Video: Why the DOW may hit 4000 (transaction, inflation, price, market)

[neil0311]

Originally Posted by Stac2007

How much longer can our economy survive with our gross domestic product continually dropping and the federal government printing worthless dollars to shore up bad corporations? At some point its going to come to an end.

You make some pretty big leaps and assumptions. We had a pretty steep drop in GDP in Q4 CY2008, but we haven't seen the numbers of Q1 CY2009, so you can't say "continually dropping". It may be negative, but it could be less bad than Q4, and even if it's as bad or worse than Q4, that's what can happen in a recession. Our economy will survive and recover, just like it has many times before.

I'm beginning to think that one of the negatives that has come from years of economic growth and mild recessions is that people just expect the economy to always be good and freak out when a real downturn takes place. I remember the 70's and the early 80's. It makes you appreciate the good times and plan for the bad times.

[cyfjeff]

i don't think it will ever go 4000 again, may test 6000 a couple of times before recovery.

[k374]

Originally Posted by cyfjeff

i don't think it will ever go 4000 again, may test 6000 a couple of times before recovery.

yes, sure... that is what they were saying about 6000 just a few months ago

[neil0311]

Originally Posted by killer2021

dow will hit 4,000 before it hits 8,000.

DOW 7924.56 174.75 +2.25%

You sure you don't want to bet?

[freedom]

Originally Posted by neil0311

DOW 7924.56 174.75 +2.25%

You sure you don't want to bet?

You've touched on a very interesting point...

Investing shouldn't be gambling... Vegas doesn't like competition.

[neil0311]

See, that would have been easy money 8,062.43 +300.83 +3.88%

[Stac2007]

What’s funny about the market going up is I don't hear any good news coming for the private sector. Unemployment is still rising and the government is still printing money with no gross demostic product to cover it. It sounds very fishy. The government is creating more new taxes to the point where it’s going to crush the middle class. All I see is Wall Street desire to see a rebound.

[k374]

The news is terrible, the economy is going from bad to worse, the rally right now is based on hope and denial of the reality. It is based on hope that whatever is being done right now by the government is going to work. Once it is realized that none of the proposed fixes are working and the next leg of massive losses start (commercial real estate, credit cards, option arms, auto loans) the markets will crash to new lows.

Perhaps Obama will call for another $2 Trillion to be printed at that stage and our National Debt will actually reach 100% of GDP (of course our GDP itself is shrinking at an annualized rate of almost 7% and climbing)

[neil0311]

Originally Posted by k374

The news is terrible, the economy is going from bad to worse, the rally right now is based on hope and denial of the reality. It is based on hope that whatever is being done right now by the government is going to work. Once it is realized that none of the proposed fixes are working and the next leg of massive losses start (commercial real estate, credit cards, option arms, auto loans) the markets will crash to new lows.

You choose to ignore all the positive signs of which the market rise is but one. If you look at employmenyt as an indicator, you'll be waiting until we are well into recovery to see major improvement that will make you happy. Sure there are plenty of negatives out there, but that's not the whole story, and the economy is NOT gong from "bad to worse." That's just plainly inaccurate. If anything, what we need to be watching for is inflation. That is the threat we face. Deficits, runaway spending by Democrats, and inflation.

There is not a single credible economist or journalist that I have read or heard that believes what you state. The pessimistic crowd claim a recovery could be at least a year away and may be flat, but NO ONE believes the doom and gloom scenario you espouse.

Some folks just love to see the glass as half empty, but what makes me laugh are the folks who think the glass is completely empty and cracked. That was my point with challenging the "Dow will hit 4000 before it hits 8000." It's hit 8000 just weeks after that pronouncement. So much for the end of the world. I know...we're all just dupes and fools. The end of the world is nigh.

[Dd714]

Originally Posted by k374

The news is terrible, the economy is going from bad to worse, the rally right now is based on hope and denial of the reality. It is based on hope that whatever is being done right now by the government is going to work. Once it is realized that none of the proposed fixes are working and the next leg of massive losses start (commercial real estate, credit cards, option arms, auto loans) the markets will crash to new lows.

That's not entirely true. Home sales have been up, consumer spending is up, some other leading indicators are up. Some companies are reporting suprise profits.

I have my doubts on the "fixes" as well, but I see them as just delaying the recovery, not destroying anything.

The only thing is unemployment continues to rise, which is normal - jobs are always the last thing to come back in a recovery.