DEMONIZING "STOCK TALK" IS D-E-A-D
TheLoneRanger100
you'll notice very few posts on Bush and the Stock Market.........How
Predictable.......
Tim Crowley
"TheLoneRanger100" <theloner...@aol.com> wrote in message
news:20020726152806...@mb-dd.aol.com...
stabaliized? you're fucking nuts.
http://finance.yahoo.com/q?s=^dji&d=c&t=1y
that's not stabilty.
TheLoneRanger100
>"TheLoneRanger100" <theloner...@aol.com> wrote in message
>news:20020726152806...@mb-dd.aol.com...
>> Yup.....Now that the Market is Stabilizing from all the DemoCommie
>"Spooking",
>> you'll notice very few posts on Bush and the Stock Market.........How
>> Predictable.......
>
>
>stabaliized? you're fucking nuts.
S-T-A-B-I-L-I-Z-I-N-G.......Can't you READ, Puke?........
Tim Crowley
I can read. The facts do not support stabilizing, stabilized, stable or
anything close to it . The FACTs support turbulent, tumultuous, crumbling,
and volatile.(btw, unlike your silly assesment these are all adjective the
business press is currently using for the stock market. I know that you
can't read, but maybe if you rub her feet you can get your Mommy to read
this to you:
http://reuters.com/news_article.jhtml;jsessionid=5MDEGJUELBYZGCRBAELCFFA?typ
e=businessnews&StoryID=1258879
'Stockalypse' Gives Sinking Feeling
July 27, 2002 07:02 AM ET
By Pierre Belec
NEW YORK (Reuters) - It's a betting game that the entire world is watching,
as Wall Street investors could determine the course of the economy in the
United States and abroad. Do they have the nerve to drive stocks up?
The stock market's plunge has flushed out more than $7 trillion in wealth
since the bubble burst in 2000 and people who got filthy rich during the
Great Bull Market of the 1990s are suddenly feeling poor. Fair to wonder
what impact this reverse wealth effect will have on consumer spending.
Back in the boom days, investing in stocks was such a huge money-making
machine that the Street viewed the market as "The Economy."
Now that stocks are crumbling, how much longer before the market shock
begins to hurt consumers who generate two-thirds of the nation's activity.
While the Dow Jones industrial average on Wednesday posted its biggest
one-day gain of the year, veteran traders warn that one-day wonders do not
signal a trend, and it's unclear that investors plan to come off the
sidelines.
TIGHTEN PURSE STRINGS
If the rope around people's necks winds tighter and they see more of their
wealth go up in smoke, the risk is that consumers may tighten their purse
strings, thereby shutting down the main engine driving the world's biggest
economy and adding to Wall Street's woes.
The risk cannot be ignored because of the public's massive participation in
the market. Nearly half of the nation's households had a stake in stocks at
the height of the bull market.
The damage is already being felt. U.S. consumer sentiment tumbled in early
July as Americans agonized over their losses. The gloom probably got worst
in the two weeks after the University of Michigan did the survey, with the
Dow tumbling more than 1,000 points.
In the 1990s, mutual funds were the financial fashion and an unparalleled
flood of cash poured into the wishing well of stock funds. But many
investors are wondering if there will always be a pot of gold at the end of
the Wall Street rainbow.
There's a big sucking sound in Manhattan's financial district. Investors are
pulling money out of U.S. stock mutual funds. In June, investors yanked
$13.8 billion out of stock funds, the third largest outflow on record,
exceeded only by $15.4 billion in March 2001 and $30 billion in September
following the attacks on the World Trade Center and the Pentagon, according
to Lipper, the mutual fund tracking firm.
401(k) BASKET CASE
Indeed, people are getting tired of losing their shirts. Their 401(k)
retirement plans have been turned into 911 emergency basket cases. The
market is on course to post a third straight yearly decline. The last time
that occurred was 1938 when investors were still reeling from the nasty
memories of the Great Depression.
The numbers speak for themselves. The Dow is down about 32 percent from its
peak, the technology-laced Nasdaq composite has fallen an eye-popping 75
percent and the Standard & Poor's 500 is down 45 percent.
The loss of stock market wealth will wreak havoc on the long-term health of
the economy, says John Challenger, chief executive officer of Challenger,
Gray & Christmas Inc., an international outplacement firm.
A growing number of older Americans are postponing their retirement or have
chosen to rein in spending because the crash has crushed their 401(k) plans.
The alternative to working more or cutting back on spending will have a big
impact on the economy, says Challenger.
"The growing population of older Americans was expected to inject large sums
of money into the economy through their mass consumption of goods and
services," he says. "These seniors were among the wealthiest ever and were
going to spend copious amounts of money in their 30-plus years of
retirement."
BEARISH FOR AVERAGE INVESTOR
There's a lot of talk the market needed to go through a healthy cleansing
after years of excesses. Analysts are preaching that the longer the bear
market hangs on, the more appealing the investment environment will be after
the fall. But the fact that stocks have kept on falling and the selling has
been so severe since June is bearish for the average investor.
More importantly, people should not expect a socko ending to this summer's
market crumble.
Stocks may bounce back but worth keeping in mind is that bear-market rallies
are tricky. Dead-cat bounces or in this case, a dead-bull recovery, are much
more dangerous than buying in a bull market because bear-market rallies can
reverse course at the drop of a dime.
The market has been rocked by an unexpected stream of bad corporate
earnings, economic uncertainty, terrorist attacks and stunning corporate
scandals. The risk premium of owning stocks has gone up, and investors have
been driven to safe havens such as bonds, money markets and gold.
The smart money is running to the bomb shelters because historically, years
of super-normal stock returns -- 20 percent plus gains in the 1990s -- have
usually been followed many years of sub-par returns.
STARVED FOR CAPITAL
As investors avoid stocks, the other risk is that companies will be starved
of capital. Lacking cash to grow, businesses may be forced to make a new
round of spending cuts that would slam the economy back into recession. A
dramatic drop in business spending was the main reason the economy slipped
into recession last year.
Business spending continues to be the wobbly wheel on a shopping cart.
Second-quarter capital spending increased for the first time in eight
quarters, but a closer look at the numbers showed the gain was caused by
companies needing to replace inventories that had dropped to depressed
levels in the past year.
The economy is still shaky and the barrage of rate cuts by the Federal
Reserve last year failed to stimulate growth across a broad sector.
There are many reasons why the rate cuts did not work. One is that the Sept.
11 attacks on the United States happened just as the first couple of
reductions were starting to filter through the economy. Since it takes six
to nine months for the Fed's stimulative easy money to do its thing, the
process was just beginning to ooze through as the airplanes hit.
Then, came the corporate scandals that drove a stake through the heart of
the market.
For the week, Nasdaq fell 4.3 percent to 1,262, the S&P rose 0.6 percent to
853 and the Dow rose 3 percent to 8,264.
(Pierre Belec is a freelance writer. Any opinions in the column are solely
those of Mr. Belec.)