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Why Stock Markets Are Booming

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So how can the Dow be flirting with 10,000 when consumers, who make up 70 percent of the economy, have had to cut way back on buying because they have no money? Jobs continue to disappear. One out of six Americans is either unemployed or underemployed. Homes can no longer function as piggy banks because they're worth almost a third less than they were two years ago. And for the first time in more than a decade, Americans are now having to pay down their debts and start to save.

Even more curious, how can the Dow be so far up when every business and Wall Street executive I come across tells me government is crushing the economy with its huge deficits, and its supposed "takeover" of health care, autos, housing, energy, and finance? Their anguished cries of "socialism" are almost drowning out all their cheering over the surging Dow.

The explanation is simple. The great consumer retreat from the market is being offset by government's advance into the market. Consumer debt is way down from its peak in 2006; government debt is way up. Consumer spending is down, government spending is up. Why have new housing starts begun? Because the Fed is buying up Fannie and Freddie's paper, and government-owned Fannie and Freddie are now just about the only mortgage games remaining in play.

Why are health care stocks booming? Because the government is about to expand coverage to tens of millions more Americans, and the White House has assured Big Pharma and health insurers that their profits will soar. Why are auto sales up? Because the cash-for-clunkers program has been subsidizing new car sales. Why is the financial sector surging? Because the Fed is keeping interest rates near zero, and the rest of the government is still guaranteeing any bank too big to fail will be bailed out. Why are federal contractors doing so well? Because the stimulus has kicked in.

http://globaleconomicanalysis.blogspot.com...for-senate.html

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and when does the Goverement Debt Bubble Burst? Where can it go next? Extra-terrestials anyone? Lets send the debt off-world!! :lol:

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partly right that the stimulus has kicked in but also he neglects the fact that amercian businesses have layed off so many staff that they are now very, very profitable.

wut? to be profitable, they need customers. its ONLY the stimulus doing this...as it would...

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Guest Daddy Bear
and when does the Goverement Debt Bubble Burst? Where can it go next? Extra-terrestials anyone? Lets send the debt off-world!! :lol:

no they just default through massive inflation.

Reset - start again

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wut? to be profitable, they need customers. its ONLY the stimulus doing this...as it would...

So are you saying that 100% of all business done in America now is stimulus business, the US govt is buying every US citizens food?

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no they just default through massive inflation.

Reset - start again

have you considered what a US default would actually mean.....I hope you have a good supply of water and food if you really think its going to happen some time soon.

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Tend to agree with Prechter on this kind of thing - the weird unexplainable surge happens first, and the rationalisation happens afterwards.

There is no real explanation for this boom - it's just people with nowhere better to put their money.

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Guest Daddy Bear
have you considered what a US default would actually mean.....I hope you have a good supply of water and food if you really think its going to happen some time soon.

Don't be such a drama queen blue loo.

they've been defaulting for the last 100 years

Dollar-Value.jpg

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Don't be such a drama queen blue loo.

they've been defaulting for the last 100 years

Dollar-Value.jpg

so whats different now...the dollar is worth a dollar today and 1c at todays value in 2109.....I can live with that. It makes me happy and gay.

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Why Stock Markets Are Booming,

Simple, the parasites have returned after hiding out in their deep caves counting their ill gotten gains, when the earthquake finally showed signs of potential stability they returned, as in past, the present, and will in the future. The economic problems caused by them are borne by the prudent suffering the deep shocks and taking massive punishment. ;)

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Simple, the parasites have returned after hiding out in their deep caves counting their ill gotten gains, when the earthquake finally showed signs of potential stability they returned, as in past, the present, and will in the future. The economic problems caused by them are borne by the prudent suffering the deep shocks and taking massive punishment. ;)

hey, Charlies back! hooray.

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Tend to agree with Prechter on this kind of thing - the weird unexplainable surge happens first, and the rationalisation happens afterwards.

There is no real explanation for this boom - it's just people with nowhere better to put their money.

The rationale I use is that there are enough people out there who are thinking/feeling the same as me.

I bought into a couple of long positions back in April thinking I would have a bit of fun and see if I could make a quick buck on the "bounce".

I sold my positions later in about June thinking we must be near the end of it.. but after a slight pull back the drop never came, so I bought in again to see how far it would go.

They are now back at £ values where they were before the huge contraction in late 08 so to me this seems like a natural resistance level.. however in the back of my head a little voice is telling me that the pound is now worth 25% less than it was then, so from a global view maybe this resistance level should be 25% higher and I should stay in a bit longer. Also should I factor in a possible further devaluation of the currency and keep the positions indefinately as a hedge rather than looking to sell off if they start to dip back.

All these things are swimming around in my mind, so I expect a lot of other investors are considering similar things. Hence the market is cautiously bullish, because the fear from other areas is greater.

The only prediction I will make is that I believe a lot of people are in it for the capital gains rather than the divs. If prices stop their upwards climb for a few months and then the divs don't live up to much prices could quite significantly drop as we see a flow out into areas of better return/ lower risk.

All IMHO.. and as you all know I am not a pro so don't trust a word I say.

Edited by libspero

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The rationale I use is that there are enough people out there who are thinking/feeling the same as me.

I bought into a couple of long positions back in April thinking I would have a bit of fun and see if I could make a quick buck on the "bounce".

I sold my positions later in about June thinking we must be near the end of it.. but after a slight pull back the drop never came, so I bought in again to see how far it would go.

They are now back at £ values where they were before the huge contraction in late 08 so to me this seems like a natural resistance level.. however in the back of my head a little voice is telling me that the pound is now worth 25% less than it was then, so from a global view maybe this resistance level should be 25% higher and I should stay in a bit longer. Also should I factor in a possible further devaluation of the currency and keep the positions indefinately as a hedge rather than looking to sell off if they start to dip back.

All these things are swimming around in my mind, so I expect a lot of other investors are considering similar things. Hence the market is cautiously bullish, because the fear from other areas is greater.

The only prediction I will make is that I believe a lot of people are in it for the capital gains rather than the divs. If prices stop their upwards climb for a few months and then the divs don't live up to much prices could quite significantly drop as we see a flow out into areas of better return/ lower risk.

All IMHO.. and as you all know I am not a pro so don't trust a word I say.

Well I pulled all my investments out last Friday - yes, I expect a short-term GBP devaluation, but I think the Euro is nevertheless over-priced.

My reasoning for coming off the FTSE is less to do with pricing and more to do with accessibility - I was in various funds, and didn't want to be stuck requesting encashment/transfers in the leg-down.

That's my basic philosophy at the moment - it's not so much about returns than flexibility - this will be the crucial factor over 2010-2011 IMHO.

Edited by CokeSnortingTory

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Daniel Estulin, the famed Bilderberg reporter, warned before this year's conference in May that the masters of the universe wanted to pump the stock markets one more time before deliberately crashing them. He said so afterwards too, meaning the scores of globalists in attendance okayed the plan.

http://www.corbettreport.com/articles/2009...predictions.htm

bilderbergBOOK.jpg

post-20374-1253742956_thumb.jpg

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