Bloomberg’s narrative this morning of why stocks have been racing higher isn’t because central banks are pushing global yields into negative territory thus providing lift for growth stocks, or the dozens of rate cuts in the last year, or the Federal Reserve’s ‘Not QE’ leading to an abundance of liquidity, or record stock buybacks, but as the mainstream financial press states: “Small investors are back. In a big way.”
So apparently broke American consumers with insurmountable debts, including auto loans, credit card debt, and student loans, along with virtually no savings, are responsible for the recent rip roar in Tesla, Virgin Galactic, and Apple.
Sure… But let’s hear out what Bloomberg has to say. They mention since Ameritrade Holding Corp. offered free trading in October, trading volume from mom and pop brokerage accounts soared.
Ameritrade wasn’t the only one canceling trading fees, and this was seen industry-wide, an attempt by Wall Street to sucker in retail into a spectacular blow-off top that, as we explained above, has been produced by the Federal Reserve.
“When you take a bull market and juice it with zero commission trading, we can expect it to generate interest among retail accounts. That, it did,” said Jason Goepfert, president of Sundial. “Retail traders have become manic.”
Since the start of October, when E*Trade, TD Ameritrade, Charles Schwab slashed trading fees to zero, the S&P500 has soared 13%, and the Nasdaq 100 jumped 24%.
Bloomberg fails to mention, and why would they, that rapid growth in the Fed’s balance sheet exploded during the same time. So the perfect narrative to cover up the Fed’s massive money printing to lift stocks, we mentioned here: “One Bank Finally Explains How The Fed’s Balance Sheet Expansion Pushes Stocks Higher” – is to blame retail speculation for the next blow-off top in …
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