Quote:
Originally Posted by burdell
With computers making thousands of trades a second based on 'trends' and who knows what else it's certainly no longer based mainly on the performance of the companies whose stocks are traded.
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That's an excellent assessment right there.
Electronically...
Mircea
Quote:
Originally Posted by txgolfer130
Ha. More ineptness exemplified by fear mongers and myth repeaters.
Dow up 62% since PRESIDENT Obama took office. S&P up over 81% since PRESIDENT Obama took office.
Economic fail=GOP.
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That's meaningless.
#1 The stock market loses 40.9% of its "value" over a period of 959 days. Characterize the state of the economy during that time.
GDP growth was averaging an astounding 12.5% per quarter = economics fail for you.
That actually happened September 1939 to April 1942
#2 The stock market sets records over a period of 651 days. Characterize the state of the economy during that time.
That was the recession 1957-1961. The DJIA doubled in value from 250 to 500+.
#3 The stock market loses 45.1% of its value over a period of 694 days. Characterize the economy.
That was January 1973 to December 1974 US GDP grew at rates of 1.03% per quarter to as much as 3.77% per quarter, averaging 2.24% per quarter over those 8 quarters.
As you can see, your claims are refuted and the stock market is not an indicator of a growing economy or a recessionary economy.
However, the stock market is an indicator of where investors believe they will make money, and if they don't think they'll make money in stocks, they'll pull their investments and redirect them to bonds, promissory notes and dozens of other investment vehicles.
The fact that the markets continue to surge even though GDP has been declining for the last two quarters should be proof enough that there's no relationship between the economy and the stock market, but I guess some people aren't smart enough to see that.
Quote:
Originally Posted by txgolfer130
The DOW, the S&P, NASDAQ relate to the relative health of the "corporate" economy who can no longer continue the mantra that they can't move forward b/c of uncertain points in the future.
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Fail.
Corporations are hoarding money. The reason corporations are hoarding money is because during times of economic instability and volatility --- like now -- cold hard cash is the only way a corporation can defend itself from an hostile takeover, a leveraged buyout, or a forced merger.
I've repeatedly cited real world examples on numerous threads --- the most notable being Kroger's defense against corporate raiders K R Kravitz. Kroger's took the huge mountain of cash it traditionally sits on (generally 1/3 of Kroger's assets are cold hard cash) and paid down some of its debt to refinance it and lower debt payment, and the took the rest of its cold hard cash and started buying up its own stock.
I've also mentioned the now-defunct Zenith Corporation.
Zenith was broke, couldn't make a profit, and so it sat there helplessly while Korean corporation Life's Good (LG -- I have one of their external DVD players -- very nice) bought up all of Zenith's stock -- and the LG owned Zenith.
That uncertainty still exists.
Quote:
Originally Posted by txgolfer130
It climbed during the great depression...
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When the economy was tanking and GDP was declining at 10% per quarter.
When the economy was soaring and GDP growing at 12.5% per quarter, the stock market fell apart.
Quote:
Originally Posted by txgolfer130
Consumer confidence is up 92%.
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Oh, yes, the very same consumers who bought a $250,000 McMansion starter-castle with no money down, because everyone knows that paying $318,000 in interest makes financial sense....
...the very same consumers who buy a $1,700 plasma TV on credit and pay $1,700 for the TV, plus $1,789 in interest...
....the very same consumers who think health care is "free"...
As to the people they have no understanding, and only repeat what their rulers are pleased to tell them." To get a doctrine accepted or rejected it is only necessary to have it praised or ridiculed in a popular play. --- Plato 410 BC
As to the people they have no understanding, and only repeat what the pollsters are pleased to tell them." To get a doctrine accepted or rejected it is only necessary to have it praised or ridiculed in the Media --- Mircea 2010 AD
...gosh, thanks, I feel so much better now.
Economically...
Mircea
Quote:
Originally Posted by Globe199
We're headed down the same road as Greece . . . because someone said we're headed down the same road as Greece.
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No, you're headed down the same road because you are spending more than you can every collect in revenues; because you have future unfunded obligations that you can never possibly cover financially; and because the rest of the world will not be able to finance your spending spree much longer.
Because....
Mircea
Quote:
Originally Posted by Finn_Jarber
Yep, that's the big thing. Even EU considers the US automatic cuts etc aka "fiscal cliff" the biggest threat to global economy at this time. I hope the Congress and WH can come to an agreement for once.
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What's the point?
Whether you jump over the cliff tomorrow and 5 years from now, you're going to jump over the cliff. Delaying the inevitable only increases the pain and suffering.
Automatically...
Mircea
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