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touchring
10-09-07, 03:12 PM
Economy goes down -> Cut interest rate -> Stocks boom.

Now i got the impression that the worst off the US economy, the higher stocks will go!

:confused::confused::confused:

FRED
10-09-07, 03:49 PM
Economy goes down -> Cut interest rate -> Stocks boom.

Now i got the impression that the worst off the US economy, the higher stocks will go!

:confused::confused::confused:

1) If the economy tanks, the Fed cuts, economy booms, earnings rise, stocks rise.
2) If the economy tanks, the Fed cuts, inflation rises, stocks rise.
3) Fund managers are driving up prices into year end bonus territory.
4) Foreigners are buying US stocks with over-priced euros.
5) The next leg of the bull market is about to begin.

Others?

c1ue
10-09-07, 05:19 PM
The market is starting to look more like the nifty 50 era - but notably that era ended when the true extent of the economy's malaise became known.

While the stock market rising in response to negative economic news is clearly a trend, the question in my mind is when the actual economic problems will show that the optimistic assumptions underlying earnings increase expectations (and/or business cycle secular change) are in fact completely wrong.

It does seem that a large number of the external drivers (i.e. free credit from banks and/or securitization) are still down for the count.

What is remaining is the not inconsiderable pile of money still out there looking for ways to be spent.

I still remain unconvinced that at least some aspects of the bear market won't come to light - inflation or no. The inflationary phenomena still takes time to filter through, but the earnings issues will be much quicker.