Consumer driven deflation and Hunt Brother syndrome – the stock market bubble is worse than that of the real estate
Rob Molta
May 16, 2007

Tax cuts for the rich and dividend tax breaks have created huge wealth in the hands of the few who are driving industrial blue chips up while the rest of the market is lagging behind. We saw something like this when Hunt brothers tried to corner the silver market creating the mother of all bubbles in silver. They failed. Those who knowingly, or unknowingly, create bubbles against fundamentals lose it all.

Consumer driven deflation is in control of the economy. According to media reports, Wal-Mart and Home Depot, the two largest US retailers, issued earnings warnings on Tuesday that painted a gloomy picture of US consumers beset by a depressed housing market and rising energy costs.

At the same time, the Dow industrials rose 37.06 to 13383.84, yet another new record. But other major indexes fell, unable to sustain an early rally sparked by tame inflation data. Edward Lampert's hedge fund has bought more than 15 million shares of Citigroup, currently valued at over $800 million.

Can these hedge funds and private equity groups flushed with money from the tax cuts for the rich really defy the fundamentals of the market. This is not the first time. They tried the same game between 1927 and 1929. Dow Jones Industrial Average made unprecedented numbers of high in those two years. The diverge was the highest as a lot money in the hand of a very few chased the blue chips till everything fell apart.

Shorting in this market can be dangerous. You do not know how much they have to push the market higher and sucking every body in before throwing the baby out of the window all on a sudden.

The stock market bubble is far worse than the real estate bubble. The Fed called the real estate bubble as regional froths. Perhaps they will the stock market bubble as localized anomalies! The stock market bubble is worse than that of the real estate.

Consumer driven deflation and Hunt Brother syndrome – the stock market bubble is worse than that of the real estate
Rob Molta
The stock market bubble is far worse than the real estate bubble. The Fed called the real estate bubble as regional froths. Perhaps they will the stock market bubble as localized anomalies! The stock market bubble is worse than that of the real estate.
READ MORE>>

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