Why has the DOW not crashed?

[Mega]

I mean things look BLACK..............But its still over 12000?
Mega

[Ed]

Re: Why has the DOW not crashed?

At
http://www.itulip.com/forums/showthr...8070#post18070
I wrote:
A thought
Two bubbles!! We’d better let only one deflate at a time!
(please read the rest ...)

Elaboration of the foregoing is at:
http://www.itulip.com/forums/showthr...3069#post13069
Stock market price manipulation would be ‘dirty’ -- but, of what we can already see, what do we know that is ‘dirty’?

[Tulpen]

Re: Why has the DOW not crashed?

I mean things look BLACK..............But its still over 12000?
Mega

Demand for stocks is determined by mutual funds and other investment funds. These funds often have a maximum chartered cash allocation. If the market receives bad news funds sell some to expand their cash holdings, but eventually they will return and buy the same amount of stocks as before.

Only a massive withdrawal from either domestic mutual fund holders or international funds will cause a major correction.

[DemonD]

Re: Why has the DOW not crashed?

I have a theory, based upon a lot of what itulip has taught me. Simply, I believe the Fed and it's member banks are doing all they can to slow the descent of the free-fall of the markets.

There are stories of airmen who have survived free falls from great heights, the one situation I'm thinking of is of the Russian Pilot I.M. Chisov who survived by fortuitously hitting a slope:
http://www.parachutehistory.com/other/bonusday.html

Lieutenant I. M. Chisov
January 1942: Russian Lieutenant I. M. Chisov flew his Ilyushin 4 on a bitter cold day in January 1942. He was attacked by 12 German Messerschmitts.

Chisov bailed out at 21,980 ft. because he thought that was his best survival option. He free fell to escape the German fire. His plan was to open at 1000 ft.

He lost consciousness during his freefall. He landed on a steep ravine with 3 ft. of snow and plowed through the snow until coming to rest at the bottom.

He awoke 20 minutes later. He 'only' had a concussion of his spine and a fractured pelvis.

He recovered quickly and was back on duty as a flight instructor 3.5 months later.

So here is my theory: The market is just like an airman who is in free-fall. The Fed and the banks see this, but unlike someone who can only watch, what they are trying to do is furiously build a mountain slope right underneath the free-falling airman, to slow his descent, so that he "'only' has a concussion of his spine and a fractured pelvis," (similar to the analogy of laying tracks in front of a moving train).

So far, I think they are doing a good job of that. Imagine where the Dow would be if we didn't have the TAFs and huge rate cuts? Easily under 10k by now, with lots of panic selling. This is, as I see it, their attempt at having an orderly decline, and while there will be collateral damage, it will allow the markets to survive.

[WDCRob]

Re: Why has the DOW not crashed?

[Finster]Because the dollar has crashed almost as fast.[/Finster]

[blazespinnaker]

Re: Why has the DOW not crashed?

I mean things look BLACK..............But its still over 12000?
Mega

SWF. 'nuff said.

[zoog]

Re: Why has the DOW not crashed?

At
http://www.itulip.com/forums/showthr...8070#post18070
I wrote:
A thought
Two bubbles!! We’d better let only one deflate at a time!
(please read the rest ...)

Elaboration of the foregoing is at:
http://www.itulip.com/forums/showthr...3069#post13069
Stock market price manipulation would be ‘dirty’ -- but, of what we can already see, what do we know that is ‘dirty’?

[Finster]Because the dollar has crashed almost as fast.[/Finster]

From Jesse's Cafe Americain

The first chart compares the SP 500 and Michigan Consumer Sentiment. There is a pronounced divergence between the stock market and Consumer Sentiment.

The second chart adds the SP 500 as deflated by gold, which shows a remarkable coincidence with the Consumer Sentiment.

One can only wonder.

[touchring]

Re: Why has the DOW not crashed?

i agree, there's politics involved. the countries involved had interest in propping up the american consumer machine.

SWF. 'nuff said.

[Ed]

Re: Why has the DOW not crashed?

I have a theory, based upon a lot of what itulip has taught me. Simply, I believe the Fed and it's member banks are doing all they can to slow the descent of the free-fall of the markets.

DemonD,
Sounds likely right. An important part thereof is fairly stated "the public be damned".
(Related is the phrasing "the public be suckered", which I have been using for a while -- Google it.)

[grapejelly]

Re: Why has the DOW not crashed?

well in real terms the Dow hasn't gone anywhere in 8 years. And there is the reality of money to invest -- where should it go? What should people do with their US$? Buying stocks beats buying bonds...I think the equity markets are in the process of discounting recession or depression and they have already come a long way to doing so. There is unprecedented cash on the sidelines and it has to go somewhere.

This is why I posted about why the stock market is going up in 2008

[Guest]

Re: Why has the DOW not crashed?

What about this?

1. The fed is lowering rates like crazy, which usually lifts the markets temporarily

2. There is a degree of denial and "business as usual" among investors and the illusion will only be shattered after a few more quarters of bad numbers come in.

3. There are many in the financial media that are telling people things are not that bad, subprime is "contained", now is the time to buy values, etc, etc.

4. Over 12,000 is a nominal value. If inflation is soaring and the official numbers aren't showing it, then the market is actually falling quite a bit in real buying power

5. Belief that future govn't stimulus attempts will work and more are in the pipeline.

[rabot10]

Re: Why has the DOW not crashed?

well in real terms the Dow hasn't gone anywhere in 8 years. And there is the reality of money to invest -- where should it go? What should people do with their US$? Buying stocks beats buying bonds...I think the equity markets are in the process of discounting recession or depression and they have already come a long way to doing so. There is unprecedented cash on the sidelines and it has to go somewhere.

This is why I posted about why the stock market is going up in 2008

Grape I think U have it all wrong. But i have been wrong many times lol