No jobs, people who have jobs in fear of losing them, housing market in the toilet and about to be flushed, consumer confidence at a new low, and in an economy 2/3 driven by consumer spending with consumers NOT SPENDING, just WHO will be spending the money necessary to keep earnings up?
Companies have increased profits through cost cutting (layoffs) and increased production (again fewer employees doing more work), and have seen all of that they can see. Any further growth has to come from consumer spending and I’m not seeing any of that.
Let’s not confuse the stock market with the economy. Unless and until consumers resume spending we are going nowhere. Companies are today sitting on 1.8 TRILLION in cash. They are doing so because of uncertainty and uncertainty is what the markets hate the most.
Anyone here disagree?
No, see post 47....
Consumers are preparing to pay higher taxes in hopes of paying down national debt, to bad Congress never stops spending more than they collect.
Quantitative Easing (QE) simply put is the creation of debt to pay for debt (like interest due on existing debt). This excess debt that is/has been created looks for a decent rate of return while sitting waiting to be invested or is invested via the stock market. Can cause stock prices to rises as this debt piles into stock(s) looking for a return on investment. Unfortunately, even rising stock prices at this point in time gets you no where fast as currency’s overall worth is affected by on going debt obligations.
In other words, the markets could go on to make new highs and it wouldn’t mean much in net worth.