But the rates right now are way too low by any historical standards. Even in the 90s the average Fed Rate was 5% http://www.federalreserve.gov/RELEASES/h15/data/Monthly/H15_FF_O.txt
That's a real ignorant comment to make. Their calendar doesn't end in 2012 - something misinterpretated by people whom don't take the time to study the system, and then blown out of proportion by the media and doomsday theorists. And making updates is irrelevant to a non-linear calendar like our Greogorian Calendar. I'm not going to go into detail now, but the Mayan Calendar is nothing like our own. Is is reciprocating yet pyramidal. 2012 is the date of completion, not 'an end due to the demise of their civilzation'.
- That's a real ignorant comment to make. ~ Agree with the above ~ The interpretation of the calender may be at fault as indeed GDII would have occurred and be running rampant at this time had there not been intervention - so also the interpretation for 2012 may not include the Mayans actual prognostication....or its caviots. ~ By the way the market up 170 pts. is not looking so lame in predicting the future for the next few months.
Well we're not in a bear market thats for sure but the markets pulling back and pausing before moving up again is healthy.
Interesting graph, Bogart. It also covers a heap helluva lot of history going back into the 1950's. Yup. Fed rates are crazy crazy low right now. Virtually this whole decade has been dramatically low relative to decades before it...with rates in this decade being similar to the 1950's....albeit these post recession rates are crazzzzzy crazzzy low. Gotta go back and take a look at LIBOR versus Fed rates. Remember how LIBOR shot up last September even as the Fed Rate was so low. I wonder how often there have been crazy variances between the two as was the case last Sept. In a previous post somewhere, Bogart, you referenced how the fed rates would need to go to something like 35% to choke the money supply. Holy sh!t. Do you realize how that would totally screw so many businesses tied to the overwhelming volume of debt that is out there. It would impact every loan to every person, credit cards, mortgages, car loans, let alone all the large corporate loans that are tied to floating rates. Ugh....there is no easy way out of this dilemma. I'd friggin pay down debt if I were highly leveraged and making money in this environment. Interest rates have to go up in that they are so unbelievably low. When and how and by high much. I don't know. Bogart: btw. R U still trying to buy property or not? just curious.
interest rates can stay low for extended periods too. Japan's central bank rates have been below 0.5% for a decade now.
~ For longterm investors the above tends to repeat itself but choosing or staying with the right stocks is a part of it - as in quite a few bankruptcies later and owning one or two makes the return trip less than never happening. FairPoint (bankrupt) was one of mine, being diversified is the other shoe as plenty others on their way up. ~ Market up 203 pts closing at 10005 - again above 10000.
Are you sure it just doesn't have something to do with the stellar job the current administration is doing I find it equally interesting how the liberal media will report all the UPs and shine a positive light on those ups and lay credit with Obama for those UPs, but when things go down, and WAY down... the same line of thinking is never applied.
I'm sorry to break it to you guys but the stock market ended the week over 10,000. I know you guys would all love for the stock market to tank so you could have something else to blame on Obama... This hypocrisy of this is overwhelming. You're someone that blames every single bad thing on Obama and never gives him credit for anything. And you're calling out "liberals" for doing the opposite? (the fact that what you're saying is in no way true, is something else entirely.) On March 9 the stock market was at about 6500 points, today it's at over 10,000. That's a gain of 54%. That's an enormous gain in such a small amount of time. Enormous. You know that, right? It would be crazy to think it would keep going up at that rate (and it does seem to be stalling recently...) a modest dip is also nothing to be concerned about. This is after a drop from 13.5K in December 2007 to that 6.5K number in March 2009 that was mostly on Bush's watch. That's a loss of over 50%! And you guys are just salivating, hoping that Obama will be somewhere near the failure that Bush was so that you can say "I told you so." It's really sad. With Bush we didn't have to hope for him to fail, and nobody I know did. We just responded to his (actual, not imagined) failures. It's really like the right wing saw liberal disgust with Bush and just didn't get it. They just thought that's what you do with the opposing party's President. But that's not it at all. Bush was an absolutely massive failure of a President. It wasn't just partisan hatred. Most people were pretty much just letting things be until the whole Iraq war business. I guess what my point is: When you guys just whine and complain and throw a fit about everything it makes it seem really weak. It's better to wait until you actually have something of substance to complain about. Otherwise it really just comes off really sad and delusional.
