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Is the stock market in another bubble?

Why's it so high again? The last time the DJIA was above 14,000, the economy was flush with (fake) real estate money. Obviously that's all gone now, so what's the justification for it this time? What am I missing?

by Anonymousreply 2302/04/2013

Not a bubble. It's the start of a steady boom. Corporations and investors are sitting on trillions in cash. Productivity is high, basically squeezing more work out of fewer employees scared of being unemployed. Slowly, companies will start to hire more and more. People will have more disposable income, boosting the consumer-driven economy. As more revenue comes in and if immigration reform is passed, deficits will come down dramatically and the debt problem (to the degree it is) will fade.

by Anonymousreply 102/02/2013

Thank you President Obama!!!! My 401k is booming!!!

by Anonymousreply 202/02/2013

Getting Our Bets Down

Posted by alex_the_tired on Saturday, February 2, 2013 at 9:04 am

As we’re just coming into February, I think it’s still early enough in the year to get our bets down for the end of 2013.

Right now, the Dow Jones Industrial Average is at just about 14,000. To the usual one-move level of analysis that most of the news programs and print publications display, this means something. Golly Gee, the economy recovered! Right? What’s that? The DJIA by itself is meaningless? It’s like telling a doctor someone’s height (but nothing else) and then expecting a diagnosis of the patient’s health?

But this is how the media works all the time. A quick snapshot of one or two aspects of a significant problem, a simper to the camera, a cutaway to a video of someone on a high school sports team scoring points in a remarkable way, and then roll the end credits.

So how about this year, we get a few bets down now for review on Dec. 31, 2013. Most of us who comment on this site love to put forward our opinions. So let’s get it all down in one spot. If anyone has any theories about what the state of any particular issue will be by year’s end, put it in the comments section. I’d love to see how well we all do.

For me, I’ll make a few guesses right off the top. The DJIA at year’s end will be around 12,400. The U-2 stat for unemployment will be around 6.1%. The U-6 stat for unemployment will be at about 20%. If anyone has any other stat they want to get in, just go ahead. If there’s enough interest in this, I’ll put it all together in a table.

by Anonymousreply 302/02/2013

it's all good

by Anonymousreply 402/03/2013

All the fake money that's been shovelled into Wall St. from DC?

by Anonymousreply 502/03/2013

As a complete financial layperson this seems a little high. I think it's a mini bubble.

by Anonymousreply 602/03/2013

They're attracting more and more small investors - and crowing on Business Insider about it.

I'd buy puts in S&P futures, but I'm too busy funding my healthcare with Lotto tickets.

by Anonymousreply 702/03/2013

Corporations have a lot of cash because they don't pay taxes. Hell, I'd have a lot more if I had zero federal and state withholdings coming out of my meager paycheck. Also, their customers and grossly underpaid employees are in China and India where the new middle class is. They don't need the American people anymore. I know I don't buy as much shit as I used to so I guess somebody must be buying their crap. Also, the price of oil is almost $100 a barrel and the oil companies are always making money.

by Anonymousreply 802/03/2013

No. Corporate profits are way up and the economy, fears about Europe, Washington, etc. have been keeping the market down.

by Anonymousreply 902/03/2013

Companies are running at top efficiency these days, and high income folks are in full swing recovery, hence the high dow.

If the tax, debt and immagration issues could all be at least stabilized this year, given the housing boom, we could be in for another guilded age.

by Anonymousreply 1002/03/2013

[quote]we could be in for another guilded age

Oh boy -- I remember the last one in 2007 before the bottom fell out

by Anonymousreply 1102/03/2013

I think R1 is right.

The stock market over the long run increases in value. It's gone up and down since early 2000. 14,000 Dow is not so high.

The P:E valuations are still low, especially considering the interest rate environment. Companies are awash in cash too.

by Anonymousreply 1202/03/2013

I remember the last guilded age, too.

It was 1600, and I was in the printer's guild. I paid 6 guilders annually to be a member.

by Anonymousreply 1302/03/2013


Ha ha!

by Anonymousreply 1402/03/2013

POP! goes the Dow Jones.

by Anonymousreply 1502/04/2013

Associated Press

February 4, 2013, 2:04 p.m.

Stocks hit a big milestone, then promptly spun off the road.

Major indexes dived the most this year Monday, the first trading day after the Dow broke 14,000 and closed at its highest level since the financial crisis.

The Dow Jones industrial average dropped as much as 143 points in afternoon trading. It closed down 129.71, or 0.9 percent, at 13,880.08.

The Standard & Poor's 500 index fell 17.46 points, or 1.2 percent, to 1,495.71. The Nasdaq composite index lost 47.93, or 1.5 percent, to 3,131.17.

Monday's declines were the biggest drops this year for all three indexes. They followed a surge Friday that pushed the Dow over 14,000 for the first time since 2007, before the financial meltdown that routed world markets.

Friday was only the tenth time in its history that the Dow closed above 14,000. The first was in July 2007; the rest were in October of that year. The index closed Friday just 155 points shy of its record high, set that October.

The rally was powered by solid economic data, including a January jobs report that showed the labor market is strengthening gradually. A broad measure of manufacturing also rose sharply.

The Dow is up nearly 6 percent this year. Yet Wall Street's celebratory mood was a distant memory Monday, as U.S. stocks followed European markets lower. France's CAC-40 closed down 3 percent, Germany's DAX 2.5 percent.

by Anonymousreply 1602/04/2013

[quote]Thank you President Obama!!!! My 401k is booming!!!

Thank you President Obama!!!! My 401k is tanking!!!

by Anonymousreply 1702/04/2013

R17: You are an idiot. Your great 401k is due to reductions in labor and in benefits. Please die

by Anonymousreply 1802/04/2013

[quote]we could be in for another guilded age.

You do realize the Gilded Age was a period of abject misery for the majority of people who had to work for a living, right?

by Anonymousreply 1902/04/2013

The only bubble that draws my attention is bubble butt

by Anonymousreply 2002/04/2013

r18- communist

by Anonymousreply 2102/04/2013

It's just gas.

by Anonymousreply 2202/04/2013

It's a rigged market and the greater fool theory in action.

by Anonymousreply 2302/04/2013
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