As someone who has watched trading screens for the past 36 years, it’s pretty easy to spot a fake market. As the charts below indicate, there is an invisible hand (or hands) pushing this stock market up when it should be plunging. The likely suspects are U.S. Treasury Secretary Janet Yellen’s Plunge Protection Team, known as the Exchange Stabilization Fund; foreign central banks that are aligned with the U.S. position on Ukraine and want to help stabilize financial markets in the West; hedge funds and Wall Street’s Dark Poolsowned by megabanks that are net long the market; or a combination of all of the above.
One thing’s for sure, the stock market is not responding in a normal fashion to soaring inflation, a hawkish Fed, spiking interest rates, and military aggression by an out-of-control dictator with 6,000 nuclear warheads.
Consider the chart below: since the Russian invasion of Ukraine on February 24, the yield on the 10-year U.S. Treasury note has skyrocketed by 20 percent, currently reaching 2.38 percent. That was a correct and normal reaction since inflation is already soaring in the U.S. and the military aggression is going to disrupt oil and gas supplies from Russia via sanctions, thus likely pushing commodity prices even higher. In a normally functioning stock market, an increase in yield of that magnitude on the 10-year Treasury note would have caused the stock market to plunge. Instead, per the chart below, the S&P 500 stock index has actually risen 5 percent since the Russian invasion of Ukraine….