Since the downgrade of major US banks a few weeks ago, market manipulators have not initiated selling to create panic among market participants. As previously mentioned, the strategy to create panic selling is not working any more as market participants learn the trick and is no longer selling in a panic for market manipulators to take profit. As a result, during market manipulators' last selling, day traders and individual speculators follow market manipulators during the two days when market makers are actually selling. When market manipulators stop selling, day traders and individual speculators follow closely and do not oversell. As a result, there is not enough room for market manipulators to liquidate the positions with thin trading volume.
As the selling strategy no longer works, market manipulators remain on the sideline and wait for another opportunity. There may be an event that can create panic selling. Or market manipulators may change to new strategy which is not recognized by market participants. Since market is flooded with capital and there is no other investment opportunity that can provide satisfactory return, market manipulators should remain in the equity stock market which is highly manipulative and speculative.
Cain 999 plan: Road to a Fair Tax
Ultimately, Cain wants the country to adopt a Fair Tax. He's not the first presidential candidate to propose it. In 2008, for instance, Mike Huckabee made it a central part of his economic plan.
In essence, it's a national sales tax that would replace the current tax code entirely and all the credits, deductions and exemptions that go along with it.
A Fair Tax, like any tax that applies across the board to everyone regardless of income, would hit the poor harder than others.
To correct for that, all taxpayers would receive a monthly rebate check equal to what someone at the poverty line would pay under the Fair Tax. That would mean poor people would get back the tax they paid in.
"Every serious effort to score the Fair Tax by the Treasury Department, Joint Committee on Taxation and the Brookings Institution has concluded that a rate significantly higher than 23% would be necessary for it to be fiscally neutral," Bartlett said.
Experts have also expressed serious concern about both the administrative complexity and potential for tax evasion in terms of how the Fair Tax would interact with state and local taxes.
Consumer Confusion: Sales Up But Confidence Down — Here’s Why It Makes Sense
A strange economic trend appears to be emerging with American consumers. Retail sales have been trending higher while consumer confidence is at a 30-year low.
What accounts for the increase in sales is the top earners in the country are doing fine.
But, there's another larger group that's struggling to get by, which explains the consumer worry. "Eighty percent of consumers are in a depression," says Davidowitz.
It's this growing gap between the haves and have-nots that is responsible for the Occupy Wall Street movement, says Davidowitz.
Are US Financials a Buy?
Even as financial shares on Wall Street have slumped as much as 40 percent in the past year, the investment community remains divided about whether it is now a buy or still a sell for the lenders.
But fund manager Bill Smead disagrees, saying the sell-off in the shares of U.S. banks this year is exactly the reason to be buying into the sector.
"The second thing is... we feel like we're getting close to the end of that down-swing because the people that are overweight financials are paying a very, very stiff price for it right now," he said, adding that while financial stocks could still see some pain, investors with a medium to long term horizon could do well.
"The biggest reason that we're still scared of the banks is Europe," Young said. "That situation...is still far from being resolved, despite these short-covering rallies that we see from time-to-time."
A recipe for stock market volatility
In an interview, he argued that abnormally high stock market volatility will persist so long as no major asset class offers attractive long-term returns.
Because of this situation, many investors who are in the stock market are little more than fair-weather friends. They remain in equities not because they are excited about the stock market’s long-term returns, according to Tint, but instead because they have no good alternative.
And with the markets as susceptible as they are to investor emotions, it’s possible that “animal spirits,” to use Keynes’ famous phrase, could prop up the stock market for a while longer.
Nevertheless, Tint concludes, “It’s hard to imagine that this decade won’t be a disappointing one, not just for stocks but for all asset classes.”
Foreigners are buying U.S. homes
International purchases of American homes are ramping up, and a new Senate bill designed to boost the ailing real-estate market would encourage globe-trotting investors to buy even more.
The bill, co-sponsored by Charles Schumer (D-N.Y.) and Mike Lee (R.-Utah) would grant a U.S. visa to international investors who agree to spend at least $500,000 on residential real estate here.
Foreigners seem to have more confidence in the U.S. real estate market than Americans do. Almost half of buyers surveyed by NAR cited the profitability or safety of their investments as the main factor that persuaded them to buy.
"With the economic distress in Europe," said Miller, "people are still looking for safe havens for investing and the U.S. is perceived globally as safe."
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