Millions of jobs have been lost, some likely permanently. Small businesses are failing . Government debt is ballooning. And yet the U.S. stock market just keeps going up.
Economist David Rosenberg, who’s often more bearish than the general consensus, including now, has an explanation.
“I realize that the stock market no longer thinks it needs the economy if it has the Fed,” Rosenberg wrote in his morning commentary Wednesday.
That is, as long as the Federal Reserve keeps pumping monetary stimulus into the financial system , the financial markets can continue to ignore the awful state of the economy.
And in case you’re not clear on that topic, Rosenberg is happy to remind you.
“Consumer activity is starting to cool off,” he notes, the holiday shopping season is likely to be “weak,” consumers are likely turn decidedly frugal, 68% of unemployment insurance recipients make more on the dole than while they were working, the U.S. now has the biggest debt-to-GDP ratio since World War II, with a much older population, lower-for-longer yields won’t support pensioners, and on and on.
Perhaps more damning, in Rosenberg’s telling, isn’t that the market is disregarding the real […]
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