Posted on 04/18/2010 2:28:02 PM PDT by Steelfish
Stocks’ Friday Drop May Not Spell End of Rally Goldman suit unexpected, but most other market news has been priced in
By Tim Paradis
NEW YORK - Goldman Sachs & Co. reminded investors that the stock market can still go down.
The government charged the bank with civil fraud Friday and the Dow Jones industrial average fell 126 points, its biggest slide in more than two and a half months. The Goldman Sachs news gave a dose of reality to investors who were used to seeing the market climb almost relentlessly on signs of a recovering economy.
But there are signs investors are already shaking off the Securities and Exchange Commission's charges that Goldman Sachs failed to tell clients about conflicts of interest in mortgage investments it sold. Stocks ended off their lows Friday. That's a sign that investors are still making predictions that stocks will bounce higher.
(Excerpt) Read more at msnbc.msn.com ...
IF, and it is a really big IF. The SEC and the Justice Dept show evidence that they are really serious and pursue vigorously civil fraud and then criminal charges against the highest players on Wallstitution Avenue the stock market will correct to the upside.
In the words of CP30, it’s beyond my capacity
Sorry, you have to reform Congress first! They were the ones pushing Sub-Prime loans which started all this mess.
A mirror dynamic in the other direction was when the market tanked in advance of the Socialist's taking of the White House.
We will correct, though. Look for more volume...that will be an indication that we are peaking.
Yes, considering that the big money players are driving the market right now. About 10 trillion or so that use to be invested by “retail investors”, you know, the little people that lost all of their money. They will get back in very slowly and rightfully so.
If you can keep ignoring the MSM and CNBC, you may keep most of your money and not lose it again in another market crash. I think that it would be unwise to invest in the market again at this time. Still waiting for solid investment principals - and ignoring those Obama supporters that are pushing for your investment. Now your gambling instincts may vary...but be cautious...
That is certainly part of the reason... Others are that since the layoffs, companies are lean and mean with higher profits, they are consuming inventories without additional manufacturing costs, and they of course have much less costs with fewer personal, less health costs, etc.
Unfortunately, this will come to an end shortly. That will begin the question of whether they actually hire more workers or continue to attempt their lean and mean existence (with overseas manufacturing). That is when you can determine the direction of the future markets for local companies.
Unfortunately, that won’t happen for several months and along with the severe housing markets and the poor commercial market, even that may be a wash. I really doubt that improvements will be seen in employment for 2-3 years. That is going to be a major problem for both the markets and the overall economy.
Since a major part of the economy here is retail spending, it will be a major factor in the economic recovery.
It seems that people (corporations) that have money to gamble with will always be able to make good. The small investor, not so likely unless there is a 10 year boom.
Now of course, today the investment would be in foreign investment funds. That does seems to be the most profitable for the well to do also - that means that you had better watch your back. They have all the inside information and continue to outperform the small investor.
Sometimes I wonder just why I don’t invest in gold and forget about it... Geez...yea, I’m getting really pessimistic about the market...
Yes if we were in hindsight when prices were low $650 so we would see a profit. Long term at least we feel we have something tangible. Even though stocks have out performed gold. Other metals have done well and much less expensive. Copper and less glitzy metals we use every day seem more stable. Gold is volatile. All of it a crap shoot I guess.
We would come out of this much sooner if Americans were not spenders but more savers like China and Japan during their difficult financial times..our wants are far above our needs-we all are guilty.
Those "under" on their homes who have seen their interest rates higher, but are just getting by will worry about that in a couple years. They can't refi as homes are still below what is owed (Calif friend). So we have not seen the end of this mortgage problem. No end in sight.
Yes, much more subtle that you let on... One, now for the market to succeed quickly, you need most Americans to stop saving and invest - counter to what you are saying. Of course if we were already savers, we would have that same amount to invest now.
As to housing... It is much more complicated that you are saying. The situation today keeps house owner in place - no moving for jobs, lose of equity means loss of credit, etc. They can’t sell, can’t move, can’t buy, and are simply stuck in the current situation. Only those that prepared for a 2-3 year jobless situation can withstand the problems.
Most will be forced to either lose their homes and move for jobs or stay and be in poverty or barely making it depending upon their situation. Since this is a long term problem, most will eventually break (sell at a huge loss or just leave) because they simply have to for survival.
I see no short term recovery for many and that means that the market whatever it does in the short term still faces long term problems.
Which also hinges on the November elections.
If Repubs look to greatly increase their numbers, I expect companies become more confident in a longer term outlook. If tax cuts become the prevailing sentiment under a prosperity message more workers will be hired and unemployment comes down IMO.
Not to mention there’s been lots of distribution the last couple of weeks.
Good point and probably right.
Amazing how that works isn't it?!
I can see through the "demonizing", straw man, class envy and class warfare approach by the Obama administration. He is willing to blame everyone but himself or his cronies (Dodds, Frank).
And what price are we willing to pay for victory over the fat cats? Destruction of our investment banking system that has recently dodged the bullet? Is this what Obama wants? Is this best for the American people?
Rally? Are we in a rally? Maybe I’ve missed some news...
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