RSAAKS

Dow Target 6,617, October 25, 2009: Here Is Why

The author states.."Let's be honest, our economy is getting worse and as far as waiting for the economy to come back, my question is "what economy?"
How do you explain existing home sales on the rise, ISM index approaching 50, etc. While I see no gangbusters economy yet, but it does not look like the whole market move is a hoax, there are some hints of recovery. Check out how the cash for clunkers is working for auto sales-what about pick up in sales of base metals...

Stocks Will Fall 37% or Gold Will Rally 60%

"throughout the 20th century, on average 5.4 ounces of gold would buy one unit of the DJIA.

Today, gold trades at $980. The DJIA trades at 8,500. This puts the ratio of gold to stocks at 8.6."

What if Gold goes to 2000 and Dow to 12,000?? With impending inflation, I think that is more likley. In other words both go up. Possible?

If You Have Short-Term Gains, Take Your Profits

We can draw all the parallels, but history seldom repeats in an exact manner in the stock market. This market is certainly due for a correction, but with all the stimulus money being pumped into the system, an inflation recovery, which raises most commodities, oil, agriculture goods etc is in the cards. This inflation will work for quite a few stocks, and eventually keep it from going back to 666 on S&P. I think corrections stops well short of March low, and we maintain 750-1000 trading range until sometime in 2010.

The Declining Usefulness of Debt

we may still be producing return on debt, a larger portion is being eaten away by increased regulations, leading to lower net

Relax, Obama's Socialist Agenda Is Capital Friendly

When people talk of our current "capitalist syatem", frankly I am not sure what they mean. The fact that we pay taxes in disproportionate amounts to the benefits we all receive from our taxes, high tax payers (aka high wage earners) already subsidize low tax payers to some extent. Hence we already are socialists to some extent. What is likely happening now---the degree of socialism is increasing--a notch higher? or a lot higher? that is the real issue. And Yes, we are are socialists already, believe it or not.

Reversion to the Mean for Equities

Before we go too far with this mean theory, I would think if this theory applies to NYSE, it should apply to the GDP vs equity value for many other economies, at least those who have had equity trading for some time. Doe this apply anywhere else, or is the US so special? What about Japan, UK?? Secondly, why is NYSE equity value the only part being considered, when many of the very meaningful companies in the US [e.g. MSFT, CSCO, ORCL, INTC, EBAY, AMZN to name a few] don't even add up in NYSE value? Does that make this new economy different from that in 1929 or 1965?

The Secular Bear Market Continues

Real question then becomes-will gold go down or dow go up to bring the two in balance. My guess- Eventually Dow goes much higher to adjust for future inflated prices of stocks and gold goes up, but not as much in relative terms-overall dollar buys less of each.

Tradermark's 13 Outlier Predictions for 2009

Difficult to find any holes in your arguments!! Though I hope things are not as bad. Seems US economy is becoming more and more like some third world economies--big deficilts-high inflataion-high unemployment-and lagging wage growth. I would add one prediction, there should be many strikes by workers for wage increases, like the teachers, govt workers leading the way.

Deflation Is Just Around the Corner

Deflation!!!! With the exception of price at the gas pump, can someone tell me which prices are lower? At least where I live, groceries are still costing more than last years, so are my utilities, so are the services like the doctor fees-auto repair-insurence, car prices are still holding the same as lastt year, tuition is not any cheaper, interest rates charged by banks are not much lower, so where is the deflation??
Oh, the stock prices are down, way down, that must be the deflation everyone is worried about!!

Letting the Reinflation Genie Out of the Bottle

For a economy-idiot like me, can someone explain why having some 20-30% inflation of prices and wages be so dreadful. If wages magically went up by, say 25%, most of the home loans and credit card loans will suddnly become payable by the consumers. And then of course prices will also go up by 25-30%, and all that has to happen is decreased future consumption and we could be OK? So in future even with 25% higher incomes, we all consume 20% less food, 20% fewer cars and fuel etc, that is the new reality any way, can the wiser crowd shed some light on inflation for us?

This Recession Will Be Anything but Deep

Even if the money going into the banks is used to retire debt, that money flows into the pockets of lenders. The only debtor who is piling up debt, is govt and everyone else, who receives the funds from debt repayment will have to buy something with the funds. ONly govt can retire debt and vaporize money, people-sovereign funds-hedge funds or any one else getting money from debt retirement gets cash. Will they put that cash in a cave for a rainy day?? Not likely, they will create the next bubble, only I don't know what bubble will be created next, since all assets have now been deflated.

Survival of the Longest

The market is not going down because of herd mentality of the baby boomers, It is the herd mentality of hedge funds and mutual funds that is causing this melt down. Unless the hedge funds are regulated like mutual funds, and there is some transparency of what the hedge funds are doing, this market is not coming back/ Individuals will surely be out at some point, whether now or in a year, if down turn persists. Going forward, funds will simply be selling to each other and will have very little individual participation directly or via funds.