Bill King is bang on with his assessment of investor stupidity that led to the huge market rally yesterday.
"Ironically, or rather idiotically, traders poured into stocks on Blankfein’s assertion that Goldie is doing well because Goldie is short mortgage-backed securities and CDOs. Blankfein believes the financial situation will worsen: “...many institutions don’t understand what the credit crunch is going to do to earnings and their balance sheets.”
So what we have is a huge rally because Goldie will profit from the US economy and financial system going to hell. And people pay fortunes to go to Ivy League schools and B-schools to learn how to play the new economy!?!?! Apparently a critical mass of traders believes that not only what is good for Goldman is good for America but as long as Goldman profits everything else is immaterial...
Wal-Mart admits that customer visits declined in Q3; but food sales increased 5.3% and pharmacy sales jumped 7.9%. Thank God for food & drug inflation that is not recorded in official inflation!
Recession, inflation, dollar collapse, financial system implosion – no problemo, Goldie is making money so pour into stocks! And let’s be merry and jiggy now because Wal-Mart is booking Christmas sales weeks before Thanksgiving and food inflation is virulent enough to significantly boost revenue!"
