Tuesday, November 10, 2009
The Sucker Rally Continues
Some are predicting that when the Dow hits above 10,300 that is when things will start to unravel. (It might even go a bit higher than that before it falls.)
One has to wonder why anyone would dump money back into the stock market when business outlooks continue to look very bad. Unemployment is still rising as we are in double digit territory.
Sprint Nextel is shedding 2,500 jobs by years end
Pfizer is closing 6 of its 20 research facilities.
120 banks have gone bust in 2009.
The dollar continues to lose its value as it dives to a 15 month low, and many are moving out of the stock market and into commodities like gold and silver.
Any businesses posting profits are not posting profits based on growth or increased sales... no, the "profits" are coming primarily from cutting expenses... and that includes workforce expenses. Pretty soon there won't be anything more to cut. Just look at what Goldman Sachs is up to (read the comments as well). Consumers aren't spending, and in fact they are paying down debt as well (if they can).
We have double digit unemployment - some say the 12% is really more like 17% and once we hit 20% - That my friends, is a depression. Here's one report, and another.
So what's up with a market rally?
Well - first there is whatever the Feds are doing to manipulate the market.
Second - Hey, I guess some people have money to throw away on over valued stocks with a hope that things will get better.