MSNBC: Soaring Stocks! Investors on buying spree shrug off falling dollar, slumping housing!

[Amerigo Vespucci]

What's driving the stock market to new highs?
Despite falling dollar, slumping housing, investors are on a buying spree

ANALYSIS
By John W. Schoen
Senior Producer
MSNBC
Updated: 3:58 p.m. PT Oct 1, 2007

With the housing market in a tailspin, some economists ratcheting up recession forecasts, and major banks reporting big losses, the stock market is on a roll, rising to record highs. How can that be?

The simple answer: Investors care less about what’s happening today than about what they expect to happen tomorrow. And, as bad as today’s headlines look, they’re not as bad as Wall Street’s worst fears at the height of the turmoil that rocked the global financial markets in August.

For weeks, Wall Street has been watching the collapse of the housing market, along with the meltdown of the mortgage market, and waiting to see just how badly banks and other financial institutions had been weakened. As more and more loans went bad, a number of smaller lenders, especially those that specialized in subprime loans, closed their doors or got snapped up by larger firms. What wasn’t clear was just how badly the biggest lenders were hit by the credit meltdown.

On Monday, a big piece of uncertainty was resolved when Citigroup warned that third-quarter earnings will probably drop by 60 percent, as the nation's biggest financial institution takes more than $3 billion in writedowns for securities backed by bad mortgages and troubled loans for corporate buyouts. Swiss bank UBS also said Monday it will post a loss of up to $690 million in the third quarter, partly due to losses linked to U.S. subprime mortgages.

http://www.msnbc.msn.com/id/21086790/

[Xipe Totec]

1. One day does not a rally make n/t

[BlooInBloo]

2. LOL! Americans just can't accept the idea that some things just aren't worth very much....

... to us, a low price means nothing more than set-up for the next rollercoaster UP.

:rofl:

[KoKo]

24. More LOL's the OP is quoting a Senior Producer at MSNBC/CNBC!

That calls for TWO!

:rofl: :rofl: and maybe a THIRD :rofl:

[annabanana]

3. How nice for them...

such profitable smoke and mirrors they trade in...

[R_M]

4. I wouldn't put money into the market right now.

[DaveJ]

5. What's driving the stock market to new highs?

Democrats. The housing market needs to collapse. The value of the American dollar needs to be adjusted. Everything's fine with the market. I'm glad to hear this. We are not accustomed to people in control who haven't run businesses into the ground. We're waking up. Expect this to continue unless BushCo causes a major disaster in its dying days.

[mmonk]

6. It didn't need to because it didn't need to be handled the way it was

in the first place (housing). Housing is where many Americans have their wealth. This is still a mismanaged economy. Housing in the past has been the stabilizer.

[DaveJ]

9. I agree that housing has been misperceived as an investment

If people want to make money, invest in a productive industry, and not just expect a return on your home, which is not some kind of chalice but an essential need of all people. That's really got to change and I'm glad it is.

[mmonk]

10. It's where everybody starting putting money

when the market wouldn't give them a return or took a tumble. I actually own rental property which can be a good investment. But this quick greed thing in the markets and in housing has a price that always has to be paid when it's correction time.

[DaveJ]

13. Property is always good.

If a major disaster hits you have the security you need. In a thriving economy the people at the bottom should be more comfortable and benefit from renting at a lower rate than buying.

[skids]

8. No, not really...

...the stock market is up for one simple reason: the dollar is down. Stocks are like everything else, they get more expensive when the dollar is down.

A year of a Dem congress has not fixed this hindenberg. This is a sucker's rally.

[DaveJ]

11. We're just getting started.

I still have faith in the American economy. We're still the most overworked indentured slavelike economy on the planet. I hate to say it but that also makes us an economic powerhouse. I know the government's finances are screwed up, but don't confuse that with our corporate performance.

[skids]

17. I wasn't talking about the government.

Our personal finances are screwed up. Our corporate finances are screwed up. And yes, the government too.

There is no need of an explanation for the stock market surge, because there really was no surge. It looks good on paper, but all it is is dollar assets that fled to inflation-proof shelters returning to the stock market to correct its price in relation to the dollar. It takes time for these things to move through the system, but that's all this is. We are not at a "new high", it's an illusion created by the reserve bank printing presses. When there's money laying in the street, it is easy to feel rich. Wait till a few trips to the grocery store after this latest correction ripples through, you'll feel a lot different.


And as far as us being an economic powerhouse that is very hard for us to do when all our manufacturing employees are now working at Cumberland Farms in the morning week and Wendy's in the evening.

[ljm2002]

12. Exactly what I was going to say...

...the dollar is down, so the "record high" is a meaningless measure if it is not adjusted to reflect the value of the dollar compared to, say, one year ago.

[DaveJ]

14. Who cares if the dollar is low? I was thinking about moving to Mexico.

If we can be more like Mexico I won't have to move. We can offer a better value to the world with our goods and services, which means more productive jobs. America does not deserve to have a high dollar, compared to other countries like Canada. But that does not mean doom and gloom economically.

[ljm2002]

15. A declining dollar is not all bad...

...as you point out -- although I do not share your rosy outlook on the economy. I was merely saying that the reporting on the "record high" in the market today was a bit disingenuous, given the recent slide in the dollar's value. Something about comparing apples to apples.

[DaveJ]

16. Thank you, good point, but I was just saying

The stock market has hit a new high, with Democrats in control, and naturally there is some way to explain it... there is always an explanation, but having an explanation does not make it bad.

[Javaman]

19. It went up on rumors of another fed cut. nt

[KharmaTrain]

21. The Global Economy

Many of the corporations in the market don't rely on strictly American markets for their revenues. In fact, the shrinking dollar is what is driving the market higher as their international revenues are worth more here than they were. The Housing market is a small part of the overall picture. However, what they're losing here, they're making up for with sales in Europe and Asia. In many cases these are people who bet against boooosh...took their money off shore and now are seeing bigger profits due to it.

[KoKo]

25. What's driving it to new highs? American Dollar in Crapper so All is CHEAP and

it means that Companies in Canada, Finnland, Saudi Arabia, Dubai, China or whoever has the money can BUY AMERICA! IT's a FIRE SALE...and that's what Wall St. Loves these days...more "Mergers and Aquisitions that were slowed by the "Equity Problem" that Helicopter Ben Bernanke has solved with dropping so much dollars that no one has ever SEEN SUCH A THING! :rofl:

[Trillo]

7. Beware The pumP

for the DUMp often follows.

[Trillo]

18. LOL!

While the market isn't yet closed, 'nother 30 mins to go, both the DJIA and NYSE are down today -- SUCKERS!

[Trillo]

26. Pump and Dump indeed.

Down again today.

[lonestarnot]

20. I'm going to laugh when the richies loose all their money.

[nadinbrzezinski]

22. Whistling past the grave... and why am I reminded of 1929?

Damn there are days...

[Stinky The Clown]

23. o/~ Don' worry ....... be happy ....... o/~