I’m not sure if you realize this, and I’m sympathetic if you do not, but: we live in insane times. And I’m afraid “insane” fails to capture the full madness of it all.
Liquidity moves markets!Follow the money. Find the profits!
For example, I would propose updating the formal definition of stock market valuation. In simpler times, it was something like this:
The value of a given equity is worth the sum of all of its future dividend payments, discounted back to their present value. In other words, it is used to value stocks based on the net present value of the future dividends.
Whereas the more modern, hip, up-to-date version should be along these lines:
The value of equities is computed in a virtual fun house in which a bunch of random, totally unpredictable shit happens, any time, night or day, yanking valuations suddenly and without warning in any direction imaginable.
I mean, just witness the past twelve hours. This is both insane and inane:
So here’s my real question, and I’m quite sincere. I’m going to propose a sentence whose ending is unknown (and perhaps doesn’t even exist). I’d like you to suggest an ending, and it is as follows:
Jerome Powell will be able to keep steadily pushing the S&P 500 to an unlimited high value so long as he keeps throwing Repo-Bux at the market (currently at a rate of $150 billion every single night) until such time as ______________________________
Any guesses? Or is the final bit unnecessary?
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