The Phantom Bear Market

Everyday we all read articles pointing to statistical anomalies that look like dark ominous storm clouds overhanging the economy and the stock market. It is commonly acknowledged that GDP, employment numbers and all government statistics can be whatever they need to be on a given day. Accounting laws are not being enforced, so earnings reports are assumed to be quite flexible. The statistics we are likely to see are the ones needed to shape public opinion. Every news story has an agenda which is normally to shape public opinion.

There are no signs of honesty anywhere. Honesty is goodwill. Don’t expect to see honesty because good will is a byproduct of the free market system. We do not have a free market system. In a free market system price is what allocates resources. In our system, resources are allocated according to political power.

Plainly stating these things should surprise no one. Regardless, all efforts to explain the economy and the financial markets are based on dogma relevant only to free market activities. So, based on all we know and all we see, its time for the bull market to end. Since the old dogma is all academics and analysts are comfortable with, that is what is used. There is great stress in admitting all that we have learned simply doesn’t matter. I am offering a simple explanation. Simple explanations are all there ever is. Complex explanations evolve because true simple explanations range from unpleasant to terrifying. Here is is in black and white why the economy looks good and why a bear market never occurs. I am not saying folks don’t know these things. There is a difference between knowing what is true and acting on the basis of what is true.

Remember, if fantasy free economics no one gets any respect. The President on the United States, Chair of the Federal Reserve, truck drivers, and farmers get no respect. All are observed in keeping with their personal incentive of self interest. Respect is for personal relationships. For studying human behavior, respect only clouds the issue. There is no disrespect. It is all respect neutral. In large aggregations of people, the truth is just another tool in a politicians arsenal. Every tool is used as needed for the effect it generates. The truth is rarely taken out of the tool box. Citizens feel special but they have no information. Normally citizens have tidbits of superficial information and use that to argue liberal vs. conservative in echo chambers. Real issues go unknown and unchallenged. Congress hordes information. The media reports what is deemed good for the public to have.

When 4% GDP growth is announced, only a few of us even question how the number was arrived at.

The truth about the economy is that any GDP number now in the future is completely dependent on the level of the stock market. No more good GDP numbers will be reported unless stock prices continue to move higher.

Going back to as early as 2005 a government sanctioned asset enhancement initiative was clearly ongoing. Past 2008 rising asset prices have been the engine driving economic growth. Clearly the most efficient way to make the most money in the shortest period of time is to be a corporate insider and have government focused of moving your company’s stock into the stratosphere.

The rich get richer and the smart people look smarter. The economy has grown. The income distribution, as would be expected has become highly skewed to the top. It is only possible to report great GDP numbers based wealth being created at the highest rungs of the food chain ladder.

So where is the bear market? Virtually all of the worlds resources are focused on keeping stocks moving higher. That is the sole reason for any economic recovery. A bear market would completely destroy the top rung of the food chain ladder and the fallout would land on everyone at the bottom.

So for folks looking for a bear market to start based on traditional criteria, don’t. Every tool from starting wars to central banks purposefully buying stocks to bolster them will be used to fend off a bear market. As the market tries to sell off, look for more and more organized support. Look at sharply down days as days to draw in short sellers to be squeezed.

It is easy to underestimate the magnitude of manipulation efforts. Don’t fall into the trap of thinking what cannot be seen is not there. Don’t fall into the trap of thinking that if something hasn’t been proved, it isn’t true. Decisions are made in the present moment. Knowing what has happened up to this point is important. What happens next is based on incentives in play at the present moment. There are no facts. What has caused the economic recovery? It has been a rising stock market. The bull market was created for that purpose. There is a huge incentive to keep it moving higher and by all means to never let it fall. The end of the bull market in stocks is the end of economic prosperity.

This doesn’t mean there won’t be a bear market. It does mean it won’t occur just because there is more supply than demand. There is actually a greater chance or whole system will unravel government, financial markets, freedom and everything else. Economics by force always destroys.
The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.

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Fantasy Free Economics recommends the following blogs.

Of Two Minds Liberty Blitzkrieg Mises Institute Straight Line Logic Paul Craig Roberts

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