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Dow Getting Very Near 13,000!  
User currently offlineAA787823 From , joined Dec 1969, posts, RR:
Posted (7 years 3 months 2 weeks 11 hours ago) and read 1178 times:

How this is awesome. I am very excited about this (plus I am making a ton of $$$$$!) Big grin
But where next. IMHO after it passes 13,000 look for about a 12-15 % correction. Time to move all the $$$ in my 401K back out after it passes 13,000

19 replies: All unread, jump to last
 
User currently offlineSlovacek747 From , joined Dec 1969, posts, RR:
Reply 1, posted (7 years 3 months 2 weeks ago) and read 1142 times:

People can bash all they want and say this and that about how the economy is not doing so well as opposed to before. Well I've got something to tell them- THE ECONOMY IS GREAT!!!

Common sense should tell all the idiots that it's not as bleak as some make it out to be when the DOW continues to rise to near 13,000 and beyond.

Slovacek747


User currently offlineAaron747 From Japan, joined Aug 2003, 8034 posts, RR: 26
Reply 2, posted (7 years 3 months 2 weeks ago) and read 1137 times:

The economy is great for Wall Street and investors like us. Calling it great in terms of export futures, trade balance, dollar integrity or long term prospects for skilled workers is a fair stretch. Knowing the difference between the two is the difference between sounding like a cheerleader giving her all for a team in the cellar or otherwise a pragmatist.


If you need someone to blame / throw a rock in the air / you'll hit someone guilty
User currently offlineAAce24 From United States of America, joined Feb 2007, 849 posts, RR: 12
Reply 3, posted (7 years 3 months 2 weeks ago) and read 1135 times:

Quoting Slovacek747 (Reply 1):
Well I've got something to tell them- THE ECONOMY IS GREAT!!!

 rotfl   rotfl 

Sorry to inform you, but the economy consists of more than the stock market.


User currently offlineMdsh00 From United States of America, joined May 2004, 4124 posts, RR: 8
Reply 4, posted (7 years 3 months 2 weeks ago) and read 1131 times:

Quoting Slovacek747 (Reply 1):
People can bash all they want and say this and that about how the economy is not doing so well as opposed to before. Well I've got something to tell them- THE ECONOMY IS GREAT!!!

Common sense should tell all the idiots that it's not as bleak as some make it out to be when the DOW continues to rise to near 13,000 and beyond

I'm not even an economist (or close to one) and I can tell you that the DJIA isn't the single determinant of the state of the economy. Of course for your type, it is when it is convinent. I bet if this were the stock market boom during Clinton's presidency, you'd be on here talking about how unreliable it is and how shaky the economy is.



"Look Lois, the two symbols of the Republican Party: an elephant, and a big fat white guy who is threatened by change."
User currently offlineItsjustme From United States of America, joined Apr 2004, 2768 posts, RR: 10
Reply 5, posted (7 years 3 months 2 weeks ago) and read 1131 times:

Quoting AAce24 (Reply 3):
Sorry to inform you, but the economy consists of more than the stock market.

 checkmark 

Tell all the laid off, jobless people in MI how great the economy is and I have a feeling you'll have your ass handed to you - in spades.


User currently offlineNWA742 From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 3 months 2 weeks ago) and read 1128 times:

Quoting AAce24 (Reply 3):
Sorry to inform you, but the economy consists of more than the stock market.

That is of course until it hits lower points and we start hearing about the "Bush economy" going down the crapper again.




-NWA742


User currently offlineAAce24 From United States of America, joined Feb 2007, 849 posts, RR: 12
Reply 7, posted (7 years 3 months 2 weeks ago) and read 1114 times:

Quoting NWA742 (Reply 7):
That is of course until it hits lower points and we start hearing about the "Bush economy" going down the crapper again.

Thats true as well, although I'm not one of those people.

