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The other shoe didn't drop because of quantitative easing on a global scale. See my other post. The central banks have done nothing to trim their balance sheets... they've kept adding assets to their balance sheets during most of the expansion. If we have another downturn the amount of adding they will have to do to artificially suppress interest rates will be rather excessive. I'm curious what the ultimate outcome will be. Earnings are being artificially inflated by debt creation and companies are creating more debt to buy back their stock helping driving up the markets. I know people don't like to hear pessimism but I don't see this bank asset buying to be sound financial strategy long run. When the house of cards collapses, the DOW will fall from 35,000 to 15,000, and I'm prepared for that... or I will be. I LOVE big bubbles like this because it makes the resulting downturn that much more obvious and profitable. This is by far the best since the tech bubble in 1999 when I was just a wee lad. Where's the support level on this chart? haha. In the meantime I'm rooting for nasdaq 10K+.. an obvious meltup that happens quickly.
We have near zero interest rates with central banks globally adding to their balance sheets the last 10 years.. what ammunition do they have left? Turn the page.
Don't forget about the $50+ billion in DAILY repo injections the Fed is doing to prop up the repo market. If the repo market cracks, the house of cards comes crumbling down quickly. I think central banks around the world really think that taking rates far in the negative is actually going to solve all of this mess they have created behind the curtain, when it is the ZIRP policies over the past decade that have backed them into this corner. NIRP policies will only exacerbate the problem further as Europe and Japan are finding out.
Maybe they are orchestrating all of this to have such a grand collapse, CBs can have their global reset, and then usher in a completely digital currency for total control. Think about it - we are supposedly in the "Greatest Economy Ever" - and have had a decade of ZIRP policies, record historical government, consumer, and corporate debt levels, and over the past few months have had 3 rate cuts, record Fed balance sheet expansion, and the repo market has been nationalized due to a run on liquidity. And this is all in the "good times."
Don't forget about the $50+ billion in DAILY repo injections the Fed is doing to prop up the repo market. If the repo market cracks, the house of cards comes crumbling down quickly. I think central banks around the world really think that taking rates far in the negative is actually going to solve all of this mess they have created behind the curtain, when it is the ZIRP policies over the past decade that have backed them into this corner. NIRP policies will only exacerbate the problem further as Europe and Japan are finding out.
Maybe they are orchestrating all of this to have such a grand collapse, CBs can have their global reset, and then usher in a completely digital currency for total control. Think about it - we are supposedly in the "Greatest Economy Ever" - and have had a decade of ZIRP policies, record historical government, consumer, and corporate debt levels, and over the past few months have had 3 rate cuts, record Fed balance sheet expansion, and the repo market has been nationalized due to a run on liquidity. And this is all in the "good times."
It is now the FED's responsibility to make stocks go up or face annihilation for allowing the economy to slip into deflation. Deflation is the enemy, right? We now are living in a zero-interest-rate environment because we are so debt-ladened raising rates will trigger debt default on a huge scale and bankruptcies and recession/depression all over the globe. So we keep interest rates at zero or near zero to avoid this. This has never happened before. We are being held hostage by ZIRP - can't go forward, can't go back. Living in a ZIRP environment will eventually destroy the world's banking system.
When the FED was created in 1913 it was to find a way to AVOID cyclical deflation that robbed (almost) everyone of what they had gain during the BUSINESS CYCLE or GROWTH CYCLE. The FED is doing what they were created to do. Is this wise is another story. Taking on new debt to protect old debt instead of letting bad debt expire through deflation may or may not prove to be wise. Clearly we had a soft landing after 2009. But it is not over. The FED has a huge balance sheet that threatens the world every time they attempt to unwind it.
Deflation is painful but has a silver lining:
(1) destroys debt so the economy can eventually build a newer model at the new Business Cycle
(2) rewards the SAVING CULTURE and not just the SPECULATION CULTURE (gambling)
(3) strengthens the local currency so it can learn to live again.
The idea that saving is BAD and that a strong currency is BAD is the lies of the Global Culture and the Global Economy which wants all people and all societies to be dependent upon the Overlord Government. Deflation didn't kill my parents in 1929-1947. It made them tough and resourceful. Now, we are neither tough nor resourceful. What happened? We got SMART and we got STUPID. Bunch of COWARDS if you ask me.
I keep seeing comments like "this markets insane". The average return in a bull market is ~21% per year. This bull markets been more like 15-16%. By that measure this bull has underperformed.
Also, the market corrected back in December 2018 almost 20% so if you look at history, a move up of ~30% is actually quite normal after such a correction.
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I LOVE big bubbles like this because it makes the resulting downturn that much more obvious and profitable. This is by far the best since the tech bubble in 1999 when I was just a wee lad. Where's the support level on this chart? haha. In the meantime I'm rooting for nasdaq 10K+.. an obvious meltup that happens quickly. 
