William Thien

A “Bull Market?” Really? A “Bull Market,” You Say.

Posted on: August 25, 2015

This evening while switching between two major network news stations during the evening news I overheard the financial analysts speaking about today’s plummeting stock market. Both analysts made the statement in some context that “we have been in a sustained ‘bull market’ for several years.”

That of course is a false characterization of the market and may have propagandistic origins. The term “bull market” refers to an exceptionally well performing market under “normal” market conditions. Keeping the interest rate low, zero in fact or thereabouts as the discount rate has been kept for several years, is not a function of a “normal market.”

The United States has not been in the midst of a sustained “bull market.” What we are in is an artificially stimulated market that is the result of unnaturally low-interest rates kept low for an extended period of time, part of a program to improve the economy called “Quantitative Easing.”

What we have really been in is a market that has been kept on life support since 2008 and now that the market has grown accustomed to the machinery keeping it alive any talk, a whisper, whatever, of pulling the plug has had disastrous effects on the market. It’s not just a reaction to a fall in the Asian markets we are witnessing as many analysts are claiming. The market and the economy are fundamentally unsound. All performance measurements are based on the extraordinary fact that interest rates have been kept at or near zero.

I am not saying you need to exit the market. But clearly we are not in a “bull market” and it helps to have accurate information when making sound decisions about your financial future, something which the major network news financial analysts are not providing when they falsely characterize the market as a sustained “bull market.”

The major fluctuations in the market are a panicked reaction to a potential and necessary increase in interest rates which the FED has been delaying. What we are seeing now is that the market is so unstable that a mere discussion of even a minor adjustment to interest rates is causing a significant, disproportionate correction prior to any adjustment to interest rates ever even happening, any adjustment whatsoever.

That’s not an indication of a “bull market.”

That’s something else and in mixed company I don’t think it should be mentioned.

Copyright © William Thien 2015

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1 Response to "A “Bull Market?” Really? A “Bull Market,” You Say."

I pretty much agree but for the life of me, have a impossible time trying to make something more tangible and predictive out of that assessment.

Something tells me, re. all this govt. and other-man-made market-manipulated stimulation, that future gain lies in getting involved with the business of creating evermore-subtle market manipulators, particular those that stoke markets solely to partially provided-for by government-created resources.

I don’t necessarily like that possibility; in fact, i don’t really like it at all.

But I nonetheless believe that is the way things seem to be going.

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