Dow 10,000?

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paranoid's picture
paranoid
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Posts: 140
Dow 10,000?

So the Dow broke 10k - JP Morgan posted $3.59 billion in 3rd quarter profits! Anyone looking to short the Dow yet? I got pinched trying that earlier this year - ouch! lol

strabes's picture
strabes
Status: Diamond Member (Offline)
Joined: Feb 7 2009
Posts: 1032
Re: Dow 10,000?

I'm done trying to call it.  I'm done looking at fundamentals...and technicals for that matter.  

My only conviction is that the Elliott guys are right that the next collapse, whenever it starts, is going to be one for the record books, so I'm not willing to have any long positions now no matter how much further up the market climbs...I don't want to be caught in the downdraft.  

If folks want this thread to stick with trading discussions, stop reading my post here.  I'm past the "uncle!" point when it comes to this so I have no input to offer.  Yell

As far as what I think is driving the market, I'm starting to think the bankers/regulators have kept things propped up because the 1st phase of financial industry redesign worked so well so quickly (according to the chartalist economic school, credit growth can continue indefinitely as long as the institutions that control it want it to grow).  What worked so well?  The overall shift toward bigness/global and away from states/local/individual: 

- trillions were handed over to the bigs and they paid themselves bonuses that rivaled their boom years

- JPM Chase completed it's goal of being the primary retail banker across the entire US by getting the government to gift it WAMU

- Goldman took out some opponents

- most of the financial industry was centralized even more under the umbrella of a few banks and the NY establishment is taking over the 1 of the 3 it didn't control (BofA)

- Merrill as one of the primary non-Fed institutions was morphed into a Fed institution by being sucked up under BofA

- momentum toward global financial integration was significantly amped up (eurozone talks, SDRs, IMF power, World Bank power, BIS rule, G20 talks, reserve currency rumblings......)

- FDIC fees were used to put more pressure on small banks

- federal regulators started a phase of picking and choosing which small banks to shutdown (total BS given that EVERY bank, especially the big ones, has the same accounting problems...they're picking/choosing the ones they want to close based on private interests...Wall St people run the federal regulatory apparatus)

- some energy was put behind the effort to give the Fed more power to rule over the economy

- Obama got away with setting the precedent for economic czars, seizing private companies, firing CEOs, etc.

- federal debt levels exploded giving the money center banks a new phase of obscene profit opportunities as long as the phase lasts long enough for them to cycle the debt thoroughly

Moreover, they need to prop things up for a while to get Obama's approvals back up so he can pass their agenda...global regulation, Fed powers, healthcare control, amped up wars, carbon taxes, cap and trade, etc etc etc.  Most types of crises move presidential approvals up (terrorism, health scares, war, and other emergencies) but economic crises move them down so I doubt the next collapse will hit until the bankers see that the people aren't going to allow a portion of their agenda to be passed, then they'll create the type of fear that will make Congress rubber stamp whatever they want just like they did last fall.  

Sounds absurd.  Sure.  But to me that's a more plausible explanation for market movement than fundamental arguments which are clearly not relevant in the short/med term.  

 

idoctor's picture
idoctor
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Posts: 1731
Re: Dow 10,000?

Peter Schiff Vlog-Dow 10,000-So What

LogansRun's picture
LogansRun
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Joined: Mar 18 2009
Posts: 1443
Re: Dow 10,000?

I was at the gym yesterday looking up at cnbc and a couple of guys came and stood next to me.  They both looked at me and said "can you believe the dow is going to pass 10k again?!?"  I looked at them and started walking away laughing and waving my hand like "shoo".  Probably didn't make friends but the mentality of the "sheep" is amazing!  If they only knew.

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
Re: Dow 10,000?
strabes wrote:

Sounds absurd.  Sure.  But to me that's a more plausible explanation for market movement than fundamental arguments which are clearly not relevant in the short/med term.  

 

It doesn't sound absurd in the least.  Quite the contrary, it sounds spot on.

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
Re: Dow 10,000?
LogansRun wrote:

I was at the gym yesterday looking up at cnbc and a couple of guys came and stood next to me.  They both looked at me and said "can you believe the dow is going to pass 10k again?!?"  I looked at them and started walking away laughing and waving my hand like "shoo".  Probably didn't make friends but the mentality of the "sheep" is amazing!  If they only knew.

"But, but ... my mutual funds are going up."  That's the mentality.

I actually got asked yesterday if buying gold was legal.  And I've been told it's risky and unsafe ... by those holding most of their life''s savings in equity mutual funds ... still.  Of course, they're diversified between large, middle, and small caps and domestic and international funds, so they're safe.  Go figure.

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
Re: Dow 10,000?

Tyler Durden over at good ol' ZeroHedge pointed out recently -- as he compared the current Dow 10K to the last time the Dow passed 10K (headed upwards [March 1999 I believe]) -- that, adjusted for inflation, today's Dow 10,000 = Dow 7,700-ish in 1999 dollars.  FWIW.

The only investment I'm ahead on since September last year is my PMs.  And the funny thing is I'm not buying PMs as an investment but as a Scary Future hedge.  Listening to the voices on newsradio blather about "Whee!  Dow 10K!!" yesterday made my head spin.  Which was bad as I was driving a very small car (Yaris) between very large trucks on I-84 at the time.  [wry grin]

Viva -- Sager

plato1965's picture
plato1965
Status: Platinum Member (Offline)
Joined: Feb 18 2009
Posts: 615
Re: Dow 10,000?

 

 Ah thats the problem with measurement when the unit itself is a variable..

 1 metre = distance travelled by light in free space in 1/299,792,458 second.

 1 Kg = mass of the IPK a platinum/iridium cylinder in Sevres near Paris.

 1 $  = undefined/variable.....   need to make an International Prototype Dollar .. oh they did once .. 371.25 grains of silver.

 Dificult seeing clearly  wearing the green glasses..

 http://www.rainbowsymphonystore.com/emcidegl.html

 "won't be nothing.. you can measure anymore.." - Leonard Cohen

 

 

docmims's picture
docmims
Status: Platinum Member (Offline)
Joined: Jun 17 2009
Posts: 644
Re: Dow 10,000?

Plenty of cash in the banks from the bailouts.

 
They are closing in on a trillion dollars in "excess" reserves.  some of that money is being parked in stocks,

since they certainly can't "risk" loaning it out to actual consumers.

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