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Thread: The disconnect between wall street and the rest of the world

  1. #1
    God/dess Deogol's Avatar
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    Default The disconnect between wall street and the rest of the world

    This came out during news of an economic slow down:

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    Banned Melonie's Avatar
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    Default Re: The disconnect between wall street and the rest of the world

    ^^^ this, and many other financial news reports like it, are actually the source of major jokes on some investment boards. Bottom line is that the 'spin' imparted by mainstream financial media to the latest consumer sentiment announcements or interest rate announcements or economic activity announcements always seems to be incredibly bullish, even if today's 'spin' seems to directly contradict the 'spin' used a few months back when the announcements were moving in the opposite direction LOL. I guess that somebody is counting on the fact that Joe Sixpack has a short memory, or is too economically illiterate to connect the dots.

    slowing economic growth is now bullish
    rising interest rates are now bullish
    corporate repurchase of stock shares is now bullish
    falling 'tech' company earnings is now bullish
    an inverted yield curve is now bullish

    Of course, when a subject comes up like the incredible rise in unsold housing inventory, falling prices for houses that are being sold, escalating US trade deficits, rising personal bankruptcy rates etc. - which are virtually impossible to 'spin' in a positive light - financial media then seems to do their best to obscure the overall facts and/or minimize reporting on the subjects.

    As I am sure you already know, the 'real' forces in the US markets this week have been Fed open market ops (where newly printed dollars wound up purchasing stock shares via member banks), 'end of month' window dressing, and a lot of middle eastern petrodollars moving back to the safety of US banks and markets to avoid risk of an Israel/Hesbollah escalation. So from that 'spin' direction it would appear that escalating middle eastern conflicts are now bullish too LOL ! In fact, it's now necessary to look to non-US news media to get 'the other side of the story', i.e. --->

    ... resulting in ....


    IMHO you are entirely correct that the US markets seem to have 'disconnected' themselves from the realities of the US and world economies as well as from world events. I'm still waiting for an announcement to come out about a week before election day that Osama Bin Laden was captured, which should boost the Dow by at least 500 points !

    ~
    Last edited by Melonie; 07-29-2006 at 06:18 AM.

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    Veteran Member StuartL's Avatar
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    Default Re: The disconnect between wall street and the rest of the world

    It is always inflation figures that amaze me the most. It's as if some people really, like believe them!! Everyone seems to forget that CPI numbers are these days the 'core' of the number and that most things we all need to live on either are underweight or not represented.

    And yet, when the 'core' CPI jumps more than expected, people hardly notice. Yet if the core jumps, as we keep seeing in many major economies, the 'real' figure is probably two or three times higher.

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    Banned Melonie's Avatar
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    Default Re: The disconnect between wall street and the rest of the world

    ^^^ even more true than you mention ... don't get me started on all of the 'sleight of hand' weighting factors, seasonal adjustment, hedonic adjustments, substitutions etc. the US gov't uses to 'tweak' official inflation statistics. Of course they really don't have a choice because if the generally accepted figure of 7-8% real inflation were to be published officially, everybody from Social Security recipients to Gov't employees to union workers to TIPS bond owners would be lining up for 7-8% increases in their paychecks and benefit checks and dividend checks !

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    God/dess Deogol's Avatar
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    Default Re: The disconnect between wall street and the rest of the world

    ^^^ Only it is becoming more and more obvious there is no money to pay for it.

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    Banned Melonie's Avatar
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    Default Re: The disconnect between wall street and the rest of the world

    ^^^ the US gov't actually has all the money in the world to pay for it ... all they have to do is tell the Federal Reserve to print up a few truckloads of new greenbacks every minute LOL !

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