2010-09-04zerohedge.com

This is very very interesting. We may have a "smoking gun" here in terms of surreptitious market propping (by the Fed and cohorts).

The first chart in this is what you want to be looking at. Note the "divergence" between stocks and bonds near the end (for bonds, downward means bonds are in favor... the opposite is true for stocks.) The chart shows both bonds and stocks are relatively "in favor", with stocks staying unusually lofty.

The analyst discussion about what is going on here is hogwash. Of course, money has to be in EITHER stocks or bonds, assuming it isn't going somewhere else like gold (but if this was happening in a big way, BOTH stocks and bonds would be crashing).

How can it be going into both at the same time? One word: printing.

I suspect what is going on here is that there is a huge amount of money (printing) being poured into the Treasury market by the Fed (only some of which they've fessed up to); and at the same time, also a significant amount going into the stock market, to keep it from crashing horribly like 1932.


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