In this week's Off The Cuff podcast, Chris and Mike "Mish" Shedlock discuss:
- Fake, Fictitious Markets
- None of today's prices is justified by the underlying data
- Death By Drowning
- Too much liquidity is killing our markets
- Housing Bubble Trouble?
- Prices now declining in the San Francisco Bay Area
- Buy The @%&^ Dip!
- What will happen when this universal strategy no longer works?
After last week's brief re-emergence of volatility in the financial markets, the world's various sovereign plunge protection teams have been hard at work flooding liquidity into the system to push prices back up. Losses will not be tolerated!
And so the "Buy the dip!" crowd is victorious once again. This strategy, mindless as it is, has worked extremely well over the past 6 years — due to an ever-present influx of 'thin air' $billions supplied by the central banks. But for many reasons, that mindless approach can't — and won't — continue forever. And likely not for much longer. As Mish puts it:
One thing's clear in my mind though: Everyone's been trained that you absolutely cannot go wrong by buying the dip. So when the major market decline we're overdue for does start, that training will work to their doom.
Say the stock market falls off 15%. Let’s buy! Then we’re down 25%. A great time to buy! But the market refuses to recover this time and keeps dropping, vaporizing the increasingly traumatized dip-buyers. That’s the kind of scenario see happening. I just don’t know when it
by cmartenson 
