yotta's chaotic, disordered, confused thursday, page-27

I don't often comment on the macro-economic matters, but I try to keep them in the back of my mind.

The most recent bull run from August 2010 was fuelled by liquidity (the Fed's QE).

So - what's happening around the world?


1. ECB is buying bonds - injecting liquidity into their system.
2. U.S. Fed announces zero interest rates into 2013 - and hints at the possibility of QE3. Wait for Jackson Hole Symposium in late August.
3. Hints about QE coming out of Britain.
4. Japan has begun their own QE in response to their economic crisis.
5. Oil prices have dropped dramatically now down into the low 80s after the doom and gloomers were predicting 120 or higher.
6. China's inflation has dropped - suggesting they can ease off monetary tightening.
7. Government bond yields are a fraction of the dividends paid by stocks.

This is not 2008. What's different now? Central banks are more inclined to act to maintain liquidity in financial systems than they were back in 2008 - and now there seems to be a propensity for international coordinated action.

All of that sets up a background for advances in stocks. A trigger might be needed - Jackson Hole again? Waiting for Jackson Hole might be like waiting for the lifting of the debt ceiling. Probably something else will provide the trigger - if one is coming.

Good luck
Redb