Are the good times only going to last until after the next election?
2006-09-26 10:34:37 · 8 answers · asked by victorschool1 5 in Business & Finance ➔ Investing
There as been a complete disconnect from investor mentality and the news coming out of the financial sector. Think about it, the market is shrugging off bad news like it doesn't matter. When the fed raised rates in Aug, the markets rallied. The market is now rallying even though the Phila Fed said manufacturing dropped from 18.5 to -0.4. August durable goods orders are down. Housing has experienced the first year-over-year decline in prices in 11 years. Yes, new home sales in August were up 4.5%, but what investors failed to take into consideration is that the homebuilders are throwing in huge incentives to get buyers - $99,000 in free upgrades, a $10,000 vacation back, a $30,000 swimming pool, a new car. If the housing market was so great, they would need to throw in incentives. During the 5 previous years, the homebuilders didn't need incentives, they couldn't keep up with demand.
The same kind of disconnect occurred in 1929. And I do believe the markets are being manipulated for the elections. Interestingly, on July 12th, Goldman Sachs "tweaked" it's Goldman Sachs Commodity Index (GSCI). What they did was revised the unleaded gasoline componenet of the index from 8.45% to 2.30%. This caused arbs, institutional traders, hedge funds, etc. (they control billions of $$$ in assets) to sell Sept. & Oct. unleaded gasoline futures contracts to prevent any adverse affects to their existing positions. When you sell billions of $$$ of energy futures contracts, they prices will indeed drop and they certainly did. Add the fact that Paulson (who is now Treasury Secretary) was a Goldman VP and this "tweaking" occurred right in time for a drop in energy prices just before the elections smells of "market manipulation".
Also, think about this; in 2000 when the bubble popped, stock valuations were way too high. As of today (9/27/06), the Dow is within 20 points of it's all time high. If stocks were way overvalued at 11,722 and the Dow is not at 11,702, how could it be a bargain now?
Will the Dow crash anytime soon? Who knows. We could see Dow 12,000 before the end of the year. But, I personally believe the "pain" will set in again before the end of the year. There is a major down turn coming. When is anyone's guess.
2006-09-27 06:01:14 · answer #1 · answered by 4XTrader 5 · 0⤊ 0⤋
That's the problem, we will never see a market crash again since 1929. Everytime we head into a recession, everyone talks about how the market has crashed and how the world is going to end, instead of saying the market is heading into a recession. There are always going to be recessions, but people will continue to think that the worst is going to happen as long as the "experts" say there is a crash coming.
To answer your question, though, the market does seem like it is heading into a recession. However, if one were to diversify their portfolio, there shouldn't be too big of a problem and no real need to take their money out of stocks. It might also be a good idea to look at other types of investment, especially in bonds if it looks like a recession is on the horizon.
2006-09-26 10:47:59 · answer #2 · answered by bosox_75 2 · 0⤊ 0⤋
The inventory industry is going to crash because of the fact the Neoconservatives have Raped it to dying with Spontaneous era funds inpregnating shares that have not have been given any fee. The national Debt, not the generic public Debt. you be attentive to. the availability facet Statisitics is 12 trillion funds and we can blame Capitalism. Too undesirable no person had the sense to crucify Keynes as he so nicely-merited for his spewing of idiocy approximately inflation, quantitative easing and stimulus.
2016-10-01 09:45:23 · answer #3 · answered by bungay 4 · 0⤊ 0⤋
I think theres going to be some downtread but crash is a nasty word
2006-09-26 10:40:32 · answer #4 · answered by likeitis 3 · 0⤊ 0⤋
I have the same feeling. Housing bubble, weak dollar and high deficits .... people always like to hear the bullish thing but to get a more neutral stuff, you can go to "www. prudentbear.com".
2006-09-26 19:45:05 · answer #5 · answered by Yukiki 1 · 0⤊ 0⤋
Ya I think so
2006-09-26 10:35:24 · answer #6 · answered by rockinbrock2000 2 · 0⤊ 0⤋
not anytime soon. i think that it is doing pretty well.
2006-09-26 10:42:14 · answer #7 · answered by Kumari 2 · 0⤊ 0⤋
Not yet.
2006-09-26 13:38:09 · answer #8 · answered by highjumper 1 · 0⤊ 0⤋