RE: RE: RE: RE: S&PI'm based in Canada. I see this as more of a global problem than American, and the thing is I don't see profits as being good either. The media likes to trumpet good or better than expected profits but really if we look at the bigger picture, then things have been in decline since 2007. Also, it is not so much a matter of good profits but less corporations taking the bad debts losses that we know are on their books (mark to mkt etc). Bad debts will trump profits imo.
If you ask most investors right now which way the stock mkt is going, they say up. However, more properly, we are still in decline from April this year in most indexes and still trending down from 2007. Even worse the mkts have basically gained nothing in 10 years. As well, in April the talk was about how we were in a V-shaped recovery. Now, the mkts are nearly at the same high as April and there is no talk about a V-shaped recovery. Amazingly everyone is totally dependant on Fed money. It's getting ridiculous.
I believe the mkt has bounced more for technical reasons since 2009, and I think that the gov't has much less control than it seems. They may even think they are in control when, in fact, they are not. Often, I see many comments from gov't and Fed officials that indicate they don't even have a good understanding of how the mkts or the economy works. For example, Bernanke had said that subprime was controlled. Greenspan said he was shocked by the 2008 meltdown. Bush said in early 2008, that it was not a "recession but a slowdown". Unemployment was not supposed to go over 8% with the stimulus plan in place according to the gov't. Biden had said April 23 2010:
Biden predicts economy will create up to 500,000 jobs a month soon
By Garance Franke-Ruta and Frank Ahrens
Vice President Biden predicted Friday at a Pennsylvania fundraiser that the U.S. economy would be adding up to 500,000 jobs each month "some time in the next couple of months."
"All in all we're going to be creating somewhere between 100[,000] and 200,000 jobs next month, I predict," Biden said, according to a pool report, adding that he "got in trouble" for a job growth prediction last month. "Even some in the White House said, 'Hey, don't get ahead of yourself.' Well, I'm here to tell you, some time in the next couple of months, we're going to be creating between 250,000 jobs a month and 500,000 jobs a month."
"We caught a lot of bad breaks on the way down," Biden added. "We're going to catch a few good breaks because of good planning on the way up."
Regardless of party they are all cheerleaders, and react to mkts rather than lead them imo.
Nevertheless I agree it is important to not underestimate the banks especially. Just when it seems they are down for the count, they can make up moves that seem impossible. Always have to respect the 20X-30X leverage they have - it can work both ways.
SC