lowtrade

[lowtrade]

Your picking the oldest IMO rarely use index with the worst performance in the market, to make a sky is falling point. Not really fair. Since the DJT is made up of only 20 companies, which many had real money problems when gas was over $100 for 3 years. They are still trying to dig themselves out of that hole. Oil didn't start falling until mid 2014.

But the real indexes like the NAZ, S&P, & DOW industrials all are around 10 to 12% down. Correction mode.

Definitely not arguing that prolonged low oil and low fed rates shouldn't play havoc on stock prices, if they don't unwind just right. But todays market is run on computers with high freq trading now. Thus supply & demand often becomes artificially distorted by computer programs & international money management monopolies.

I mean the 2008 crash came from banks manipulating money. And oil was $100 to $130 from 2011 to mid 2014. That's 3 1/2 years. So what drastic change in supply demand occurred in the world the last 1 1/2 years to cause $30 a barrel? Everyone stop driving or switched to green energy. Did the Arab's, Russian's, US, & South Americans stop drilling? Supply & Demand, the basis for all the economic theory of the 1930's and 40's, & 50's has gone down the tube. Along with the old logic of a supply/demand market operation. Logic and standard economic realities don't seem to matter squat.

It's been my theory that now days (actually since the 1980's computer revolution) markets crash because people want them to. Not because supply vs demand is too imbalanced.

The word "market bubble" or economic bubble wasn't used until after the 1980's. Before then, bubbles were individually relative. Relating to a product or physical area. The Roaring Twenties stock-market bubble was the last 19th century all inclusive bubble until the Dotcom bubble in the 1990"s. Since computers took volume from null to billions along with unsustainable price climbs.

Check out these charts. http://stockcharts.com/freecharts/historical/marketindexes.html

IMO the proof computers and their operators now have complete control over market price. Not supply demand or excess monetary expansion which happened in the late 60's, early 70's. But going off the gold standard had something to do with that one.

You just can't expect the 3 groups of economics to actually move markets like before as much as follow the market now. Be it positive/normative, applied/rational, behavioral /mainstream economic camp. There has always been a battle between What should be and What really is. I'm in the what really is camp.

At any rate everyone that reads this should check out the chart link above and see how modern advances it technology has effected market operation. How bubbles and corrections have taken over the masses to produce a newly coined "greater fool theory" touted by behavioral economist.

Ps; NOTE: those charts are in LOG SCALE. If there was room on 1 chart for correct NO LOG; the graph would look 10 times more troubling.