I just feel the need to point out assinine comments made like the one above.  Wink


User currently offlineTZ757300 From United States of America, joined Aug 2005, 2867 posts, RR: 6
Reply 8, posted (7 years 3 months 2 weeks ago) and read 1108 times:

The DJIA just shows how well you'll be doing in your overall stocks for that time period. Doesn't show the amount of unemployed, doesnt show how much the economy is making, doesnt show how many jobs there are/were, it just doesn't show much at all.


LETS GO MOUNTAINEERS!
User currently offlineUH60FtRucker From , joined Dec 1969, posts, RR:
Reply 9, posted (7 years 3 months 1 week 6 days 23 hours ago) and read 1093 times:

Quoting AA787823 (Thread starter):
IMHO after it passes 13,000 look for about a 12-15 % correction. Time to move all the $$$ in my 401K back out after it passes 13,000

Economically speaking... I don't agree. People said this same thing with Dow 10,000, Dow 11,000 and even Dow 12,000.

A lot of ill-informed people raised the alarm that massive profit reaping would occur once these numbers were hit. But looking at the history, we see that it wasn't the case. Sure there was some minor selling, but overall the market remained steady. In fact to continued to RISE.

People who sell off just because the overall average has reached a certain number probably shouldn't be playing with stocks in the first place. A massive sell-off, in the 10-15% range you quote, will not occur unless there is reason to do so. Until negative reports appear, the industry will continue to "chug along." Eventually it will plateau for some extended period of time, until greater economic growth spurs further buying, or negative news drives stocks down.

Either way, when it hits 13,000... there will be some selling. But nothing permanent or as deep as you suggest.

Quoting Aaron747 (Reply 2):
Calling it great in terms of export futures, trade balance, dollar integrity or long term prospects for skilled workers is a fair stretch.

Expanding on a few of your issues:

Trade Balance: The knee jerk reaction of "trade deficits = Bad" has been, for the most part, proven wrong by leading economists.

If you look back over the past 50yrs in the American economy, you find that periods of widening trade deficits accompany a boom in the national economy. During periods where the trade deficit shrank (or got "better") the national economy DECLINED.

Why? Well it's complicated, but basically without a trade deficit, Americans could not import the capital we need to finance the growth needed in the national economy. Importation of goods to be sold at cheaper prices than similar goods domestically produced, typically equates into major benefits for the consumer.

But anyway, a trade deficit, is not necessarily a bad thing. However, a SPENDING deficit can very much be a bad thing. But the two should not be confused.

Dollar Integrity: The whole "Weak Dollar = Bad" is simplistic and rather ignorant.

Now I understand we're all emotional people, and we don't like to hear "weak" and "America" spoken in the same sentence... but let me lay out a logical and REASON-based argument.

trying to keeping this simple -- typically a weak dollar aids American exports, while a strong dollar hurts American consumer imports. Today's economy is healthy and it's based off a strong foundation, and really isn't showing any signs of major worry. However, we need to bring America's appetite for spending under control... and a weak dollar aids in that respect. If you can encourage greater consumption of domestic products, and slow the consumption of foreign imports, the benefits will be pasted on to the consumers.

Now the trick is... a weak dollar means foreign investors are less likely to buy US Treasury Bonds (which all relates to financing the national debt and when interest is lacking, you need to entice buyers back to the table by offering higher interest rates for their investment... which equates to a greater pay out on the dept in the long run). But the short term benefits of a weak dollar to US manufactures may offset higher prices in the long run. But it's a balancing act, and now that the US manufacturing industry is far better off than it was in 1999... we should start thinking about returning back to a Strong Dollar Policy.

HOWEVER, the real issue isn't whether we're operating under a Strong or Weak dollar policy... the #1 Issue is a BALANCED BUDGET. Federal income is a record high... the strong economy is returning a lot of money back into the federal coffers. Now is the perfect time to introduce a balance to our spending. However, that'll require gutting a lot of federal programs, which is unlikely.

