Loading ...The Magical Mystical Stock Market Levitating POMOs
OK…Highroller emailed me this image and asked me to post it…it wouldnt upload for him.
Here it is POMO (P for “Permanent” )
and here is Highrollers Comment..( and FWIW tonite…i tend to completely agree)
This means that the fed milks money into the banks to buy the top weighted stocks in the indices to keep the party going. No wonder the vix is so low, nobody else investing as much and not worried as they know the fed has their back. Don’t matter what the dollar or yen does, just noise. Gold will never win this battle and I guess it will have to be some outside force to make it rise greatly. Hard to sit on the portfolio and watch the slow decay, I am sure I am not alone. This thing will have to go into parabola to end, best plan forward is to jump into any other asset and not have the head buried in gold charts as we miss the moves elsewhere. Wake me up when gold 1400 and then play I guess. Gold fever can kill us. I respect Spock with his knowledge and help greatly but very hard to jump in on trades. If gold does spike way lower, going take some big balls to buy more this time.
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Added…Ok I never heard of this $XII index…but Holey Molars…look at this !
https://www.msci.com/www/research-paper/the-institutional-index-as-an/014940810
REPEAT AFTER ME : “DONT FIGHT THE FED”
Not sure I get the point here.
We all know about the various rounds of QE launched since 09.
(And most of us were tracking TOMOs and POMOs for years before that even.)
And that’s just by the Fed. Globally, its 20Tr and rising, with Europe and BOJ still on buying sprees.
But investing is forward looking, and the Fed will start unwinding next month.
Shouldn’t that be the issue at hand?
And to amplify on that, from a different angle ..
Charlie Bilello? @charliebilello Sep 20
The Fed…
0% rates = bullish
QE 1, 2, 3 = bullish
Taper = bullish
No QE = bullish
Rate Hikes = bullish
Balance Sheet reduction = bullish?
I guess the point is…start watching the POMOs again…if everybody already knew this mechanism…how come there have been so many bears calling tops since 2009 ?
Are there POMOs part of the QE thing or are they independent of that program ?
There are a number of differences between OMOs and QE …. most of them pertain to POMOs vs QE as well … good discussion here, and in the comments
https://www.quora.com/What-is-the-difference-between-quantitative-easing-vs-open-market-operations-by-the-Federal-Reserve-System
As for watching POMOs directly … as always .. what matters is the market’s reaction to what they do.
“Don’t matter what the dollar or yen does, just noise. Gold will never win this battle and I guess it will have to be some outside force to make it rise greatly.”
There is no winning it is wealth preservation. Wealth preservation won’t be found in the SM if this all catastrophically unwinds. I Buy/Sell PM stocks or any other stock to accumulate wealth then try to find a way to preserve it IMO. There are significant forces in the world all lining up to rewrite the Bretton Woods agreement that the US so gracefully inserted the USD in lieu of Gold this was the start of the Cold War. The Russians never signed that agreement and the rest of the countries that did have resented it since. The Euro was created to compete with the USD and almost did. Now the Yaun looks like it’s set to give it a go. Amazing history 75 years in the making which way it will go I don’t know but I’m sure not looking for a flash crash in the SM just to watch my PM go up. And I’m not looking for it to end in WW3 either.
Funny thing is I never liked History or Social Studies at school now I’m trying to make money it”s fascinating.
agree red label, my amigo holds strictly rental properties and things just maintain until yrs later if need be to sell or just intake rental income. We converse greatly on the differences and came to the conclusion that at the almost retirement age now that there is no need to worry and chase the dream of making millions and just to live life and have extra income that maintains the lifestyle without eating the nestegg. Thus, how much do I need to make in trades every month to cover living costs is much easier than trying and fretting to make the moonshot which may never come. Plus , if there is a nest egg, treat oneself and spend it. Had more fun when I was in my 20’s with 500 bucks than now with a million, chicken to spend and leave it to the kids to spend? Worst and best case is to downsize,or move to cheaper country to carry the money further. Many can retire by 50 but cannot grasp the fact on how to . Also must add that the education learnt here with Fully,Spock, Rambus and posters is priceless compared to some university degree full of propaganda. How can the teachers teach if they got no skin ion the game? Loose a few bucks but learn a lot. Fed unwinding in other areas and the politicians will keep the market going because they have their cash in it. How else do they all become rich? Manarino finally changed his tune and realized whats up as he was calling a top for ever and now he understands and says -can’t fight the fed. Perhaps the club should sideline some etf like agriculture, concrete etc. and dig thru the stocks they hold and find some gems for the time being. All the eggs in one basket never good. Spock has his optional service/site which spreads the gravy around and should be considered seriously as an investment choice as the last few years have been very hard on the average investor here, not to say his matrix is wrong but not for the faint of heart. Don’t forget to live life and turn off the machine for a while!
Thank you Highroller/Fully. Very insightful with the symptoms of POMO reflected in the SM.
PPL need to ask themselves, as long as US unemployment records have been kept, HOW LONG does the (full employment) trough last? Can it be managed to stay low the next 10 years with POMO?
The business cycle is not dead, it’s just overdue.
https://www.goldmoney.com/research/goldmoney-insights/the-forthcoming-global-crisis#.WcPbX-R4_XI.twitter
Please read that.
thnx, best written explanation I’ve read! Interest rates the clincher,how much more inflation is needed before they rise. Gov’t tells us 1% inflation but we all know that is a lie as the stores and charts here show otherwise. Along with a rate rise + higher gov’t debt repayments=more taxes. Tax us some more to keep the party going will happen and therefore I expect gold sideways for some years yet as all these events are small steps at a time. When gold does go up, will the world be a nicer place? Enjoy today! One thing I am doing is printing out and saving charts,writings, and so on and plan on putting it all together in an explained folder alongside my Will and perhaps someone in the next generation will benefit from all that I have learned here.Heck, I don’t plan on dying rich! When you hear ‘he died a poor man’ can mean he spent it all and lived fine! Overdue business cycle for sure but this time it’s different.
Thank you for posting this article Cervantes – it’s a keeper. Yes, masked is a better description than overdue.
Question: Why you asume central banks are omnipotent and can print for ever? Market flows are much bigger than the power of the central banks. If the big unwind happens, it will be like stop a tsunami with an umbrella.
they can print forever as all the countries are in the same boat, Japan gov’t is said to own 75% of the etfs’ in their exchange and with the QE party into oblivion by Abe just shows the madness. Capital flows will make it rise even more here but will it flow to gold? Even Armstrong bewildered as big bang2015 did not shake out and he keeps putting off the gold report. Pension system go broke? Lotsa room for higher taxes, gov’t don’t care if ya loose your car and have to bike to work, just pay up. Wanna preserve capital then get some rental property as rental income is always relative to the times and more substantial than a paper stock held in the system by a banker who can lock the doors anytime. Bond bubble with no more buyers of debt I understand but the gov’ts are sneaky with funds as what happened with Belgium a few years back.