To me, the equation is very simple...
Supply and Demand
From 1995 to 2000 the market launched based on companies building networks and the internet - and productivity increasing dramatically based on the abilities of having "computerized everything".
Then we had the housing / real estate bubble in 2004 to 2007 - everyone can have a house, which created big demand for the raw materials (concrete, wood, drywall, construction jobs, etc...).
and what do we have now? a gov't spending bubble - Bernanke can't even hint a letting up on the gas and this market starts to retrace - let alone finding a way to start unwinding.
Is the US consumer increasing demand? NO. Japan? NO. Europe? NO.
China? If yes, then the Chinese gov't will tell them what they need and get it to them by hacking and stealing. The last thing the Chinese gov't will do is to massively fuel the US economy.
India? Same scenerio as China - somewhat... the goods they need will be made by them domestically and at a cheaper rate...
Brazil? Australia?? Not enough to keep fueling the fire the way our gov't thinks is needed...
Ben has only made almost all other assets somewhat worthless to own - the return on investment just isn't there - there is no rate of return.
The population has been fooled into thinking the best place to put money is into equities - for 4 years now... and now the population has again forgotten about risk of owning equities.
There just is no new, current innovation that everyone must have. You can only create false demand for so long. The reports just last week again showed the US consumer earning less, saving less, and spending more...
I think it was ironic that "The Hero" appeared on the Atlantic and that Abby J. Cohen made an appearance on CNBC last week. I remember a decade ago when an appearance by her was an ugly omen.
AI