SO - all of you who blame the weak dollar as the source of your problems are not going high enough on the chain. You need to blame the disgusting amount of money being spent on federal entitlement programs. You need to support Social Security Reform, Medicare reform and also support line item vetoes for spending bills.

....I know that was a lot to swallow - but I kept that VERY short. A real debate regarding dollar policy would be 10x longer.  crazy 

Quoting Itsjustme (Reply 5):
Tell all the laid off, jobless people in MI how great the economy is and I have a feeling you'll have your ass handed to you - in spades.

Yup, MI is in a recession. Heck, Detroit seems like it's been in a recession for decades!

But if that's all you've got to prove that the national economy is in the crapper... you probably should have just stayed home today!

----------------------------------------------------------

Look a lot of people are making a good point: The DJIA is not the only thermometer of the national economy. But is it definitely one of the many.

People seem to get really emotional when it comes to the economy and economics... and it's unfortunate, because it's a pretty black and white world, based on facts and logic.

And even worse! People are mixing POLITICS into this discussion. Political agendas and economic theory do not mix.

-UH60


PS: Sorry for the GIANT post.


User currently offlineFlyDeltaJets87 From , joined Dec 1969, posts, RR:
Reply 10, posted (7 years 3 months 1 week 6 days 23 hours ago) and read 1090 times:

Quoting AA787823 (Thread starter):
Time to move all the $$$ in my 401K back out after it passes 13,000

It's gonna get to 12,999.99 and then turn south.  wink 

Quoting Mdsh00 (Reply 4):
I bet if this were the stock market boom during Clinton's presidency, you'd be on here talking about how unreliable it is and how shaky the economy is.

 sarcastic  Yea, that's pretty much all this comment gets.

Quoting TZ757300 (Reply 8):
The DJIA just shows how well you'll be doing in your overall stocks for that time period. Doesn't show the amount of unemployed, doesnt show how much the economy is making, doesnt show how many jobs there are/were, it just doesn't show much at all.

But AFAIK, unemployment is still at some of the lowest percentages in the nation's recent history.

Quoting Itsjustme (Reply 5):
Tell all the laid off, jobless people in MI how great the economy is and I have a feeling you'll have your ass handed to you - in spades.

The question is though, is this a far assessment of the national economy? It's no secret the manufacturing industry is slowing down here in the US, because it's cheaper to produce those goods overseas. But other industries in the US are growing.


Overall, I think the economy is doing well. It's certainly benefiting those who invest (instead of spend 100+% of their income). Our family's investments are doing well (finally starting to get back to pre-9/11 levels). My parents just bought retirement property in Asheville, NC. My dad's company is seeing near-record quarters.


User currently offlineAirCop From , joined Dec 1969, posts, RR:
Reply 11, posted (7 years 3 months 1 week 6 days 23 hours ago) and read 1087 times:

Quoting AAce24 (Reply 3):
Sorry to inform you, but the economy consists of more than the stock market.

One of the most important parts of the economy, new housing starts, continues to do poorly. Big ticket items like appliances are selling as well, energy prices are up, and just yesterday Wall Street types were quoted that the domestic air travel will be taking a tumble. The Dow Jones really doesn't reflect the the economy as a hold, besides some of the stock's growth is coming from people investing in 401k's/IRA, the mutual fund people has to the money somewhere.

Quoting Itsjustme (Reply 5):
Tell all the laid off, jobless people in MI how great the economy is and I have a feeling you'll have your ass handed to you - in spades.

Several other states you can add to Michigan also.


User currently offlineCasInterest From United States of America, joined Feb 2005, 4510 posts, RR: 2
Reply 12, posted (7 years 3 months 1 week 6 days 23 hours ago) and read 1086 times:

Quoting Itsjustme (Reply 5):
Tell all the laid off, jobless people in MI how great the economy is and I have a feeling you'll have your ass handed to you - in spades.

That's a regional look at the economy.
Ask the traders in NYC how the economy is and they will be happy since they just got booming bonuses.



