SP 500 And NDX Futures Daily Charts - Bubble On Through M&A's And IPO's

By Jesse of Jesse's Cafe Americain
Tuesday, September 2, 2014 4:57 PM EDT

Stocks had a bit of a roller coaster ride today, with techs trying to take the lead on the upside.

The markets are sloughing off quite a bit of exogenous risk. But that ought not to surprise us, because that is almost the very definition of a bubble in assets. The fundamentals and realities are ignored, as pieces of paper become increasingly traded on their own without regard to risks.

September is going to be marked by the biggest IPO ever. The much awaited Alibaba will be rolling out between now and about September 20. The wiseguys are also going to taking a lot of M&A activity out of the trunks and planting them in the killing fields of a toppy market. Why not? Whether you are paying with cash or stock, your currency is debased.

So barring any untoward events I would expect the markets to muddle through to the latter part of September, and then get set up for some sort of correction into October.  It will probably not be severe, again unless it is driven by some geopolitical events, because of the midyear elections coming up.  Unless of course the financiers decide to engage in some mild form of coup d'état.

I put out an excerpt from a new Harvard Business Review article earlier today that is worth reading here. 

Although greed is always a factor in any human activity in our fallen world, there are times when it reaches a peak of activity and predominates, becomes a focus along with power. And then the world is turned upside down as it were. We are in such a time, I firmly believe.

Have a pleasant evening.

 

 

 

 

Disclosure: None.

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Moon Kil Woong • 9 years ago • Contributor's comment
It is not easy to crash the easy money, dead economy flow, mainly because it rips apart conventional economics, second of all the flow directed to the connected doesn't reach the masses which write in suffering. This shutters inflation and allows the flow to continue. The issue is that this enriching liquidity goes to the wrong people and doesn't come from creation of goods or services but straight debt (US government) or a trick by the Federal Reserve who is allowed to convert assets to liquidity for whoever they wish to enrich. So what causes an end to this? When greed exceeds the ability to create even more. When the public realizes what's going on and stops it. Or when the market's can't finance the burgeoning debt and the central bank becomes so leveraged further liquidity strains their credibility. So what will cause the collapse of this wreched system? The 3rd of course. Already the Federal Reserve is leveraged like a out of control brokerage house and the attraction for US debt is only around due to crisis around the world. Even so, the Federal Reserve still must step in to consume the excess US debt issue and keep rates low. We already see cracks in this system and the Federal Reserve is signaling they can't finance a new round of QE as is. Although they might if we get a collapse, even though it is very unwise. A country where the only liquidity rests in banks and they increasingly own everything is stepping ever so close to communism, especially when the money is not made by providing goods and services and owning capital is irrelevant since money is made, not earned. The next downturn is in essence will be the result of our continuation down out of capitalism into socialist hell. Even tech can't save us from that.