Citigroup "surprises" with profit on gambling trading

JP Morgan "surprises" with record fixed-income gambling trading revenue

Bank of America posts profit on record Merrill Lynch gambling trading revenue

Goldman Sachs earns 3.46 billion on record gambling trading

You might be unfamiliar with the Wall St. trading axiom "Don't fight the Fed". It means don't short the market when the FED is conducting open market operations. Ignore it at your peril. It's not there because of the FED's wisdom and foresight, perfectly adjusting policies and getting it "right" so markets respond "positively" i.e. GO UP. It's there because in times of market duress, the Federal Reserve Bank ("Fed" for short) will physically PRINT MONEY (called "quantitative easing" so it doesn't erode "confidence") and use it to buy anything they want (shitty mortgage backed securities and treasuries this time around) to arrest falling markets. More importantly for stocks, they open the discount window to the largest market players (see above) which at 0% interest rates is essentially a free line of credit, for them to do with as they will. The FED tells the public it's for "lending..to spur job growth". Really? Seems like they mostly trade with it to me, paying themselves absurd amounts of money, with a little set aside to screw the common folk with predatory lending rates. But I'm biased. There is one teensy little string attached to this...You have to BUY!BUY!BUY! stocks if you wanna "play ball". Once the largest players have an unlimited bankroll (the fix is in), the bears get the hell out of dodge,and fast, to avoid being mauled by the newly enabled bulls (a picture's worth a thousand words!)
Fundamentals? fugettaboutit. Reality? fugettaboutit. Just changed the accounting rules to hide losses? doesn't matter. It is on like Donkey Kong! Pity anyone who attempts to short in this environment. The Fed is dispensing "confidence", and you can't have that if markets keep falling. The bears must be taught that there's no money to be made selling short, and short positions are quickly vaporized. It's like playing Texas Hold-em where you're opponent goes all in, every time, and even if he loses another mountain of chips just "appears" before him. You'd have to leave the rigged table in disgust, bet against him and lose everything eventually, or in the case of markets start betting with him, even if you think his hand sucks. He's got unlimited chips, after all. Presto! We now have a bull stock market that "surprisingly" exists in it's own little printed world where unemployment, taxes, massive deficits, commodity prices, inflation, deflation, or anything else no longer matters. Reality has been put in suspended animation, to be dealt with sometime down the road. The thinking goes that eventually, the real economy will catch up with our artificially created market. The "wealth effect" where printed money = rising markets = rising bank accounts = rising confidence = growing business = hiring = jobs = more earnings = rising markets in a positive feed-back loop. Unfortunately the loop the last 20 years now is free/ printed money = massive price distortion (tech stocks, home prices) = rapidly rising markets = record bank trading profits = record bank bonuses = more reckless/leveraged trading = more obscene bank profits = even more leverage = bubble implosion=bailout = more free/printed money. The Main Street parts of "hiring" and "jobs" are no longer "in the loop" as the endless greed of Wall Street consumes the capital. Don't fret though..Main Street does get one thing out of this...they are stuck with the tab! The inflationary results of increasing money supply. All this printed money comes from America's future in the form of astronomical debt levels and devalued currency, for the benefit of the top 10% of individuals who actually even own stocks. You can earn the same but it buys less. Look at what your dollar is worth compared to 25 years ago (HT Jesse at Cafe Americain). Even a novice can see it's...half of what it was. Meaning you need to be earning twice as much now as in 1985 to have the same standard of living.

Food and Energy prices (dutifully stripped out of the Consumer Price Index...they're volatile!), gold, commodities in general. Everything under the sun becomes more expensive, and hurts the bottom of the economic ladder all the more. 50k a year used to be a nice job. Now you can barely support a family of four on that...assuming of course no savings, no vacations, no college for the kids, and you hold off retirement until death.

I suppose I'd view it more favorably if I was the one on top of the ladder...