Older than I just was ,and younger than I will soo be.
User currently offlineTZ757300 From United States of America, joined Aug 2005, 2867 posts, RR: 6
Reply 13, posted (7 years 3 months 1 week 6 days 23 hours ago) and read 1082 times:

Quoting AirCop (Reply 11):
The Dow Jones really doesn't reflect the the economy as a hold, besides some of the stock's growth is coming from people investing in 401k's/IRA, the mutual fund people has to the money somewhere.

Sometimes the stock market makes me wonder, what if we had another Black Friday where everyone pulled all their assets out. Would the economy really crumble again?



LETS GO MOUNTAINEERS!
User currently offlineCaptOveur From , joined Dec 1969, posts, RR:
Reply 14, posted (7 years 3 months 1 week 6 days 20 hours ago) and read 1064 times:

Wow.. the stock markets near a record and TRS (my shitty retirement system I HAVE to pay into) can't even crack a 3% return.

When the correction hits the market its going to hurt, bad.


User currently offlineNWA742 From , joined Dec 1969, posts, RR:
Reply 15, posted (7 years 3 months 1 week 6 days 20 hours ago) and read 1059 times:

Quoting AAce24 (Reply 7):
Thats true as well, although I'm not one of those people.

That's a good thing. Those kind of people aren't able to think for themselves.  

Quoting CaptOveur (Reply 14):
When the correction hits the market its going to hurt, bad.

  

I wonder how close it is to happening.





-NWA742

[Edited 2007-04-21 08:14:59]

User currently offlineLH423 From Canada, joined Jul 1999, 6501 posts, RR: 54
Reply 16, posted (7 years 3 months 1 week 6 days 20 hours ago) and read 1056 times:

Quoting UH60FtRucker (Reply 9):
we should start thinking about returning back to a Strong Dollar Policy.

Yes please! From a purely selfish point of view, as an American living in Canada and having to pay my school fees in Canadian dollars, the dollar is now down to CDN1.08. This is KILLING me! lol I long for the days of 2002 when the dollar was at CDN1.60  Silly

LH423



« On ne voit bien qu'avec le cœur. L'essentiel est invisible pour les yeux » Antoine de Saint-Exupéry
User currently offlineAeroWesty From United States of America, joined Oct 2004, 20394 posts, RR: 62
Reply 17, posted (7 years 3 months 1 week 6 days 17 hours ago) and read 1041 times:

Quoting UH60FtRucker (Reply 9):
while a strong dollar hurts American consumer imports

Other way around. A strong dollar makes imports into the U.S. cheaper.

Quoting UH60FtRucker (Reply 9):
Now the trick is... a weak dollar means foreign investors are less likely to buy US Treasury Bonds (which all relates to financing the national debt and when interest is lacking, you need to entice buyers back to the table by offering higher interest rates for their investment... which equates to a greater pay out on the dept in the long run).

A curiosity of mine, since I used to trade bonds for a living--have you ever priced out the effect of interest rates (and how that relates to the underlying values) vs. exchange rates to prove that out? We could do that if you're interested.



International Homo of Mystery
User currently offlineUH60FtRucker From , joined Dec 1969, posts, RR:
Reply 18, posted (7 years 3 months 1 week 6 days 13 hours ago) and read 1027 times:

Quoting UH60FtRucker (Reply 9):
typically a weak dollar aids American exports, while a strong dollar hurts American consumer imports.



Quoting AeroWesty (Reply 17):
Other way around. A strong dollar makes imports into the U.S. cheaper.

You're right, I was typing too fast. I should have said, "typically a weak dollar aids American exports, while a strong dollar hurts American exports."

I got ahead of myself.

Quoting AirCop (Reply 11):
Several other states you can add to Michigan also.

Like which ones?

Quoting AirCop (Reply 11):
One of the most important parts of the economy, new housing starts, continues to do poorly. Big ticket items like appliances are selling as well, energy prices are up, and just yesterday Wall Street types were quoted that the domestic air travel will be taking a tumble.

