The Stock Market Is Indicating The Recovery Has Begun-Dow Up 235 Points!

[DemocratSinceBirth]

That's cold comfort to us folks who are hanging on by a thread but it does hold out a brighter future. It's also good for President Obama and Democratic prospects. It's sad that employment is a lagging indicator and a lot of folks who worked hard and played by the rules will continue to be unemployed or underemployed.

[ixion]

1. the stock market has yet to reach 'real' value, IMO

and banks still haven't written down the real value of their assets, and the option ARM loans have yet to reset, and the real estate market has yet to bottom out.

Hence, I'm not seeing the green shoots of recovery just yet.

[DemocratSinceBirth]

3. I Don't Follow The Marklet As Closely As I Used To

What's the average P/E?

[tridim]

7. It has been replaced with "The Number"

I don't pay attention either, because stock prices have nothing to do with company performance.

[ixion]

22. I got out of the market for the most part when Bear Stearns collapsed

so I'm not following it closely these days, either. In reference to your question though: That's the trouble. We don't know for sure what the banks are worth, because they refuse to write down the value of their assets. However there is a strong argument that they're insolvent -- at least the big ones like Citi and BoA -- and this is the reason they're refusing.

As long as they're allowed to operate in this state, we're sitting on a shaky fault line. I've seen speculation as to what the 'real' value might be, it ranges anywhere from 3500 to 6500. My personal estimate is in the 5500 to 6500 range.

So it remains to be seen. The core problems have not been solved, simply salved over with borrowed money.

[rcrush]

2. Wont it just be down 400 points in a few days?

[DemocratSinceBirth]

5. Hopefully Not

Even for people who aren't invested or heavily invested the markets affect consumer psychology.


I want this economy to recover for myself, my friends, the nation, Pres. Obama and the Democratic party.

[LuckyTheDog]

4. One day is not a trend

Wake me up with the S&P 500 goes past 1,100 and stays there for a solid week.

[DemocratSinceBirth]

11. That's A Twenty Percent Move

It will take another eighteeen to twenty four months to get there.

[mix]

6. the definition of "recovery" must begin with increased and increasing employment...

every other definition favors only the wealthy and in human terms, is meaningless.
:hi:

[DemocratSinceBirth]

9. I Agree

But positive GDP growth will precede a drop in umployment and not vice versa.

[Statistical]

15. Actually jobs tend to be last.

It has been in every recovery.

Jobs losses flattening happens early but actual job increases happen last because expanding unemployment is risky and companies tend not to do it until they feel "safe".

[mix]

21. and therein is the problem with defining recovery solely by GDP growth

[DJ13]

8. Despite what the Obama economics team thinks

The stock market is NOT the economy.

Sure the pro-government "we own a stock manipulation software program" Goldman Sachs will push the markets higher based on bullshit and wishes, but when it finally dawns on the majority of traders that the companies behind the stocks they are pushing cant increase sales if no one has the money to buy their products it will collapse again.

The administration is making a huge mistake thinking they can rebuild the economy from the top down...... trickle down doesnt work.

[dolphindance]

13. The are not trying to build from the TOP down. The bank money was to stabilize.

To stop the bleeding. Not for growth.

The stimulus and tax cuts are intended to be "bottom up" measures.

And how many times has Obama made it clear he does not believe STOCK MARKET==ECONOMY.

[DJ13]

14. BS

The bank money could have come as a direct stimulus that supplanted existing consumer debt instead of just throwing money with few preconditions at them.

Instead of loaning the banks money they could have bought the consumer debt from the banks, which would not only have eased the bank's needs for money but it would have had the added benefit of easing the crisis resulting from the underlying derivatives the banks held on those loans.

The Treasury could have set up a credit clearing house to reduce the loan terms to the consumers down to or just above the Fed Funds Rate......... which would have immediately eased the lack of disposable income that is now depressing consumer spending.

The administration didnt even try to negotiate interest rate reductions (or at least a freeze) on consumer credit when the banks needed the quick infusion to remain solvent.

They didnt do a thing to try and use the bank bailouts to help the average person.

Nothing.

Why?

Because they have bought into the Larry Summers mindset that business as usual must trump solving the economic crisis.

[HiFructosePronSyrup]

17. If the Obama admin is trying to build the economy from the top...

why the billions spent to create new jobs?

"They didnt do a thing to try and use the bank bailouts to help the average person."

Ah, yes, because failing banks are so good for the average person.

[omega minimo]

10. How's the Toxic Asset Index? I heard there's a new euphemism for them?

:popcorn: It's now our "legacy"?

[Larkspur]

12. Or it's just blowing another bubble

The Stock Market has risen like this before and a few days later it sinks again. The Stock Market is the least reliable indicator because it can't distinguish between bubbles and legitimate growth. The con artists on Wall Street keep preaching its a leading indicator because they need bubbles right now and suckers to invest their money with them to get their underserved bonuses.

Since our economy transitioned from a manufacturing based one to a consumer driven one, unemployment, because it is large now, is a bigger indicator of trouble than the stock market's blips. Unemployed consumers aren't buying as much as they did before and those still with jobs are experiencing wage cuts, so they've cut back on spending. As long as our economy is a consumer driven one, the Depression will continue.

[TexasObserver]

16. Whoa, Nelly! It's a blip on the screen.

A two hundred point bump is not that significant. Until the DOW is consistently above 9000, there's not really a recovery that can be leaned on heavily. Once it becomes clear that a reliable bottom has been built, then we'll see some real recovery.

I've said all year I think it will be end of 2009, beginning of 2010, before that happens. I don't see anything today to change that notion.

[Kingofalldems]

18. Repubs and Democratic posers want the economy to fail

Bad news for them.

[Odin2005]

19. Wall Street is a giant casino with little grounding in the real economy anymore.

[On the Road]

20. Up Until a Few Days Ago,

the indexes looked like they were forming rounded tops and had started on the way down.

So the 200-point move isn't just about the size, which is not that large. It's about changing the trend and breaking the pattern that was in progress.

Fortunately, I put $5k of my rollover in QLD on Friay and it's up 12%. Wish that kind of thing were more frequent.