Bubbling the stock market... again?

[spunky]

Re: Bubbling the stock market... again?

I will repeat the question:

Is the current rise in equities another stock bubble? Homebuilder index was up 3% today... with some of the most horrendous housing news in decades. And gold is down. Is this a new bubble (through the Fed pumping money into the stock market), market manipulation, or is it more a result of M3 continuing to grow with money no where else to invest, or is it simply Mr. Market being too optimistic? Earnings from a lot of companies have been continuing their upward charge - Apple, Google, Microsoft, even the banks.

Are we seeing the beginning of a repeat of 1998, where there was a stock bubble that kept going up for 1-2 more years?

IS THIS ANOTHER STOCK MARKET BUBBLE?

sorry for the caps i just really want to know everyone's opinion.

No, I dont think so. The dollar isnt going to rally overnight, and unfortunately the BOJ didnt raise rates.

[DemonD]

Re: Bubbling the stock market... again?

My opinion is that I do not know what the markets are going to do or when?

One newsletter--The Chartist-- http://www.thechartist.com --to which I subscribe in todays edition 4/26/07 wrote



4/25/07 Alan Newman http://www.decisionpoint.com/TAC/NEWMAN.html
at the bottom of his article his chart shows that total margin debt now is higher than it was at the top in 2000, and the mutual fund cash is lower. Based on the acceleration of margin debt for the last six months ending Feb. compared to the last six months preceding the top in 2000, he points out margin debt rose 58% then, but only 29% through end of Feb.

That suggests too me that a lot more froth could yet occur.

I'm not that good at remembering the finer points of history, but this market seems to me like 1987. It seems then that the media remained in disbelief til fall that the market just kept going up and up, then it stopped.
Actually it seems that only the bears are in disbelief, but perhaps the public, whoever that actually is, is yet to capitualate and join in the fun of all these new highs, except for the Nasdaq, SOX and maybe some others.

Oh yeah "only" 29% increase in margin debt... just a fly on the windshield eh?

Is that where maybe M3 is increasing... in the margin debt of institutional investors? In that case it would be a combination of the Fed, the PPT, and market manipulators driving up stock prices.

From the looks of it, it looks like 2007 could equal either 1998 or 1987. On the one hand it's kind of frustrating looking at it, but on the other hand I've never been fully invested in the stock market in what I would consider unwary economic times (my investing career began in 2003).

Thanks for the advice.

[friendly_jacek]

Re: Bubbling the stock market... again?

Seen on another forum: "Pretty pessimistic, but unless sanity makes an unlikely appearance the glass is neither half-full nor half-empty, but instead simply overflowing with bubbles with little H20 in its base."

Great play of words and I believe leverage makes all that foam.

Like they say, sell in May and go away. May came one day early this year. IWM and FXI lead the markets (both down more than 2% today).

[DemonD]

Re: Bubbling the stock market... again?

4/25/07 Alan Newman http://www.decisionpoint.com/TAC/NEWMAN.html
at the bottom of his article his chart shows that total margin debt now is higher than it was at the top in 2000, and the mutual fund cash is lower. Based on the acceleration of margin debt for the last six months ending Feb. compared to the last six months preceding the top in 2000, he points out margin debt rose 58% then, but only 29% through end of Feb.

Jim, another thought occurred to me. Lending is tightening all over the place for housing. Wouldn't it follow that lending would tighten for pretty much any type of investment? I follow your point, but if there is a credit grind-down wouldn't that severely affect margins?

Then again on the flipside this crazy credit stuff has been going on for so long, who says that it can't go on for another 10 years? Ugh. I'm moving to panama. :P

[Jim Nickerson]

Re: Bubbling the stock market... again?

Jim, another thought occurred to me. Lending is tightening all over the place for housing. Wouldn't it follow that lending would tighten for pretty much any type of investment? I follow your point, but if there is a credit grind-down wouldn't that severely affect margins?

Then again on the flipside this crazy credit stuff has been going on for so long, who says that it can't go on for another 10 years? Ugh. I'm moving to panama. :P

DemonD,

I don't know that credit is becoming less available everywhere. Newman noted his margin debt datum from for Feb, 2007.

[DemonD]

Re: Bubbling the stock market... again?

Jeez, how freakin prescient am I here? I'm really hoping the markets take a tumble, but 2007 is shaping up to look more and more like 1998 all the time. Granted, I was not actively investing in 1998, but I look at the chart of the DJIA then and it's looking similar to 2007.

As much as a 1987 type event would be something that is probable, all the strong earnings from multi-national corporations (increased profits in dollars due to increased value of other currencies in international sales) are showing that the global economy is no where near slowing down yet despite the US housing correction.

IOW - it looks like the stock market is bubbling up again.

Now personally i did sell a healthy stake in one of my mutual funds back in march, but I'm still holding large chunks of my net worth in various individual stocks and mutual funds, so for the near term, I'm continuing to hold on them.

I still can't believe we are going to have another stock market bubble after just 7 years ago but... oh well, that seems like that's the reality nowadays. Back to a stock bubble ::sigh::

[Tet]

Re: Bubbling the stock market... again?

I still can't believe we are going to have another stock market bubble after just 7 years ago but... oh well, that seems like that's the reality nowadays. Back to a stock bubble ::sigh::

Not a whole lot of options are there? Not a whole lot of other people's money sitting in the market for Wall Street to steal from at the moment, creating something to steal from is the only thing Wall Street does. It I were Wall Street looking to steal from one of the many bubbles Wall Street creates, I can certainly see a lot of bubbles that have other people's money sitting in them to steal from. Gold looks very high on that list.