Caution on Market frenzy! The world economy recovery is SLOWING DOWN, not picking up !

[Erin Bale + 3]

Check out the data of each country's GDP, Q4 gdp had all being in decline, apart from China, but after lately virus ravaging, its Q1 Q2 recovery will be slowing down as most of the Asian market.

So my question remain, why is all this confidence bet from Wall Street on Rapid recovery which is not only illogical, its fundamentally against the reality ?

Obviously most of the irresponsible monetary policy made by FED and governments across the globe isn't helping the situation,

but do seems as if Wall Street is set everyone up for another massive Crash ? Almost as if its a junkies last high ?

[El Nikko + 2,145]

I think the real confidence going back a year or more was was in the Fed's desire to start up another gigantic QE (stimulus) program, all that cheap borrowed money has to go somewhere and the Fed did say that they would do "what ever it takes" back in Sept 2019 when the REPO market was in trouble. I think that was probably a very big event but was overshadowed by Covid.

If the US stock market doesn't have a huge correction or crash in the next year I will be very surprised. The latest announcement of a further 1.9 trillion QE doesn't seem to have had the same effect as the previous rounds did so maybe people are starting to get nervous...I certainly am as half of my pension is in US stocks/assets.

If there is a correction though, I think there's a fair chance that money will pour out of stocks and in to hard assets and commodities which could include oil as that is still very cheap providing the Saudis don't do anything stupid again like ramp up sales.

Edited February 8, 2021 by El Nikko

[frankfurter + 562]

20 hours ago, Erin Bale said:

Check out the data of each country's GDP, Q4 gdp had all being in decline, apart from China, but after lately virus ravaging, its Q1 Q2 recovery will be slowing down as most of the Asian market.

So my question remain, why is all this confidence bet from Wall Street on Rapid recovery which is not only illogical, its fundamentally against the reality ?

Obviously most of the irresponsible monetary policy made by FED and governments across the globe isn't helping the situation,

but do seems as if Wall Street is set everyone up for another massive Crash ? Almost as if its a junkies last high ?

"lately virus ravaging". uh, you live in China and can speak from direct experience?  " its Q1 Q2 recovery will be slowing down". by "it", I presume you mean China?  Are you a recognised economist to speak with such authority? May we see the data you used to reach such a conclusion?

As for America, not much hope, if the current structures continue.  You will note ALL the money printed during covid, some $10 trillion, went to "aid": which is to say it went to the top 1% to protect their wealth vis a vis stock prices. None of the $10tn went to create industrial jobs. It did not and will not, because the USA is no longer an industrial economy: she is a financial economy. A financial economy has no need for labour: people are irrelevant. Worse, the USA financialised economy is based upon debt.

 

[El Nikko + 2,145]

I heard but haven't checked (might be wrong) that it's just the top 6 or 7 companies that have accounted for most of the rise of the S&P500 and if they were taken out then it would be flat at best since Feb 2020.