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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (102260)	9/20/2009 7:47:08 PM
From: Wyätt Gwyön	4 Recommendations Read Replies (1) \| Respond to of 116555

6,850 was fair value for the Dow 30. When the stock market fell below that level it created a lot of buying in a normal world this level would not create buying; it would be an equilibrium level and the DOWn spend as much time below as above "fair value". but we live in a fantasy world, where people live beyond their means. perversely, this increases demand for equities. people realize they cannot hope to retire on a 3% bond coupon (regardless of what happens on the inflation front). the only way they can hope to retire is to "bet it all on black" and hope they win. this is true not just for individuals, but also for most institutional investors. all the benefits promised to your retired policemen, firemen, and teachers cannot be delivered unless the DOWn goes to 15,000 immediately and then proceeds to gain 11% per year till the end of time (or the end of our civilization, which will no doubt come much sooner). propaganda vehicles like CNBC perform an important social function in normalizing this delusion.