Private Sector Hiring in Sept. Falls 39,000... POLL: Working-class whites shun Dems... Middle Class Slams Brakes on Spending... Food Stamp Recipients at Record 41.8 Million Americans... GOLDMAN SACHS: Economy 'fairly bad' or 'very bad' over next 6 months... New Yorkers' Income Falls for 1st Time in 70 Years... Just trying to see what the positives are that lead to the increase in the market. It makes no sense to me.
The market is up because they are betting that the FEDs will step in with QE2. This will cause more inflation and the market is up only because they are thinking of more liquidity, in other words inflation.
Tried to find it this morning, but failed. There was an article on one of the news wires about the Fed looking favorably at allowing some inflation to ease the crunch; how that would work is beyond me. Wish I'd kept it. (Might have been in the online WSJ.)
QE II is definitely priced into the market. Clyde's right - none of this is supported by fundamentals in ANY way. The market is supposed to be forward looking, and looking forward into our gloomy future probably supports P/E ratios no higher than eight. I'm reminded of what my flight instructor told me just before my first lesson: "Gravity is relentless!"
also, the dollar is down which is inflating the market as well. You need to look at volume and ask yourself how a low volume, low liquidity market is working. Forget the DOW.. watch the dollar index in comparison to the Yuan, Yen and Euro. Also watch gold too. Dollar down, gold up. We are in a currency war.. a race to debase. It's gonna get ugly.
