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Old 07-13-2010, 11:11 PM
 
5 posts, read 9,713 times
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Really, what good news is out there? Seems like everyday, the market goes up 140 points on absolutely no good news. Unemployment numbers seem grossly understated; it seems like every number that comes out is skewed to reflect this misguided optimism (denial?) that people still hold onto in order to desperately convince themselves it's not as bad as it seems. Talk of "recovery" is bandied about like it's an absolute reality and inevitability. A "double dip" is spoken of sparingly and in hushed tones on all the major news networks and the "d word" is nearly taboo. What's missing here? Are we getting the full picture or what?
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Old 07-14-2010, 12:25 AM
 
1,946 posts, read 5,388,206 times
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It's a bit more complicated than what the latest economic indicators are showing. And you'll probably get 10,000 different opinions on what it should be at or why it responds in a certain way.
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Old 07-14-2010, 12:38 AM
 
2,409 posts, read 3,043,065 times
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The entire stock market nowadays is based on speculation. Much of corporate America is holding as much debt as the citizens are of this country. They look good on balance sheets and on paper but many including GE are in debt up to their eyeballs. The stock is in no way indicative of the greater strength of the economy. It used to be but not anymore. We've speculated our way into a corner. The stock market is only good at representing one thing and one thing only.......BUBBLES!
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Old 07-14-2010, 06:10 AM
 
13,005 posts, read 18,922,663 times
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The stock market is supposed to be a leading indicator. If it is going up things should improve in a year. There was a correction a few weeks back, which was long overdue. (Incidentally it is only called a correction when it goes down after going up too fast, never the other way). Study some financial history. You will find a rally started in August 1982, but the economy did not start recovering until sometime late in 1983. Let us hope it is still a good leading indicator!

Last edited by pvande55; 07-14-2010 at 06:11 AM.. Reason: missing verb
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Old 07-14-2010, 06:38 AM
 
Location: Pennsylvania
5,725 posts, read 11,723,245 times
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People buying stocks in companies either directly or through mutual funds are more interested in returns than in employment. Companies that shed employees might actually be creating a stronger bottom line, at least in the short term. It's in this sense that you get the whole 'Wall Street is divorced from Main Street' thing.
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Old 07-14-2010, 06:40 AM
 
28,453 posts, read 85,431,256 times
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Many formerly useful measures have been less useful in assessing the likely direction of things. There is a splintering of markets and data tat no one is really capable of putting their head around. Individuals and firms have made dramatic shifts in how much cash they feel is a safe cushion AND how low a return they will tolerate on that cash from bonds and banks.

While unemployment rates are higher than what people had formerly thought would be acceptable there is growing belief that decades of shifts in how businesses utilize temporary workers and productivity is largely maintained my require a rethinking of what level of employment is sufficient to keep things in balance...

Huge numbers of fairly bright, industrious people have figured out that if there is insecurity in the traditional workplace perhaps it makes sense to build alternate sources of income. If changes in healthcare and other traditional employer benefits mean that large employers will be less and less of a factor, or only part of an income stream, one possible path is that people will be less dependant of "full time work"...

Alternatively if the political leaders are intent on remaking this country in the model of very paternalistic society such as exists in some European countries, while ignoring the very significant differences that we have always had culturally and with regard to immigration policies then it likely that other countries with more forward economic poliicies will usurp our role of preemince.
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Old 07-14-2010, 07:10 AM
 
14,994 posts, read 23,909,120 times
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I wouldn't describe the stock market as "bullish" at all. Certainly not "way up". I would describe it as hesitant, uncertain, just like the rest of american.
In the short term, the stock market may go up, or down, based on what they percieve as good or bad economic news. Right now I would not say their is any optimism in the market, nor is there any doom and gloom feelings....just, hesitant. The business world is still uncertain on the impact of health care legislation, corporate taxes, and borrowing difficulaties. Let's face it - that is costing jobs (businesses are not hiring) more than it is effecting the market even.
Jobs are always a lagging indicator, meaning it is the last to come back during a recession. But if a company can get short term gains, i.e. profits, by delaying hiring - that will improve the stock market at the cost of jobs. Unfortunetly the climate of uncertanty is also effecting job growth.
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Old 07-14-2010, 07:12 AM
 
14,994 posts, read 23,909,120 times
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Quote:
Originally Posted by SoCalCroozer View Post
The entire stock market nowadays is based on speculation. Much of corporate America is holding as much debt as the citizens are of this country. They look good on balance sheets and on paper but many including GE are in debt up to their eyeballs. The stock is in no way indicative of the greater strength of the economy. It used to be but not anymore. We've speculated our way into a corner. The stock market is only good at representing one thing and one thing only.......BUBBLES!
A balance sheet will reflect both long term and short term debt (remember accounting 101). I can tell you for certain that debt, the quantity and quality, effects a companies stock value.
On the contrary, I think the lack of borrowing and investment is hurting businesses. Cash is king right now, companies are hesitant to borrow (invest), banks are hesitant to lend.
Speculation? No argument. Computerized trading also is playing a big part. Most of the trades now are done by computers looking at indicators and automatically selling or buying when certain points are triggered.
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Old 07-14-2010, 08:23 AM
 
1,475 posts, read 2,557,239 times
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Quote:
Originally Posted by bormeunchini View Post
Really, what good news is out there? Seems like everyday, the market goes up 140 points on absolutely no good news.
That's big institutions buying/selling to keep the market activity up. It's just a way to make sure the gambling doesn't stop.
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Old 07-14-2010, 08:32 AM
 
28,453 posts, read 85,431,256 times
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Default Well whose money are they trading with?

Quote:
Originally Posted by Rich_CD View Post
That's big institutions buying/selling to keep the market activity up. It's just a way to make sure the gambling doesn't stop.
...I suppose the black helicopter types have a theory to cover that too?
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