Investors ponder market's troubles Stocks flounder as anniversary of rally

[RamboLiberal]

http://www.msnbc.msn.com/id/3683270/

The month of March marks the anniversary of the market’s near yearlong rally, but Wall Street is not in a party mood.

The reason for investors’ dismay: After an 11-month ascent from a multi-year low seen on March 11 last year, equity markets have spent the last four weeks essentially treading water, despite the strongest earnings season for 10 years and evidence of continued strength in the U.S. economy.

This week, as investors examine a fresh batch of economic data, including a key report on the U.S. job market, they will also be asking why stocks are floundering and what exactly is ailing them.

But most stock market observers, like Peter Dunay, chief strategist at Wall Street Access, a retail brokerage, say there isn’t one particular reason for the market’s funk. “We’re really between a rock and a hard place in the market right now,” he said.

[pansypoo53219]

1. the Bush

malaise.
simple as that.

[teryang]

2. There is a real disconnect

...between what reports say and what is happening in the labor markets. Interest rates may have pushed down some of the cost of housing and autos but that is more than made up for by price gouging on taxes, insurance, utilities and other services. That new home with the "cheap" mortgage looks good until you get the related bills. In many cases (for buyers who aren't just speculating) the monthly taxes and insurance (escrow) can equal or exceed the interest payment. That's pretty discouraging. I haven't heard that subject in conversations since the old stagflation days but I've heard it recently.

The so called interest rate benefit is going into someone else's pocket rather than freeing up income for other potential purchases. Although the monthly 6 percent CPI figure was discounted for energy and groceries, inflation is easily 6 percent for consumers, particularly families with education and medical expenses. How many believe that will go down?

Most of what I hear about the stock market is pure hype. As labor costs go down while consumer prices go up, the string is going to break. There is an Alice in Wonderland quality to economic reporting now that goes along with the other disinformation that gets put out by the government. Even some of the econopundits are openly skeptical of government reports. The political system is flagrantly broken as national state and local politicians (including democrats) are clearly not being honest in their pronouncements of what they can or will do, or else indifferent to the economic situation of working families. The lack of effective government regulation is hurting the markets and is discouraging to investors.

Greenspan simply inspires no confidence at this point. I've never seen his credibility so low. He's trying to save the BFEE, it's obvious. After november watch out for an economic earthquake as interest rates go up. The market is anticipating this.

[Voltaire99]

3. Great post, teryang (n/t)

[aquart]

4. Good analysis.

Greenspan needs to go. Yesterday.

[xchrom]

5. glad to see you include democrats

it's my hope and prayer -- that if the country can shed itself of bush -- a new political conversation can begin that includes economics.
there is far too much wealth trapped in the hands of too few. we need an honest talk about it.

[teryang]

6. I have to give credit

...to my brother who has a business background and is a tax professional for some of these observations.

Also read a report today (an excerpt from a paid service) that compensation as a percent of GDP is at its lowest level in 20 years while consumer debt is at its highest level in 20 years. The article is published by Elliot Wave International, its called The Great Train Wreck of 2004.

[Crachet2004]

7. They use false numbers to manipulate expectations...

They want to suck a bunch of small investors in so they can grab them by the ankles and shake them upside down...again.

Problem is, a lot of small investors aren't buying into it...having gotten burned by Greenspan once already, when he popped the dotcom bubble. Had he left it alone, it might not have even been a bubble! It might have worked it's way out!

Greenspan does need to go.

And we need some numbers with some credibility. These numbers alone would beat the republicans in the fall.

And how do they get by discounting the CPI for energy and groceries...don't they count? And if not why not? These two items are what most of us buy the most OF.

Counting food and fuel. I'll bet inflation is close to 20 percent...and have you checked building materials lately? 7/16 chipboard has at least tripled!

I don't know who does all these numbers I keep hearing but they can't be right.