The S&P 3000 Dream

Market Settles in for End of Quarter Marker

Obviously Wall Street and the 401K managers around the country have a great interest in printing as good a end of quarter price as possible tomorrow. Their hope is that somehow the market will rally to the S&P 3034 March 4 low price level, a dream level, the level where they had their last chance to go to the sidelines before the crash.

The Technical Price Situation today

The S&P market numbers that are front and center for the next few days, 2429 short term support, 2576 short term resistance, and 2722, the Hope level attractor. The problem is, this is a sick market that wants to play but would really have to stretch to make any real rally happen.

Maybe a look at the fundamentals are in order at this time

First, the Virus was only the pitchfork that punctured the economic bubble, note I am not saying just the stock market or bond bubble, this is a comprehensive bubble. This was a bubble characterized by leverage and speculation with too little investment in real growth. In reality no one should have been bailed out for not having reservations, but the country has not had had to deal with reality for years and who knows when that will happen.

SO:

  1. Why has Capitalism failed again?
  2. Why didn’t corporations have six months of reserves to cover emergencies?
  3. The answer is pure and simple. Low interest rates do not encourage reserves.

How does the US turn this around?

  1. Fire the FED, bring in new governors who believe in hard money.
  2. Raise the FED funds rate to a 3.5 percent floor.
  3. All federal bailouts be In the form of stock priced at a 40 percent discount to current price.
  4. Mandate stewardship as the governing principle of corporations.

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