~ Any input whether the market stays above 10000 ~ The Democrats ability to pass far reaching legislation addressing health care, the deficit while abdicating even their stance on abortion for the good of the country. ~ Unlike politics the market is driven by positive developments and will anticipate the Senate with expectation for passing the legislation....will temporarily stay above 10000. If the Senate fumbles the market will react negatively. As a short term focus on the subject.
I don't see fundamental reasons for the stock market to go up in general. If unemployment is up how in the world sales will go up? US is a consumer driven economy. People are still not confident the economy is going up, only the government tries hard to make it look like the economy is out of recession. So IMO the real value of the stock market is overpriced with at least 7-8%. IMO, in about two months we will see a correction in the market. IMO shorting is the way to go.... I did that with STEC, and made over 30% in one day. Now I am shorting MGM, I just don't see a reason for the MGM stock to logically go up. Reason: This year is worse than the previous, all the people I know who have businesses in LA say that, since most of the turist Vegas gets are from LA, the outlook for Vegas is not very bright... plus the unemployment in LA is higher than the average for US. MGM is losing money on City Center as well, they cut the condo prices by 30% and according to some analytics, that's the beginning of the price cuts. Kerkoryan one of the maijor share holders of MGM is looking to reduce his stake in MGM and sell his stocks, what does that tell you? For me it looks like MGM stock is a hot potato and there will be many years before it goes up in true value.
- ~ Suggest only the Market is in a holding pattern after mediocre earnings and churning to anticipate 6 months hence - Closing above 10000 Friday is a relief if nothing else.....As usual, disavow any knowledge of posts pertaining to the stock market.
What's Next - Minor Correction or Major Meltdown? By Simon Maierhofer On 12:33 pm EDT, Tuesday October 27, 2009 Buzz up! 62 Print It was after midnight on April 15th, 1912 when the unsinkable did the unthinkable. Built and labeled as unsinkable, the Titanic was the most advanced and largest passenger steamship of its time. Even though the Titanic's crew was aware of the fact that the waters were iceberg-infested, the ship was heading full-steam for a destination it would never reach. Being aware of danger is one thing; acting prudently for protection is another. Today, investors find themselves in an environment that is infested with symbolic icebergs. For savvy investors willing to pay attention and heed warnings, this doesn't necessarily translate into a financial shipwreck, while others might soon be reminded of the Titanic when they look at their account balance. Iceberg cluster #1: Lack of leadership Throughout the financial meltdown financials, real estate, and homebuilders fell harder and faster than broad market indexes a la S&P 500 (SNP: ^GSPC) and Dow Jones (DJI: ^DJI). Beginning with the miraculous March revival (more about that in a moment), the broad market rose while financials, real estate, and homebuilders soared. Those three sectors led the decline and led the subsequent (mock) recovery. Since it is reasonable to assume that those sectors will continue to lead the market throughout this economic cycle, it behooves investors to watch such leading sectors closely. The S&P 500 (NYSEArca: SPY - News) recorded a closing high on October 19th at 1,097. The Financial Select Sector SPDRs (NYSEArca: XLF - News) reached their closing high a few days earlier on October 15th. Since their respective closing highs, the S&P 500 has dropped 2.82%, while XLF has already shed 5.64%. A more pronounced performance slump is visible in the home builders sector. The SPDR S&P Homebuilders ETF (NYSEArca: XHB - News) peaked on September 16th and has fallen 9.97% since. Keep in mind that XHB's lackluster performance comes on the heels of the biggest monthly increase in total home sales in ten years. Even though the inventory of existing homes fell 7.5% month-over month in September (to 3.6 million units), the shadow inventory of 3.5 million foreclosed homes is probably weighing heavily on home builders. Shadow inventory represents foreclosed homes that are vacant, still included on bank's balance sheets, but have not hit the market yet. 3.5 million homes