gabe borenstein

The Market Finally Questions Justifiability of High Stock Prices

The stock market is a leading economic indicator.As such it reflects an economic status quo in the period ahead.
The correction in the past two weeks is a constructive phenomenon and reflection of a market consolidation.
Recent data was misinterpreted but not negative.
True ,the unemployment continues ti rise but it is a lagging indicator reflective of the economic past.
Auto sales have declined but not as severly as the inititial expectations reflected by the auto industry in August.
Under the pressure from some who continue to focus on gold and commodities in general, preaching inflation;the Congress and the FED reflected much too early about neutralizing some of the stimulus- a mistake.
Then again the timing of that action was not specified.
On the other hand the fiscal and the monetary policies in place will continue to assist economic expansion.
Decimation of savings and decline in the asset values in 2008 ,eliminates the risks of excess demand(in this cyclical recovery) which normally would lead to inflationary pressures.
Only in March of this year some form of an economic implosion was a consensus.
We came a long way .Unprecedented cyclical ,non inflationary expansion will continue.
What happened to all the bears at the end of 2007 when the real risks had emerged? .I had issued several warnings then.
Another decompression ? a wishful death wish that will not happen .