You're right in the sense that there are many other indicators to tell us how well the economy is doing.

But the problem some people have, is for them to believe the economy is great... they want ALL of those indicators to be doing well! But that will never be the case. There will always be some entities who are prospering while others are failing. That cycle of life and death within every industry is essential. And there needs to be cycles of growth and recession that some people irrationally fear.

Housing is in a slump, manufacturing jobs are shrinking, the dollar remains to be weak. But we also have low unemployment, a steadily rising annual income number, low inflation, national economic growth appropriate for a mature economy, record profits and record federal tax incomes, and we also have strong exports and a lowering spending deficit (but will they ever get to a balanced budget!!?!?)

Overall the economy is healthy. We're not BOOMING, but we're not in the tanks like some un-informed A.netters believe.

Quoting AeroWesty (Reply 17):
A curiosity of mine, since I used to trade bonds for a living--have you ever priced out the effect of interest rates (and how that relates to the underlying values) vs. exchange rates to prove that out? We could do that if you're interested.

Interesting.

Well as interest rates increase you may eventually exceed the value of the dollar, and either neutralize or hurt exchange rates with a specified foreign money.

In other words, take a hypothetical situation of the USD vs. CAD (canada), and the exchange rate was $1.50CAD to the USD. Theoretically, if US interest rates increased, the enticements of a better USD would minimize and if it continued, the CAD and USD would reach parity. Not an actual parity in exchange rates - but an enticement parity.

But it's just a theory, and as far as I know, there is a lot of evidence that both proves and disproves this. (lol - just like a lot in economics!)

But also if you consider that exchange rates have a direct effect on how other nations utilize the dollar for FOREIGN investment. If the exchange rate is favorable, the interest rates low, theoretically you can borrow the USD at a fixed price, exchange that strong dollar into a foreign currency and then invest that money abroad.

That is a benefit of a strong dollar. But Aerowesty, I don't know if during strong USD periods, if the interest rates were low enough to entice this sort of exchange on a large basis.

But I definitely would love to keep discussing this!

-UH60


User currently offlineAeroWesty From United States of America, joined Oct 2004, 20394 posts, RR: 62
Reply 19, posted (7 years 3 months 1 week 6 days 12 hours ago) and read 1021 times:

Quoting UH60FtRucker (Reply 18):
That is a benefit of a strong dollar. But Aerowesty, I don't know if during strong USD periods, if the interest rates were low enough to entice this sort of exchange on a large basis.

Actually it's more the inverse of that. When we were at almost parity with the pound, interest rates on the long bond were in the 12% range. There's a foreign exchange effect on any cross-border transaction--the thing some derivatives and arbitrage opportunities are made of--and usually the dollar will strengthen as interest rates rise, that can lower a foreign investor's overall return. As with anything, the law of diminishing returns comes into play, and "chasing dollars" becomes fruitless.

At the moment, we're in a dangerous territory most people don't talk about. Interest rates are somewhat stable in terms of the long bond, even creaping up a bit, while the dollar continues to fall. That shouldn't be happening.

Quoting UH60FtRucker (Reply 18):
If the exchange rate is favorable, the interest rates low, theoretically you can borrow the USD at a fixed price, exchange that strong dollar into a foreign currency and then invest that money abroad.

If there was a strong dollar with low interest rates, that would be a harbinger of near total worldwide economic collapse. The two just wouldn't go hand-in-hand, unless the U.S. was the last safe haven. You get a strong dollar because people have a reason to buy dollars--usually to capture higher interest rates, but trade balances also have an effect. The only way Toyota can take profits out of the U.S., for example, is to sell dollars and buy yen. One of the reasons why the dollar is low at the moment, is that there's more selling than buying pressure on the currency.

If I hadn't been up all night, I'd be able to go into this in greater depth, but now that I know you're interested, we can pick this up later today if you'd like.  Smile



International Homo of Mystery
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