equal about 1 - 2 years worth of supply. Iceberg cluster #2: Non-confirmation in the technology sector Apple, Wall Street's new darling, reported block buster earnings and rallied over 10% to new all-time highs. Microsoft reported better than expected numbers and spiked 7.4%. Investors loved Amazon's outlook so much that they bid up the stock by over 33%. Combined, the three companies account for nearly 24% of the Nasdaq (Nasdaq: ^IXIC), yet the Nasdaq is traded lower today than before earnings season on October 14th. The same is true for the Technology Select Sector SPDRs (NYSEArca: XLK - News). If 24% of the Nasdaq's components rallied between 7 and 33%, without lifting the index, a lot of tech companies must be hurting. In fact, the Nasdaq's (Nasdaq: QQQQ - News) performance is masking the decline IBM, Intel, and many other once high-flying tech companies have seen over the past 1-2 weeks. Iceberg cluster #3: Earnings are a lagging - not leading - indicator Even though expectations were low to begin with (beating earnings forecasts was likened to an A student asked to achieve only a C), there is no arguing that this quarter's reports were much better than last quarters. Many view this as a sign that the economy had hit rock-bottom back in March. In fact, 80% of economists now believe that the recession is over (probably the same 80% that didn't see the recession coming in 2007). However, as the chart below shows, earnings per share (EPS) are directly linked to the stock market's performance at best and a lagging indicator at worst. Alcoa, one of the biggest components of the hottest sector - materials (NYSEArca: XLB - News), surprised investors with a positive third quarter. Year-to-date, however, Alcoa lost $0.75 per share. This compares to a profit of $2.95 per share in 2007. At this point, Alcoa does not even have a P/E ratio, since Alcoa has no 'E' - earnings. Considering the relationship between stocks and earnings, it would be interesting to know what caused the March bottom. Throughout February and March, Wall Street was covered by a veil of uncertainty and worry that the country would slip into another depression. Ever since the Great Depression, there've never been as many articles referring to the Great Depression as in March. It is exactly that kind of pessimism that foreshadows market bottoms of some significance. Such pessimism rids the market of weak stock holders and opens the door for buyers to bid up prices. That's exactly what the ETF Profit Strategy Newsletter predicted via the March 2nd Trend Change Alert. Below is a brief excerpt taken from the Trend Change Alert: 'A multi-month rally, the biggest rally since the October 2007 all-time highs, should lift the indexes by some 30-40%. Tuesday's (2-23-09) 4% spike may be an indication of the initial intensity of the rally. Beaten down sectors like financials (NYSEArca: VFH - News), industrials (NYSEArca: XLI - News), materials (NYSEArca: IYM - News) and consumer discretionaries (NYSEArca: XLY - News) are likely to see the biggest percentage gains over the next few months.' Many of the recommended ETFs gained triple digits in the upcoming months. This rise in stock prices and consumer sentiment, along with serious cost-cutting by publicly held corporations, shrank corporate losses and even created profits for some corporations. But once again, it was rising stock prices that resulted in better than expected profits, not vice verse. Iceberg cluster #4: No demand for products It seems like companies have boosted their production. The key question is whether this uptick is merely due to an effort to restock inventories, or actual demand by the consumer. Fortunately for investors, there's an easy way to find out. If there is real demand by consumers, it will be reflected by shipping and transport companies. Products in demand need to be shipped from the manufacturer to the consumer or wholesaler. A look at the transportation/shipping sector providers, therefore, an easy and logical answer. UPS shipments fell for the sevenths consecutive quarter. UPS' profits fell 43% year over year due to lower demand for packaged deliveries. Burlington Northern, the biggest component of the Dow Jones Transportation Average (NYSEArca: IYT - News), reported that its freight revenue dropped 27% year over year. This is exactly the opposite of what you'd expect to happen in a new, sound bull market. Iceberg cluster #5: (Over) valuation Would you buy the Dow Jones at 