Just a couple of points, yes, the secular trend (that is, over a long period of decades) appears to be a global demand crisis as gov't do as you suggested...race to be the most competitive, boost exports, etc. as wages fall. That is a deflationary scenario. Why do we think the markets like this? They can watch profits rise with little worry of inflation or wage demands increasing. Such a bubble bursts eventually, though.
As for a correction tomorrow, and the bit about the market going down at the same time as interest rates declining, perhaps not a significant event. The market may be in for a breather. We'll see when that becomes a correction.
The techs, especially some larger (but newer) companies like Netscape and AOL, appear to be strong now. Profits from the blue chips could get rotated into the small caps next.
With all the money coming into the market, the BROAD trend tells me, onwards to 7,000, 8,000 and 9,000 for the Dow. If on the other hand it hits 13,000 in three years, the crash back to 6,500 will have some folks flying out the proverbial windows.
Times are bad right now for a lot of people, but not stock investors. If this is like 1929, it is more like a "global 1929", and perhaps a more gradual but equally devastating process. |
