Kash,
Remember the market is running 6 months ahead of reality.
I think we will have a make everyone happy fiscal policy:
1. Tax breaks galore.
Are you saying that the market knew 6 months ago who would win the election? I had no idea who won as late as November 8th. At the time the market started tanking, we didn't even know for sure who would win the primaries.
We will have voodoo economics.
And the market know this.
The market dipped into 2500 to 2600 before the winner was known. Now we see 2500s again, and now suddenly it is because of Bush. I think there is something wrong with your logic (if any logic actually went into what you are saying).
Why not just look at obvious, rather than come up with far fetched theories whose only purpose is to make a political point?
The market experienced a dot.com mania, not unlike the tulip mania in Holland. The prices got way ahead of even the most rose colored perception. The money supply was spiked with excessive liquidity, Y2K related.
From this point, everything went backwards. The dot.com crashed, and along with it, excessive spending by these companies (as well as non-dot-coms). On top of that, the Fed reduced liquidity post-Y2k back to normal, the the rate hikes well under way finally trickled in, and if that was not enough, the the oil prices skyrocketed.
These forces are enough to shake a fairly valued market. Nasdaq over 5,000 was overvalued, therefore the correction is much more severe.
(None of Clinton, Bush or Gore involved in this scenario)
Joe |
