Stock Market & Dollar

The recent stock market boom is a symptom of excess liquidity caused by government policies. The liquidity is supposed to be injected into the real economy, but instead it is causing asset bubbles. The premise of the stock market rise is a falling dollar. Recently sentiment of the dollar has become so negative that a correction is over due. However, the government has no sign of monetary tightening, so it is fair to expect the dollar to resume its fall […]

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Google Insights for Search calls stock market bottom

Here is a comparison of the amount of searches in google for “economic recession” and “economic recovery” with the stock market (QQQQ is the nasdaq index fund).   A peak in interest about economic recession along with a peak in interest about economic recovery calls for the March bottom in stock prices.  This makes sense in that the crash stops when lots of people is worrying about a recession and more people start to see recovery. You can access the most […]

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Keynesian vs. Austrian Debate on Deficits

Recently there are a lot of debates between the Keynesian and Austrian economists on the skyrocketing government deficit. My opinion is this: In general, government spending is wasteful.  To expect governments to efficiently allocate capital is a larger mistake than to believe in Bernie Madoff. Keynesian policies only makes sense if consistently followed.  The true Keynesian policy maker would save money during good times and spend money during bad times.  The intention of such policy is to smooth out the […]

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Market Analysis & Outlook

Everyone is yelling “the recession is over”.  The stock market has risen close to 50% since its march low.  Lets examine the forces that might influence future markets: Upside:  For individuals and fund managers who missed the recent rally.  There are intense pressure to get back into the market.  With talks of recovery everywhere, the baby boomers who lost 30-50% of their retirement portfolio are really anxious to get back into the market. Cost cutting + increasing productivity + sales […]

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