Discussion in 'ETFs' started by bat1, Nov 21, 2009.
I say look out below!
The OP's question assumes the free market is in charge of the DOW, which is not the case. Read it up. Gold is inverse to the dollar, and yet the recent dollar moves have been parallel to gold. The DOW "industrial" average is not industrial, as more of the companies in that average are overseas, displacing American workers.
If the OP assumes the current market operates without influence by domestic and foreign govt and govt agencies, then that is the issue they have to correct themselves on first, before proceeding to anything related.
there is no correlation. In fact there is no correlation of the stock market with the real economy or the presiden'ts approval ratings at all.
however, one thing that is correlated is that funds have been holding back in anticipation of socialist policies being passed. You will continue to see low-little liquidity in the markets, meaning that little voluem can provide big swings in the markets like these past 6 mths, and whether the market goes up 10 million or down 10 million is anybody's guess
I'm only saying a version of what the other two responders have said but...
Moral hazard is preventing people from selling some assets and 100x P/E has been preventing others from coming into the market (that's from zerohedge, but I like the way he put it).
The stock market today is a reflection of simple asset inflation (artificially low interest rates produce artificially high valuations) and dollar devaluation (if the dollar is debased, the nominal price of an asset rises).
If they pass this healthcare bullshit, the drag on the economy will take a while. Higher tax rates for everyone - particularly for the high earners who have traditionally put more of their income aside to invest in new and existing businesses. The higher tax rates will do nothing to reduce the risk of starting investing or the effort to produce income but they will reduce the reward. The economy will stagnate, people's motivation to work and produce will evaporate and there won't be the funds to pay for all the now more expensive promised health care. Cancer survival rates will fall and your children will leave the country to look for work. But that will all take years.
So, if the disaster going by the name of health care reform passes, we'll have bigger problems than a dying stock market.
Time to look into trading on a foreign exchange.
Not convinced here. We have a DOW above 10k because of ZIRP. Some would say DOW above 10k is indication of strong appetite for risk, where the dollar is a short term safety haven. Gold is showing the dollar is a weak long term safety haven, and that is with little to no inflation.
Even with a bad bill, as this one surely is, I think any reaction by the market will be postitive. After all, businesses will now have a very good reason to pay the minimum in health care and pass more of the cost onto the "public option". This bill will set the minimum, which is good if you're a business with employees who have generous plans now. Another reason I think the market will react positively is the removal of huge unknown.
Please don't confuse my comments as being in favor of this bill.
This Mkt is so goofy, if the Health Care Bill passes the Senate, I say Dow 12k. If Israel bombs Iran, Dow to 15k, if Cap and Trade gets passed in both houses of Congress, Dow to 40K.
Yeah and we can use our dollars as toilet paper. It will be a nightmare in 2010, with all the increased regulation and higher taxes. Hell why try if the government will take more then 60-70 % of your income. I can't wait till helicopter Obama airlifts money to the people of Detroit.
four mouths ago, everybody was saying how bad the market was going to get because of Obama's "socialist" policies, Wow if this is bad I can't wait to see what the market looks like good. I don't usually post on sites, but you can see I've been a member for along time, and I can tell you the insurance company are going to make out like bank robberies, WHY all the new customers that have to get insurance.
for all you Obama's haters, I've been feeling like a bank robber for the last 4 months too "must be your money, I'm taking home"
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