10,000? It probably depends on where you see the Dow trade a week, a month, or a year from today. Many investors and Wall Street gurus are advocating to buy the Dow at current levels. Let me ask you this: Did you buy the Dow at 7,000? If you didn't buy the Dow a few months ago at 7,000, why would you buy it today at 10,000? Today's Dow is 50% more expensive than it was seven months ago, yet more people are willing to buy now than in March. Aside from the stock market, there is no other 'salesman' able to sell a product for a 50% premium.Bait-and switch at its finest How can the stock market get away with this? The only difference between March 2009 and today is perception. Even though it defies logic, stocks are perceived to be a better deal today than in March. Imagine what will happen when the perception changes. Once investors start believing that they can buy stocks later at a lower price they will wait, buyers will dry up, and stocks will plummet. It's no stretch to expect lower prices. Even though prices have come off multi-decade lows, earnings are lower than any other time since the Great Depression. The S&P 500's P/E ratio (stock price divided by annual earnings), based on actual reported earnings have sky-rocketed to all-time highs. Anybody buying the S&P 500 at current prices is paying 138 times as much as reported earnings. In other words, based on this year's earnings, it would take 138 years of profits to repay your investment. Would you buy a Subway franchise at 138 times its annual profit if you knew that 15 - 20 is the historical average? 15 - 20 is the average P/E ratio over the past 100 years. Anybody buying now will have to be prepared for significantly lower prices. Some things never change History teaches us that overvalued markets can't last forever. History also teaches us how far the market will have to drop to reach fair values. The bear markets of the 1930s, 1940s, 1950s, 1970s and 1980s have provided us with a valuation reset template. Every bear market bottom has seen P/E ratios drop to historically low levels. Investors, however, don't have to rely on P/E ratios alone. Dividend yields, mutual fund cash levels, and the Dow measured in the only true currency - gold (NYSEArca: GLD - News) provide another window into the future - a nearly fail-proof composite indictor. The October issue of the ETF Profit Strategy Newsletter plots the historic performance of the stock market against P/E ratios, dividend yields, mutual fund cash reserves, and the Dow measured in gold, along with target levels for the ultimate market bottom. A picture paints a thousand words and those charts speak volumes about the market's future. Did you know that the Titanic received an iceberg warning less than two hours before an iceberg brushed the ship's starboard side, buckling the hull in several places? An angry communications officer responded: 'Shut up, shut up, I am busy; I am working.' There are plenty of indicators warning investors today. Will you heed the warning and avoid financial shipwreck?
It kinda has already... Anyway, if you are gonna use the stock market as a metric to gauge Obama's success, then you will also have to use it to measure his failure. From what I've seen so far, it all points to MISERABLE FAILURE!!!
~ The miserable failure is the lazefair Republican philosophy than a well managed market dictated by 'equal opportunity' than returns with or without success for top tier executives and k-street Republican lobbyist. ~ Market up 140.pts. at midday - Conservatives need chose some other whipping post than an accelerating market....
So when it drops 250 or more again this Friday (due to the sell off) like it did last week, will you are any other liberal media outlet be touting that milestone as well?
Ahhhh lazefair, that must be a clever way of saying laissez-faire, a philosophy which does not or has not ever existed in America. But I don't expect you to know anything about history or economics, you sound pretty limited already by mentioning k-street republican lobbyists.
~ No wonder I could not find the proper spelling, thanks. ~ I believe the non-regulated securities industry gave it a pretty good shot this last go around and there has never been to few applicants at the ready for its rewards.
~ Dow up 203 pts. to 10226, seeing a bright future for now.....DPPM (disavow posts pertaining to the market) - non-regulated securities industry: Brokerage firms functioning as banks i.e. Merrill Lynch, etc.