Thursday, May 13, 2010

Why The Stock Market Seems To Be Doing So Well While The Country Is Going To Hell In A Handbasket!!!

I was just listening to Fox News Channel and finally heard an analyst explain why the stock market is doing so well regardless of the horrible economic conditions around America and the world.

I was Googling this recently trying to find a plausible answer and nothing was jumping right out at me so I was SOOOO HAPPPYYYY to finally hear the reason in a simple explanation. Hopefully, I can explain it here as well as it was explained on Fox News Channel... with a few other highlights of my own that weren't included in the Fox News Channel report.

1) The real estate market is still in the toilet so there are not nearly as many investment dollars going into real estate right now. (My highlight)

2) Interest rates are at near zero right now so folks are not investing their money in Treasury Bills, CD's, etc., since they would lose money earning less than 2% while inflation goes up more than 2% so you would actually lose money in T-Bills right now.

3) Stock markets and economic conditions outside of the USA are in worse shape than in the USA.

4) Oil, Energy and many other commodities are in a precarious situation since many industries have no clue what Obama's taxing and spending and deficits and outrageously growing national debt and the potential Cap And Tax carbon-taxing scheme is going to do to them. (My highlight)

5) That pretty much leaves the only place where people have a chance of making a decent return on their dollar as being in America's various stock markets, especially since Obama's Administration has deemed so many companies as "Too Big To Fail" so investors expect that even if a company starts to fail, Obama will just do more deficit spending to bail them out.... so almost ALL INVESTMENTS ARE BEING MADE IN THE STOCK MARKET RIGHT NOW.

This analyst then went on to explain that eventually, and probably soon, the Federal Reserve will have to start raising interest rates and when they do, a lot of people and companies will pull money out of the stock markets and move into other investments that will start paying higher interest rates. When this happens, this analyst says the stock markets will start to decline considerably!

This all makes perfectly good sense to me and now I know what to look for as a trigger for me to make my decisions!

I just wish I would have been paying better attention to this analyst's name so I could give him credit here.

Lenny Vasbinder

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