What ails the stock market?

TownHall.com ^ | Friday, April 18, 2003 | Alan Reynolds

[JohnHuang2]

Friday, April 18, 2003

Quote of the Day by Despiser of Democrats

[thedugal]

What ails the stock market? - I skimmed the entire article, but didn't find an answer to the question. So what does ail the stock market?

[Dataman]

Could it be excessive tax rates in a sluggish economy? Could it be the sequential defeats of any sort of stimulus package-- even a symbolic one? Could it be a $500 billion reduction in the tax cut for an $80 billion war?

I, for one, find it extremely depressing that the Republicans own the executive and legislative branches yet can't seem to get even a small tax cut through. If they can't do it, what hope is there for a tax cut ever?

[SierraWasp]

Pretty rational discourse. Asia is up due to better earnings in the US. According to http://bigcharts.marketwatch.com

[SierraWasp]

"If they can't do it, what hope is there for a tax cut ever?"

I'll drink to that!!!

[montag813]

NOTHING ails the stock market. If the S&P 500 breaks through and holds as support the 910-925 level (next week), it will be off to the races. The Nasdaq, Semis ans Biotechs are already way ahead of the pack. Lackluster earnigns greeted with massive rallies? Horrible economic data ignored and all dips bought? Look at the charts. Things are improving. The more pessimistic people are the better the outlook for stocks.

[SierraWasp]

"The more pessimistic people are the better the outlook for stocks."

I've been watching what insiders are doing on Vickers Stock Research at www.argusgroup.com and for awhile during the past few weeks they were really buying. Now that the war has slowed, they seem to be slacking off again. Is that what you mean?

[Steven W.]

People really have to pay attention ... but, then again, even Jim Cramer at first got caught watching, the most anticipated "war rally" in market history got an early start on premature news that UBL might have been captured and was already going before the war even began and continued accelleration thereafter, a move of nearly 1000 points intraday lows to highs. The breather the other day was healthy and others would be welcome and necessary to continue establishing some base off the triple bottom. People who don't liken a move of 1000 points as a rally have not learned the lessons of the 90's IMO.

[John Lenin]

When the cost of gasoline drops below $1.50 a gallon the market will take off again, thats why it's crucial to destroy OPEC, they control the world economy, when oil prices rise the markets crash.

[Steven W.]

poster is referring to contrarian reasoning on the various markets - that being the dynamics are such that when the herd is moving one way it's often a good contrarian indicator a counter-trend is likely to develop, wavering between points when the markets are over-sold (as they'd gotten right before the war) to over-bought (the point we reached, corrected once & now hover around) - a contrarian will try to avoid moving in tandem with the market sentiment and rather try and exploit buying opportunities that arise when gloom & doom pervades to the same degree the people are willing to pay unreasonable amounts for the same product, albeit commodity, equity / stock or other trading instrument.

[agincourt1415]

Hey we control 8% of the World Oil Reserves and the UN won't lift the IRAQ Sanctions.

The UN doesn't own any CARRIER BATTLE GROUPS, therefore, we (the US) can buy all the IRAQI OIL and tell the UNITED NATIONS to F#@k Off.

There are all kinds of possibilities.

[Consort]

Liberal stock brokers scaring aware timid investors. Liberal businesses laying off as many as they can.

[CyberAnt]

I think it's waiting for the tax cut!

[hove]

"I, for one, find it extremely depressing that the Republicans own the executive and legislative branches yet can't seem to get even a small tax cut through. If they can't do it, what hope is there for a tax cut ever?"

I'll let you in on a secret. Republicans in Congress...and the Executive branch... want larger government. They need taxes to run that government. But even that won't stop them. They will borrow even more money...creating a larger deficit...that gets added to the debt...that we tax payers will be obligated for the rest of lives to pay. And for what??? Our president is a Republican, and I sure don't see him reducing government. In fact, he and our Congress are on a spending spree...just take a look at the deficit numbers. You cut taxes after government spends LESS than it takes in. Our leaders...Democrat...and Republican will never...NEVER...do that...until we make them!

[Joe_October]

Because the Rats don't want it to recover. They are obstructing every attempt to improve it (both domestic and international rats).

But, it's okay, because they are doing it for the children (tm).

[Joe_October]

I'll let you in on a little secret. 51 senators is not in control of the Senate. The majority is paper thin and the rules of the Senate are set-up to make it easy to stall progress. One could argue it either way but that's the way it is.

[Mo1]

What ails the stock market? .. Wall Street that's who

They can't seem to get their heads out long enough to there is light at the end of the tunnel

I would love to move some money out of safe accounts and invest more, but I'm waiting for Wall street to chill it's nerves a bit .. they are all over the place

[Night Hides Not]

As much as I dislike the Democrat filibustering of Estrada and Owens, your post has reminded me of a key point: our forefathers set it up this way! Their attitude was that government governs best when it governs least.

What the fang-bearing Democrats don't realize is that they have now set a precedent for future confirmation of all judges. Presumably, and as early as 2004, the Democrats will return to the White House. When that happens, the next Democrat President will be equally hard pressed to get his nominees to the bench.

I think the future is bright for Republicans, and America, over the next several years. The Democrats have to defend more Senate seats in the next election. And we've discovered that the old war horses don't like being in the minority, which could lead to earlier than planned retirements.

I would caution against being over-optimistic...I remember 1992. If the economy does not turn around, the next election could be very dicey.

Back to the topic: Whither the stock market? Beats the sh*t out of me. Unlike the pundits, at least I'm willing to admit that I don't have a clue. Having said that, I just have to believe that the foundation has been set for a stronger economy: historically low interest rates, lower marginal tax rates, and the prospect for stabler and lower energy prices.

I like the way you put it, Joe: One could argue it either way but that's the way it is.

[LS]

Here is my take. While I think psychology is important (the Dow, S&P, and NASDAC have all been up since the war started), I think in today's world TECH is the driving factor, like heavy industry was the driving factor in the early 1900s.

TECH is waiting on several things to happen:

1) A legal solution to the "Napster" intellectual property questions. You say, "Well we had that." No, we had a ruling, but the SOLUTION is not yet present, and that is, how do you admit reality (that people are downloading stuff like mad) while simultaneously protecting some intellectual property? We came up with a good solution for movies and VCRs. The "content" aspect of the internet still awaits a legal solution that everyone accepts. When that occurs, there will be a new boom in content-related internet/computer functions and applications.

2) The "last mile" wiring issues also await a regulatory finality. Earlier this year, the FCC appears to have settled this. But whether or not the MARKETS accept that it is settled is, well, unsettled. Until the last mile is PROFITABLY wired, all the capability in the world in either computers (user) or the net (provider) are going to be meaningless, because there is no connection.

Think of it like this: we have super-speed "bullet trains," and we have lots of people who want to ride or ship things by train. But the bullet train stops 10 miles from your town, requiring you to either get a car, or provide other transportation to ship things to town. That somewhat negates the value of the train's speed. Further, let's say that much of the "equipment" that can be carried by the bullet train is too large to be shipped by truck the last 10 miles. Now the bullet train is nearly useless.

3) Venture capital. This is more an indicator than a cause, but VC in TECH has dried up. Sure, many were burned in the late 1990s, but there is usually money for a new idea. Not now. VC has thrived on UNPROVEN ideas. Now everyone wants a "business model" or some guaranteed profit. It won't happen---it never has. So to an extent, this, too, is psychological.

[LS]

We can always use tax cuts. But, I really don't think that is the issue here. You certainly can't argue that taxes are higher NOW than in 1995!