Wednesday, October 14, 2009

Here we go to Dow 10,000 again

Bubbles, bubbles everywhere....

Things look pretty rosy, but it's all in the presentation of the data.

Intel beat expectations but profit margins are getting squeezed ---- ignore reality and rally on the fact they beat expectation.

Retail sales tumbled on the expiration of Cash for Clunkers (auto sales down 10%) but ex-autos sales were up and beat expectations --- rally b/c they beat expectations.

JP Morgan is making boatloads of cash in their trading ops ---- rally b/c they are really good at assessing $25 overdraft fees.

The reality is that the dollar continues to depreciate and that forces up the prices of all other assets: gold, oil, stocks. For global corporations selling internationally, this is a beautiful scenario, but for the average man on the street it may end badly.

If and when we cross 10,000 on the Dow look for more headlines highlighting this as some sort of significant event. It's just a number, nothing more or less.

However, I was early in thinking this rally was going to fall apart, looks like were back in rally mode (at least today).

3 comments:

Anonymous said...

This is starting to piss me off. I guess we soon forget how bloated the market was in 2000 and 2007. It seems like it takes a virtual catastrophe to get people out of a market that has no relationship to reality.

The Hermit said...

When this corruption money, opps I mean stimulous package, gets moving, Dow could get to 14,000 again. Speaking of stimulous...who would ever think that Pres Obama would sign his stimulous package at the same desk that Pres Clinton got his package stimulated?
Gotta love it. Is this country great or what?

Anonymous said...

Is a ten thousand Dow, the new 14K?