What’s good for Main Street is Bad for Wall Street.

Last Friday, many of the stocks finally retreated. Even though by small amounts, the change in the direction was quite significant. What terrible things could have happened to cause it?

THE GOOD NEWS!

Unemployment unexpectedly fell down to 10%. Shouldn’t that be a happy sign celebrated by all? Well, it was… for an hour.

As an afterthought, market movers realized that the drug they enjoyed for the last few years – FREE MONEY – can be taken away. If recession is over and unemployment is improving, there is no reason to keep low interest rates. This means that the dollar will strengthen and eventually Wall Street gamblers would have to pay back a more valuable green bucks.

The current Ponzi Scheme orchestrated by Bernanke and abused by anyone who has access to  liquid assets is very simple – get as much cheap money as you are allowed, pump it into the stock market, wait to make fat profits, sell the stocks and repay back the dollars that by this time might compete in value with the toilet paper.

This scheme should keep everybody happy (at least for a while) – retirees, municipalities, hedge-funds and mutual-funds whose current gains would erase all the previous losses, big players who make killing and little players who find a new hope. After all, what lamb has been sacrificed – dollar, future and morality? Not a biggie for today’s enjoyment.

Weak dollar also helps to expand export and narrow US trade deficit – let’s do it at cost to other nations. Sorry for the repetition, but wouldn’t it be beneficial for everybody to pay China’s 2 trillion dollars reserves back with the toilet paper money? It should be enough to cover the needs of 1.4 billion Chinese people. Who would say that Fed’s Chairman is not a genius?

And only a few people ask the right question – is Bernanke an idiot or a prostitute? There is no free lunch on Wall Street. Someone would have to pay. Just think of it like a swing – if you want to stop it, don’t push it in the opposite direction – try to slow it down. Obvious? Nope.

When market collapsed, did Bernanke thought of you and me, homeowners, employees, taxpayers? NO! All the money were given to the banks, so they can keep it, make easy profits and pay bonuses. This funding was not for Main street people. Fed Funds discount rate went down from 6.25% in June of 2006 to 0.5% in December of 2008. Did you get a 5.75% break on you mortgage? … Me neither.

“There is a Chinese saying that one could quench the thirst by drinking poison,” said [Andy] Xie (former Morgan Stanley chief Asian economist), who predicted in September 2006 that the U.S. economy would fall into a recession in 2008. “Bernanke seems to be prescribing exactly this to the U.S. economy. The slower Bernanke raises interest rates, the bigger the next crisis.” Read the whole article from Bloomberg News.

Are we all getting poisoned by Fed chairman and Wall Street Co.?