Bad News is Good News! (January 22, 2016)

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Can anyone seriously believe this garbage? Central banks across the globe are becoming increasingly dovish as it pertains to the world economy, so the markets react to the “bad news” of the high probability of even more stimulus by rallying the stock market up, higher and higher!

According to Mario Draghi:

“We’ve plenty of instruments,” Draghi said at the World Economic Forum in Switzerland. “We have the determination, and the willingness and the capacity of the Governing Council, to act and deploy these instruments.”

Plenty of instruments (translated):

  • Quantitative Easing
  • Negative Interest Rates
  • Cashless society
  • Bank bail-ins
  • Etc.

Further, you’ve got idiot Chinese government officials trying to calm the nerves of investors by reassuring the public that the government will play the role of Big Brother when things get bad:

“An excessively fluctuating market is a market of speculation where only the few will gain the most benefit when most people suffer,” Li told Bloomberg News after arriving at the World Economic Forum’s annual meeting in Davos, Switzerland. “The Chinese government is going to look after the interests of most of the people, most of the investors.

Li, 65, is the most senior Chinese official yet to underline the government’s readiness to intervene should the market turmoil of last summer and the start of 2016 continue. So far this year, the Shanghai Composite and the Hang Seng China indexes have both lost more than 15 percent, even as the central bank injects cash into the system to drive down borrowing costs and boost the economy.


Only the few will gain the most benefit when most people suffer…

No, really?

What else would you expect to happen when you keep attempting to fight the natural forces of a FREE MARKET by intervening anytime trouble starts brewing…

The markets want to sell-off!

The markets are desperate to go DOWN!

More stimulus/intervention = More “Wealth Effect”= More malinvestments = More kicking the can down the road!


Long-term ramifications will be even more drastic when this sh!tstorm is finally allowed to hit… You can’t keep the lid on the real bad news forever…


Buy the dips?


More like “Sell the rallies…


People are starting to wake up and catch on… This con game is an absolute joke!

But if the shorts want to load up on these type of mini-rallies for some more probable BIG GAINS in the upcoming weeks/months ahead…


My focus is on the long game. Market timing skill is a requisite to go short (e.g. buying puts). This is obviously risky stuff (although it can be extremely lucrative riding a downtrend). Do so at your own risk!


Just an example (one of many):

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CVX @ $83.57/share with oil just a smidgen over $30/barrel (dropping lower seemingly every week) and the markets beyond oversaturated with black gold!?!


I think we really do live in Bizzaro World…

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4 years ago

wait a minute. “so the markets react to the “bad news” of the high probability of even more stimulus by rallying the stock market up, higher and higher!” The market just fell 2,000 points in a very quick and precipitous manor. The markets were VERY deeply oversold. Its normal to have whats known as a pullback. That does not mean a trend change. The markets rallying 1% is not what I would consider to be ground breaking. The sellers are taking a breather, some bulls are showing up but the bears will resume. The news is really irrelevant because a… Read more »

The Dude
The Dude
4 years ago

The reason why markets rally in response to Draghi’s remarks is because it’s really great news for Greece! Stimulus is exactly what they’ve needed for a long time. Letting the free market run its course, is more or less exactly what’s happened for the last 7 years. Austerity clearly hasn’t worked. When you have 25%+ unemployment, what do you do to stimulate growth? Without growth, you don’t have a solution. You can’t cut spending and somehow stimulate growth. This is macroeconomics 101. So if Greece doesn’t have the ECB’s backing to do any kind of initiatives to stimulate growth, what… Read more »

Financial Samurai
4 years ago

Try to remove yourself from the market. Emotion will really derail you as an investor if you let it take control of you.

The Dude
The Dude
4 years ago

Sage advice