Is the U.S. stock market rally for real? Or have stock prices gotten a little ahead of themselves? After more than eight weeks in rally mode, it certainly appears that stock prices are outpacing economic reality.
Despite the worry of a flu pandemic, a unexpectedly large contraction in US GDP and a recent prediction by the IMF that US banks’ loan losses would top $2.7 trillion, the world, as Justice Litle puts it in Taipan Daily, “is pounding the table for a V-shaped recovery.”
Gold isn’t going to $2,000 an ounce. Before you gag on your coffee or suffer chest pains, allow me to explain. We’re about eight years into the bull market, and gold has breached the $1,000 level twice and has spent weeks trading above the old high of $850.
We lay awake last night wondering if we’d made a terrible mistake warning notes readers of the coming “Great Inflation.” We know that the government is spending unprecedented sums of borrowed and printed cash to ‘fix’ the economy… the money supply as measured by M2 is shooting up (at an annualized rate of 14% over the past six months)… but the threat of deflation remains.
Back in the US of A, the feds have decided the results of the stress tests are not to be released on the May 4 deadline as promised. One is reminded of the pathetic delays of the Bush administration’s report on WMDs in Iraq. What could be so sensitive in the stress tests results that the public, who funded the tests, can’t be apprised of?
Blog traffic appears it’s a good indicator of stock market prices. According to Barry Ritholz of The Big Picture, an increase in blog traffic is a good contrarian indicator of stock prices.
The path to permanent wealth is paved with high-yielding dividend stocks and reinforced with gold. With a housing market that’s in tatters and an economy that’s reeling, most U.S. investors see the current market as perhaps the worst ever to even think about such topics as saving, investing and wealth.
The stock market is a volatile, unforgiving beast. Now more than ever. The current rally aside, it’s eating many investors’ portfolios alive – and may well do so again in the near future. The question is, though… has this hurt you or actually helped you?
“Substantial doubt,” say auditors at Deloitte & Touche. They’ve been studying GMs figures. The numbers make them wonder whether the automaker can continue as a “going concern.”
Stock prices are falling even faster than Alan Greenspan’s reputation or Warren’s Buffet’s mystique. Come to think of it, they are all falling at about the same pace. Hmmm…it’s as if they’re all one and the same.
