as part of our
It seems like every day we're seeing the stock market advance
higher, which makes me wonder if traders are just trigger-happy and
trading on the momentum in the market?and, trust me, there's plenty
Whether you are a day, swing, or longer-term trader, there's
easy money to be made. The Federal Reserve has provided you with
this great opportunity, so take it.
The only issues that continue to cast a cloud over the situation
are the state of the country's finances, namely the national debt
and the many municipalities and states experiencing economic
hardship. Recall my previous commentary on the colossal financial
crisis in Detroit. The city is burdened by a massive debt load,
declining revenues, and a rapid decline in population migration
that has spanned across more than three decades. But Detroit is not
an aberration. There are other regions across America that have
fallen into the same financial abyss.
What really puzzles me is that the stock market is acting as if
everything around us is faring well?which is far from the
NYSE Holidays 2013
The U.S. economy is not expanding at a pace that I would deem
acceptable, given the reaction in the stock market. The media harps
on about the fact that the growth of China's gross domestic product
) growth was only 7.5% in the first quarter, but that's pretty darn
good versus America's GDP growth.
The scary part is that the Federal Reserve, in all of its great
wisdom, has been downgrading the country's GDP growth as Chairman
Ben Bernanke and the other Fed members clearly realize that the
economy is in trouble. That's why interest rates continue to be
near zero and why the Fed's bond buying is continuing.
Not too long ago, the Fed estimated GDP growth would be
2.5%-3.0% for 2013, rising to 3.0%-3.8% for 2014.
You must be shaking your head like me. There's little chance
these GDP growth estimates are going to be met. Recall the June
Federal Open Market Committee (FOMC) meeting, when the Fed cut its
GDP growth target to 2.3%-2.6% for this year. My opinion is that
the estimate will again be cut once the Fed accepts that the
economy is stalling.
Just take a look at the first quarter, when the third estimate
showed that GDP growth was a pitiful 1.8% versus the Briefing.com
estimate calling for GDP growth of 2.4%. That's a major miss.
As for second-quarter GDP growth, I think we will be
underwhelmed. All four components that make up the GDP are
stalling. One key component is government spending; and with the
sequestration and the push to cut the deficit, we know GDP growth
will be soft.
So continue to ride the market advance, but keep in mind that
America really is struggling to grow.
This article Why the Easy-Money Markets Will Soon End was
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