The market has indeed rallied because key players in the banking and
brokerage areas knew what was in the works, more massive stimulus. Had
not the Fed made such a decision, which four weeks later has not been as
yet announced, the market would not have rallied, it would have fallen,
and the perception of an economic recovery would not exist.
So bottom line and according to Chapman, we are back where we were 19 months ago before the stimulus package and the Fed’s injection of capital of some $2.3 to $2.5 trillion. The projection though now is $2.5 trillion each year to be injected annually for the next two years. There has been no move toward capital to assist small- and medium-sized businesses into expanding and hiring. Over the past 15 months loans to these companies have been cut by more than 25%, the antithesis of real recovery. Government’s answer to all of that circus was to extend unemployment benefits by another $34 billion. Banks are still carrying two sets of books with the blessing of the administration, the Bank for International Settlements, the BIS, and the international accounting group, the FASD. Most of these financial entities are still broke. That in part is borne out by the fact that half of the TARP funds haven’t been returned. TARP was the Fed subsidy, mostly to the financial sector, that allowed them to make money with cheap money and leverage, as the public was left to languish. It was only a month ago that banks began again to lend for automobile purchases, the result of which was an increase in sales of 15% recently. Government pressure on the lenders to make more subprime loans allowed the manufactures to increase sales. The sales recovery is underway and that is the reason why. .....Blackhawkpartners
So bottom line and according to Chapman, we are back where we were 19 months ago before the stimulus package and the Fed’s injection of capital of some $2.3 to $2.5 trillion. The projection though now is $2.5 trillion each year to be injected annually for the next two years. There has been no move toward capital to assist small- and medium-sized businesses into expanding and hiring. Over the past 15 months loans to these companies have been cut by more than 25%, the antithesis of real recovery. Government’s answer to all of that circus was to extend unemployment benefits by another $34 billion. Banks are still carrying two sets of books with the blessing of the administration, the Bank for International Settlements, the BIS, and the international accounting group, the FASD. Most of these financial entities are still broke. That in part is borne out by the fact that half of the TARP funds haven’t been returned. TARP was the Fed subsidy, mostly to the financial sector, that allowed them to make money with cheap money and leverage, as the public was left to languish. It was only a month ago that banks began again to lend for automobile purchases, the result of which was an increase in sales of 15% recently. Government pressure on the lenders to make more subprime loans allowed the manufactures to increase sales. The sales recovery is underway and that is the reason why. .....Blackhawkpartners
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