patrick.net

stocks are rising because dollar is falling compared to other currencies. Its all the effect of inflation.

" I wonder why they do not fall " - Actually they have fallen many times. A couple things to consider, many investors are looking ahead which means some of bad news has already been priced in. There will be another fall any time but it probably wont be for the reasons you mentioned. As you say NODs and bankruptcies are on the rise but those are narrow pieces of the market being bailed out. Just six months ago I was wondering if stocks would ever go up .

So, you think my explanation 2. is correct, but it's still crazy. Consider this today's report:

Consumer credit fell by $12B in August instead of the forecast of $10B.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aO13jMuWf0M4)

Yet, MasterCard rose today by 5.13%, VISA by 3.81%.

And again number of private bankruptcies rise daily.

This is insane.

Because Fed & regulators gave all banks a free pass. Relaxed accounting rules so we can all pretend they are solvent.

In return the banks have slowed foreclosures and in some markets stopped them like Wells Fargo Atlanta recently. Of course they just suspend the process, so your DEBTS and FEES keep climbing.

I predict the head in the sand will be it for about a decade. So we have a stock market that mirrors all this fantasy and does whatever it wants. Stay out, the casino is more thoroughly rigged than it's ever been. You may run out in front of the steamroller and pick up a few nickels here and there, but the driver gets paid whether you get squished or not, so it's better not to take that risk.

Vicente says

Because Fed & regulators gave all banks a free pass. Relaxed accounting rules so we can all pretend they are solvent.

In return the banks have slowed foreclosures and in some markets stopped them like Wells Fargo Atlanta recently. Of course they just suspend the process, so your DEBTS and FEES keep climbing.

This fits with my explanation #1. However, in California there is a huge number of NODs, which means (I guess) the delayed foreclosures are on the way out. They are also in very expensive areas. Still nobody notices.

I predict the head in the sand will be it for about a decade. So we have a stock market that mirrors all this fantasy and does whatever it wants. Stay out, the casino is more thoroughly rigged than it’s ever been. You may run out in front of the steamroller and pick up a few nickels here and there, but the driver gets paid whether you get squished or not, so it’s better not to take that risk.

I still can't believe it gonna take a decade nor even more than a couple of years.

I also can't understand how US stock markets may benefit from dollar crash, since they are mostly based on US consumers.

It's still a riddle to me.

what other inflation hedges do you have ? I can't think of better inflation hedge for long term other than stocks of real good companies which produce something tangible.