I get it. Kudlows a bull calling for DOW 5000. LOL!! Well, I was gonna say 3500, but didn't want to get run outta here as a heretic. Even with 5% YOY real growth rates (Corporate), fair value for DOW would be 6,000 (1993-present). Yet market top was 14,000. Strange?! All that money priced-in. Not even sure if Corporate growth is close to that 5% figure. Its possible if it crashed to easily go sub 5K. Probably even 3-4K.
After a 12% up day, I am not surprised that sellers came in. Maybe the fed and paulson could go on vacation for 2 weeks and let the market settle down. They can't be trying to help?
How about this... SP earnings have come down from about $94 to about $56. What if earnings drop to $30 in a recession... and the recession is long and dragged out... P/E multiples drop to maybe 10x (were 7-8x in 82) $30 earnings, 10x P/E = 300. And that's about Dow 2700... Seems not out of reach...
The economy of the US is still fundamentally strong. You guys are acting like the 11% rally last monday never happened. There is gonna be a huge short squeeze soon. Stock market almost always rallies in the last quarter anyway. Who is left to sell?
Achilles, I was expecting a retest of the lows anyway. The key will be to see if the lows of 837 hold on ES.
If the hedge funds are net short, wouldn't the redemption requests force them to cover, thereby giving the markets a lift?
government is doing too much too fast and people are necessarily getting scared from that, they've done enough, the opportunity cost of propping up the markets is getting higher and higher and each time we are getting a lower and lower marginal benefit from it. eg. The 150billion dollar bailout created more stability than the 4 trillion dollar global bailout did now. at this point i think laissez faire let everything calm down if that means dow 7000 so be it, what needs to happen will happen
Have to agree. While it's going to be painful, recourse to letting events take their course may be one of the better alts.