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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: sylvester80 who wrote (187052)	5/22/2006 6:29:40 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 281500

DOW down some 650 points in 8 trading days. Must be the great Wal-Mart based Bush economy... Hmm.... I guess you really have no idea what's going.. The DOW is touching off of PREVIOUS HIGHS and consolidating. Stocks SELDOM break through previous highs on the first attempt, so why you think any indice should be different is indicative of your utter ignorance of the markets (and certainly of Technical Analysis). But the very fact that you are ready to blame the Bush administration for the recent pull-back (sharp as it has been), BUT DENY his administration any CREDIT for 4000 point gain on the DOW within the past 3 years.. But whether it be the Clinton, or the Bush administration, only so much of that credit/blame can go to them. The REAL POWER is the Federal Reserve, and the markets impression of how they will manage money supply and interest rates. If you had paid attention to the financial analysts and Fed watchers, many of them are citing concern that the Fed might raise rates to 2000 stock bubble levels. And many of them believe that is not justified. But right now we're pausing at 5%, and I believe the Fed has sent the "signal" that if they didn't see a pull-back in the speculation in commodity prices, they might be forced to raise rates to pop that bubble. The Fed's job is to "take the punch bowl away, just as the party's getting started" and that's what is causing this consolidation. And btw, many you should pay attention to some of the global markets which have suffered FAR WORSE losses than the US. dollar crashing while housing & stock market bubbles bursting and country heading into stagflation... No different that the manner in which the stock bubble of the '90s rode upon the back of a stronger dollar and cheap 401K and pension money from the baby boomers. And guess what... commodity prices ARE CRASHING right now. Look at Gold.. Oil.. Copper and Silver.. All of them are ALSO in a bubble, because global capital is chasing the speculation and driving the prices higher in a "greater fool" play. And now many of them can't wait to "pop smoke" and bail out. And if you pay attention to the US bond markets, rather than T-Bills declining in value, they are increasing as the markets rates are driven lower in the flight for safety/quality of US government debt and the belief the Fed is trying to manufacture a minor recession to drive out the speculative economic excess. Now, I'm not pretending to speak for the Fed, but this is my opinion on it. EVEN WITH a 600 point downturn, the uptrend in the DOW has not been violated. Let us break below a DOW 10000 retest of the 200 Week MA, and THEN I'll begin to fear of a economic recession and that the Fed has overdone it (again). bigcharts.marketwatch.com And EVEN THEN, if we look at the DOW monthly chart, we see the 50 Month DA is also at 10K. bigcharts.marketwatch.com And if you note, there was a crossover of the 20 Month MA over the 50 Month MA back at the beginning of '05. That generally suggests the trend is pretty strong. But then again, we might be seeing a double top... But there's NO LOGICAL BASIS for making your inane assertions when the data does not yet justify it. And if commodities continue to cool off, then the Fed is more likely to hold off, the dollar is likely to regain some strength, and we'll "digest" the gains of the past several years. Hawk

To: sylvester80 who wrote (187052)	5/22/2006 6:30:57 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 281500

Btw, I noticed that YOU FAILED TO RESPOND to my post related to UNSC resolutions.. I guess you are learning something... You're learning to keep your mouth shut when you know you can intellectually compete. Hawk

To: sylvester80 who wrote (187052)	5/22/2006 10:50:13 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 281500

Btw, here's some more figures for you related to the decline of the DOW in comparison to other markets: India's market was down 10% today. It has fallen 20% since May 10th compared to the DOW losing less than 5% of its value. It's possible that much of the speculation in India is due to their love of everything gold (being a population with one of the largest per capita ownership of personally held physical gold jewelry). news.yahoo.com And here's something of additional interest: yahoo.reuters.com Foreign investors have poured billions of dollars into emerging markets for much of the past two years, stomaching greater risks in exchange for higher returns than those available in the United States and Europe. But now investors are leaving, worried that higher U.S. rates will siphon cash out of developing countries. Currencies across Latin America stumbled and stock markets in Brazil, Argentina, Mexico and Colombia fell over 4 percent during the day. The heightened volatility was triggered in part by the Federal Reserve's statement on May 10, which opened the door to further interest rate hikes that would curb faster inflation. And guess what higher US interest rates mean? A stronger US dollar. And a stronger US dollar means more demand for US government bonds. And when bonds get to a level where they risk an inverted yield curve (which I seem to recall might have happed temporarily in today's trading when it briefly fell below 5% on the 10 year treasury): finance.yahoo.com finance.yahoo.com newyorkfed.org The Fed funds rate is currently at 5%, which really makes it hard for banks to make money on loans, which means they will not be as ready to loan money. And the Hang Seng has gone from 17000 to 15800 in a very short period as well and will probably go lower: finance.yahoo.com And look at the Nikkei: finance.yahoo.com The interesting thing to watch will be the Shanghei markets, which tends to be more regulated with governmental meddling (as I understand it) than Hong Kong: finance.yahoo.com So overall, the bloodbath in the DOW is relatively minor (so far) compared to these overseas markets. What you seem to forget is that the US economy is still around 30% of total global GDP. So when we sneeze, they world catches a cold. When we catch a cold, the world catches economic pneumonia. Hawk