Indeed, Dow 16,000 does not look incipient. <Maybe only 2 years to Dow 16,000. The response to interest rates up by 4% will give us an idea of how long 16,000 will take. >
The response to low interest rates in Berserkistan was to go berserk with irrational exuberance buying over priced houses instead of the far more rational productive enterprises.
While people in USA borrowed to build houses they didn't need, of a size they didn't require, the people in China built nuclear reactors, power stations and a lot more besides that they did require.
Unfortunately for some of those people, they also went berserk bidding up Shanghai stocks from 1000 to 6000.
Despite financial carnage in the USA, the Dow and Nasdaq remain and levels which should not be considered crash-like levels though they are off their highs. Having been chastened in Y2K, shareholders were not about to race the Dow to 16,000 in such short order.
But you can bet it will get there soon enough, climbing a wall of worry as they say.
Mqurice |
