Loading ...“What, Me Worry?” Markets——-By: Gary Christenson
Mad Magazine introduced Alfred E. Neuman (What, Me Worry?) in the 1950s. He did NOT become a central banker. That is “fake news.”
Global central banks, including the Federal Reserve, created “What, Me Worry?” markets after the 2008 crash. There has been little worry since the November election, until now. But the market worry level may have increased. Changes between highs and lows in two days – until time of this writing:
Date Aug. 8 Aug. 10
DOW 22,179 21,920
Gold 1251.6 1287.2
Consider the 50+ year chart of the Dow Jones Industrial Average.
Black line: Nice move up.
Green Line: Acceleration out of the nasty 2008 crash
Red line: What, me worry? (Too far, too fast!)
In a world where markets are “managed” by “bots” or computer driven buy and sell programs, fundamentals hardly matter. Human analysis is of little importance, and valuations are just numbers. What matters is liquidity – flows of digital currency units into markets.
The central banks entered markets aggressively in 2008. Stock markets also rose because of the Rise of the Machines – High Frequency Trading!
“Print” more dollars, euros, what-have-you, buy stocks and bonds to support the paper markets, and watch them fly to the moon. What, me worry? As long as the central banks print currencies, increase debt, levitate the markets and inspire confidence … the game continues. But what happens when “the music stops?” Russian sanctions and North Korean war tweets may puncture the confidence bubble.