Earnings Go Down, But the Market Goes Up

Earnings Preview: Companies Getting More Pessimistic – MarketBeat – WSJ.

Why do decreasing earnings somehow lead to a rising stock market? The simple answer is that the manipulation of the money supply by the federal reserve is decoupling the market from the reality of economic fundamentals.  The Federal Reserve is really in a no-win situation here. If it does nothing, the markets will eventually crash, and it will be blamed. On the other hand, if it continues down the path of money creation, we will eventually have a crash and it will be blamed for not doing enough money creation.


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