Hans and Franz would be proud as the bubble blows ever bigger. For the week, stocks gained another 1%.
Monday, in Asia, Europe, and the U.S. stocks remained unchanged. Volume in the U.S. was light, but the VXO dropped over 5% to the unsustainable level of 11.57. Bank of America settled their legal dispute with bond insurer MBIA, accounting for the hoopla in the banking sector. Here’s a nice summary from Dr. Ron Paul on the current state of financial fantasy in this country.
Tuesday the Nikkei 225 Index caught fire, rising 3.6% and blasting through the 14,000 level. This move propelled the Asia index up 0.8%. This week, it’s Australia’s turn to throw a little lighter fluid on this stock market fire. The central bank of Australia cut its key overnight lending rate called its cash rate 0.25% to 2.75%. As the lust for stocks continues, so does the aversion for things related to precious metals. After filling the gap from the crash made less than a month ago, they seem destined to move downward to test those former lows. In Europe, stocks rose just moderately. In the U.S. it was party time again as the Dow Jones Industrial Average closed well above 15,000 the S&P 500 Index set another record and stocks closed up 0.6% on low volume.
Wednesday, stocks in Asia, Europe, and the U.S. continued ever higher, rising 0.9%, 0.7% and 0.5% respectively. While charts show stock indices trending ever higher, they mask what investors feel about this rigged market as CNBC is deservedly feeling the pain. Precious metal mining stocks shot upward about 4% while the VXO remained below 12.
Thursday, stocks in Asia and Europe closed slightly lower. The Bank of England decided to leave rates and QE unchanged while the South Korean central bank dropped their interest rates 0.25%. The South Korean economy ranks 15th in the world but this still qualifies as another shot of lighter fluid to goose the markets. In the U.S. stocks declined 0.6% perhaps in reaction to a rumor that QE may be being scaled down soon. VXO shot up nearly 8% but still languishes at 12.40. Trading volume for stocks was light.
Friday, in Asia stocks retreated 0.9% despite a nearly 3% rise in the Nikkei 225 Index. In Europe stocks rose 0.3%. In the U.S., stocks rose 0.4% on low volume. VXO again dropped over 6% to close at 11.63. Here’s a good article that reviews the current state of this stock market bubble. Here’s a voice of reason. I’m keeping my powder dry.