James >>FED needs to cut interest rates to avert a slowdown in our economy that would be translated into yet lower stock prices...<<
Not wanting to spar with you, but isn't this what the FED has been trying to do since DOW 7000's irrational exuberance? Jawboning didn't work, and it seems so many people and institutions counted on Plunge Protection Team intervention, that they trusted leveraging to the hilt, worsening the situation until we were all sure of DOW 10k. So, we wind up with "new era" valuations which personally I don't want the FED to support. Bottom line is people just got too greedy, & the money mangers got too lazy to do anything but bloat the index stocks, IMO. Index stocks have been far too rewarded in general, for their % increase in earnings growth.
I welcome a correction to the stocks that got way ahead of themselves. I just wish the brokerages media machines would come out and stop the carnage that's happening to stocks with decent earnings and book values. My point is the "whole" market doesn't need to correct. If we keep pushing a handful of index stocks to infinite valuations, we might as well de-list everything else and make sure everyone makes money on the indexed Ponzi scheme.
Just another view of the same situation,
regards,
Tom |
