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The AP thinks it is good news that the Fed is continuing adding 85 billion per month in debt to the nation's deficit. And that is what the Fed is doing. It is purchasing government bonds (debt instruments) using money delivered to it by the US Treasury. This is money created out of thin air.
With typical naivete, the AP takes at face value the agitprop proclamations of the Administration, the "experts" who have a skin in the game, and the Keynesian economists who continue to cheer lead for their failed economic theory.
Read on:
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NEW YORK (AP) — The stock market hit a record high Wednesday as investors cheered the Federal Reserve’s surprise decision to keep its economic stimulus program in place. (Did investors really celebrate the Fed's decision, or was it a reaction based on other factors? There is no evidence that investors validated the correctness of the policy by their actions. It is foolish to assume that the Fed did the right thing because the stock market is up.)
Stocks traded slightly lower throughout the morning, but took off immediately after the Fed’s decision in the early afternoon. Bond yields fell sharply — their biggest move in nearly two years. (Ahhh, now we see that that "market" is not comprised simply of stocks. Bonds went down! It was a bad day for bonds, and bonds are the chief investment vehicle for retired people. In other words, the Fed's decision could just as well have been portrayed as a disaster for senior citizens.) The price of gold had its biggest one-day jump in four years as traders anticipated that the Fed’s decision might cause inflation. (Gold has been trending up for years as government spends recklessly. Gold prices flattened about the time of the sequester, but now are heading up again. This is a bad sign for the economy, because people turn to gold when they have no confidence in the economy.)
Fed policymakers decided to maintain the central bank’s $85 billion in monthly bond purchases, a program that has been in place since December 2012. The bond purchases encouraged borrowing by keeping interest rates low and encouraging investors to buy stocks by making bonds more expensive in comparison. (This is stated as unassailable fact. One might wonder, how does government borrowing increase consumer borrowing? And why is consumer borrowing automatically good? And why is buying stocks [equity] better than buying bonds [debt] better, especially if it it better for the Fed to buy bonds so that you don't? This statement makes no sense. If government borrows, doesn't that make it harder for consumers to borrow? Are consumers borrowing to purchase things, or to squeak by financially to pay their bills? How does government borrowing impact the job market? Corporate borrowing? As you can see, this is a complex equation.)
While the U.S. economy appeared to be improving, (As we just discussed, the media clings to this idea in spite of abundant evidence to the contrary.) the bank’s policymakers “decided to await more evidence that progress will be sustained” before deciding to slow the bond purchases. (We've been hearing about the "recovery" for five years now. We can read between the lines here: Continue the constant barrage of pretend good news while tacitly admitting the economy isn't improving. Therefore, the economic "fixes" need to continue. What they don't seem to understand is that the "fixes" are the problem. They are preventing the recovery.) The bank also cut its full-year economic outlook for this year and next. (Another ray of truth. The rosy predictions of the experts have not come true despite all their clever remedies, stimuli, bailouts, and profligate spending. So finally they have to admit things are not going well, and those projections are going to have to be a bit less optimistic.)
Stock traders shrugged off the Fed’s dimmer outlook and focused on the prospect of continued stimulus. (Is this really what happened? Is this news, or opinion? Is it possible that what happened in the stock market is unrelated to the Fed's news, or is it possible that the stock market reacted counter to the way it should have, or is it even possible that traders are either ignorant or devious in their response?)
The S&P 500 surged 20.76 points, or 1.2 percent, to 1,725.52, slicing through its previous alltime high of 1,709.67 set on Aug. 2.
The Dow Jones industrial average jumped 147.21 points, or 1 percent, to 15,676.94, also above its previous record high of 15,658.36 from Aug. 2.
The Nasdaq composite rose 37.94 points, 1 percent, to 3,783.64.
The fate of the Fed’s economic stimulus program has been the biggest question on Wall Street for months. It was widely expected that the Fed would cut back on its bond buying at the September meeting.
Tom di Galoma, a bond trader at ED&F Man Capital, said he was “completely shocked” that the Fed decided to wait.
Some investors advised caution, even as the stock market hit all-time highs. (Another ray of truth slips through. Why should there be caution if there is good news everywhere? Someone out there knows that bad things are coming.)
