Stocks have lost some of the momentum that propelled the Dow Jones industrials up 61 percent from 6,547, its close on March 9, 2009. That's natural -- bull markets tend to slow down as they head into their second year. But the economic recovery has also been a bit of a drag on stocks. And so investors are waiting for signs that the economy is ready to put up some solid, sustainable growth numbers.
The media is pushing hard to doing more critical thinking for investors. The game of perceptions is so important that the current rise in stocks couldn't be anything but a bull market. Yet, hours before this headline, another newsflash suggested that it is too early to clamp down on spending just yet. In other words, this bull market is so weak that a comparison to 1936 to 1937 monetary and fiscal environment, and its "mistakes" was necessary.
White House's Romer: Too soon for spending clamp-down
The gaping U.S. budget deficit is cause for concern but clamping down on spending immediately would be "pound-foolish" and derail the recovery, a top White House economic adviser said on Tuesday.
The comparison to 1936 through 1937 was surprisingly accurate for headline rhetoric. Still no amount of spending can provide the foundation for secular economic recovery. Previous commentaries Dow 10,000 is meaningless and S&P 500 will finish 2010 poll results discuss why. The illusion created by devaluation will always be smashed by the stark reality of the consequences that result from it. You must stand with resolve through understanding or spin will wear you down, find your weakness and exploit it.
Source: finance.yahoo.com
0 comments:
Post a Comment