Stop "scratching your head" I know you don't understand how you, me, and your neighbors are struggling and falling deeper and deeper in the economic abyss and yet Wall Street is just doing fabulous with corporate earning beating expectations and the Dow, S&P, and NASAQ recovering just nicely.
If your convinced now, you never will be that you and I as small insignificant investors really aren't needed to drive the averages higher. As a matter of fact we never were but just happened to be along for the ride. Corporations have eliminated all the high paying jobs now (cleansed the books) and have reduced inventories and are concentrating on profits from lower sales and pushing for higher margins. Technology has enabled institutions to effectively operate more efficiently with less people and of course is very bad news for the unemployed and the "come back" of high paying white collar jobs.
Additionally, the financial institutions have benefited from the TARP money and still aren't being asked to put a value on the "toxic assets" still on their books as our Treasury is well aware.
Short term I expect the stock market to remain in a positive mode for the next couple of quarters, but as the American Consumer becomes more frugal as their unemployment compensation and their remaining savings evaporate, I expect the "crap to hit the fan" beginning in the first quarter of 2010.
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