I will give you GE and Yahoo and all the other Christmas tree lights that blink off and on, but the fundamental truth is what drove the Dow up was massive investment in the tech sector, and phony accounting. All of this was warned about and all the warning were ignored. (Levitt, SEC retiree) The fact is the Emperor Dow has no clothes and his Christmas tree is on fire.
Dow 11,000 was based on increased everything and Yahoo making 2 dollars a share, not 5 cents. Fact is companies like Yahoo will someday go tits up and so will many internet carriers. Even the cable TV companies operate at a loss mostly and they have a good economic model compared to the internet.
Once you had 1000 companies that were making their numbers and outmaking their numbers and 300 dollar tech stocks that cannot sell a computer now to save their lives. And Compaq and HP in a marriage of misery. Once Goliaths of networking, defeated by David Chow's cheapo PC.
So you have one stock with its finger in the dyke. But in fact the whole sorry mess is going to get swept away by the flood tide of a return to normalcy. And as I see it, 'Merickan bizness has not fundamentally expanded since 1987 and that is about where the Dow is headed. Everything else is money flood. And when money floods out, it will be bye-bye, Dow peak and hello Dow trough.
All we will need next year is a few urban revolutions, crop failure, massive strikes and layoffs and a couple of huge hurricanes and floods to round out the picture.
Things go peristaltically through the intestine of the economy. We have to wait for another Tech bulge before being expelled into the sewage of economic bliss.
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