While the Fed’s decision is positive for the market in the short term, “investors need to take a step back and consider the idea that maybe the U.S economy is on weaker footing than we originally thought,” said Marc Doss, regional chief investment officer for Wells Fargo Private Bank. (The farther we read, the less obfuscation we find. The average person would probably not read the entire article. Perhaps they would only read the headline and conclude that there's good economic news. But by the end of the article we discover that not only is this not the case, the presentation is actually deceptive and even manipulative. The AP is trying their best to cover for the Obama Administration, but more and more bad news is happening. It's getting harder to cover up.)
Stocks traded slightly lower throughout the morning, but took off immediately after the Fed’s decision in the early afternoon. Bond yields fell sharply — their biggest move in nearly two years. (Ahhh, now we see that that "market" is not comprised simply of stocks. Bonds went down! It was a bad day for bonds, and bonds are the chief investment vehicle for retired people. In other words, the Fed's decision could just as well have been portrayed as a disaster for senior citizens.) The price of gold had its biggest one-day jump in four years as traders anticipated that the Fed’s decision might cause inflation. (Gold has been trending up for years as government spends recklessly. Gold prices flattened about the time of the sequester, but now are heading up again. This is a bad sign for the economy, because people turn to gold when they have no confidence in the economy.)
Fed policymakers decided to maintain the central bank’s $85 billion in monthly bond purchases, a program that has been in place since December 2012. The bond purchases encouraged borrowing by keeping interest rates low and encouraging investors to buy stocks by making bonds more expensive in comparison. (This is stated as unassailable fact. One might wonder, how does government borrowing increase consumer borrowing? And why is consumer borrowing automatically good? And why is buying stocks [equity] better than buying bonds [debt] better, especially if it it better for the Fed to buy bonds so that you don't? This statement makes no sense. If government borrows, doesn't that make it harder for consumers to borrow? Are consumers borrowing to purchase things, or to squeak by financially to pay their bills? How does government borrowing impact the job market? Corporate borrowing? As you can see, this is a complex equation.)
While the U.S. economy appeared to be improving, (As we just discussed, the media clings to this idea in spite of abundant evidence to the contrary.) the bank’s policymakers “decided to await more evidence that progress will be sustained” before deciding to slow the bond purchases. (We've been hearing about the "recovery" for five years now. We can read between the lines here: Continue the constant barrage of pretend good news while tacitly admitting the economy isn't improving. Therefore, the economic "fixes" need to continue. What they don't seem to understand is that the "fixes" are the problem. They are preventing the recovery.) The bank also cut its full-year economic outlook for this year and next. (Another ray of truth. The rosy predictions of the experts have not come true despite all their clever remedies, stimuli, bailouts, and profligate spending. So finally they have to admit things are not going well, and those projections are going to have to be a bit less optimistic.)
Stock traders shrugged off the Fed’s dimmer outlook and focused on the prospect of continued stimulus. (Is this really what happened? Is this news, or opinion? Is it possible that what happened in the stock market is unrelated to the Fed's news, or is it possible that the stock market reacted counter to the way it should have, or is it even possible that traders are either ignorant or devious in their response?)
The S&P 500 surged 20.76 points, or 1.2 percent, to 1,725.52, slicing through its previous alltime high of 1,709.67 set on Aug. 2.
The Dow Jones industrial average jumped 147.21 points, or 1 percent, to 15,676.94, also above its previous record high of 15,658.36 from Aug. 2.
The Nasdaq composite rose 37.94 points, 1 percent, to 3,783.64.
The fate of the Fed’s economic stimulus program has been the biggest question on Wall Street for months. It was widely expected that the Fed would cut back on its bond buying at the September meeting.
Tom di Galoma, a bond trader at ED&F Man Capital, said he was “completely shocked” that the Fed decided to wait.
Some investors advised caution, even as the stock market hit all-time highs. (Another ray of truth slips through. Why should there be caution if there is good news everywhere? Someone out there knows that bad things are coming.)
While the Fed’s decision is positive for the market in the short term, “investors need to take a step back and consider the idea that maybe the U.S economy is on weaker footing than we originally thought,” said Marc Doss, regional chief investment officer for Wells Fargo Private Bank. (The farther we read, the less obfuscation we find. The average person would probably not read the entire article. Perhaps they would only read the headline and conclude that there's good economic news. But by the end of the article we discover that not only is this not the case, the presentation is actually deceptive and even manipulative. The AP is trying their best to cover for the Obama Administration, but more and more bad news is happening. It's getting harder to cover up.)
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