What Holds The Market Up?
A thread I see consistently popping up in various forums is the question, "What is holding the market up?" Or to paraphrase, "Where's the crash?"
I think there's a simple answer. It's a bubble and it needs pinprick.
Past bubbles tended to pop after oil prices rose and fell. You could see the unraveling as oil prices reached their zenith.
For now, we're still in a demand destruction phase. We're still shedding jobs. Costs are going up for everything, so people are limiting purchases to only those things they need and often, limiting those.
Until this bottoms out, or oil production drops significantly, I think we may see the market continue to be buoyed by seemingly, nothing at all.
This time around we might see some other event occur to pop the bubble. It could be a war, an assassination, or a natural catastrophe. There's no way to know.
For now though, if I had money to blow, I'd be betting that once again, it will be an intersection of supply and demand for energy. Perhaps this time natural gas could take center stage?
Forecasters are already calling for a harsh winter. Global Warming is being temporarily repressed by El Nino. If we do get a cold winter, then our economy could take a big hit, as demand for natural gas and heating oil rises. But don't worry, FOX will be running debates on Global Warming and ignoring the economy. Things will look much as they do now. More distractions, more bailouts, more job loss, more green shoots...