Wall Street - S&P 500 at 1080, the 'Suckers' win big.

[denem]

Rush Limbaugh got a lot of stick for wanting Obama to fail. At DU, there's a lust to have the financial system fail - to teach the bastards a lesson, then slap 'em in jail. Never mind 401k's or whatever, the rotten core of greed should be stripped naked.

As TARP funds are being paid back, plus interest, rallies are still by definition 'Sucker Rallies'. Well, with the S&P 500 at 1085, the suckers are doing pretty well:

Technical analysts eye 50% retracement for S&P 500

BOSTON (MarketWatch) -- Although many investors and media outlets are waiting with bated breath for the Dow Jones Industrial Average to break above the key psychological level of 10,000, technical analysts seem more preoccupied with the S&P 500 poised to make a so-called 50% retracement to the index's all-time high. (snip)

The 50% retracement level of 1,121 is the midpoint between the S&P 500's all-time high of 1,576 in October 2007, and the bear-market low of about 666 in early March.(snip)

The S&P 500's rise on Wednesday pushed the index to a 60% gain since the March 9 low, one of the sharpest rallies in history.

"The U.S. equity market's advance continues to befuddle those who are waiting for a sizeable price decline before putting their money back to work," said Sam Stovall, chief investment strategist at Standard & Poor's Equity Research.http://www.marketwatch.com/story/traders-mark-50-retracement-for-sp-500-2009-10-14

"A 60% gain on (general equities) since the March 9 low, one of the sharpest rallies in history": Not bad, not bad at all.

[TexasObserver]

1. "At DU, there's a lust to have the financial system fail"

Unfortunately, that's true. I'm sure some of them are sincere progressives. Anyone who never has anything good to say about the economy under Obama is someone whose judgment and bona fides should be suspected.

[1percenter]

2. What economy?

What "economy?" We don't make anything anymore. The economics class I took 25 years ago didn't deal w/ economies that didn't produce anything. We would still seem to be in uncharted waters despite this comeback in the markets.

[cliffordu]

5. Welcome to DU, and you are exactly right.

We cannot support the entire nation on 'financial instruments' and three card monte.

[MineralMan]

6. We don't make anything anymore?

Really. Nothing? I guess that 3M plant near me just is sitting idle, then. Who knew?

[1percenter]

13. Relative to 25 years ago

... we don't make anything anymore. Of course, that is hyperbolic, but I think the fact that you can go into any retail store and not find ONE thing made in the U.S.(that is not hyperbole) would suggest that if it were more profitable for 3M to have that factory anywhere but near you, they would move in a New York minute.

[MineralMan]

15. And again you say the thing that is not...

Any retail store? Not one thing made in the US? No..that's not hyperbole...it's an outright lie.

And the 3M plant? It's been here a long, long time. They're not moving it.

You're just blowing hard here, spouting lies and demi-truths. Why don't you do some research and find out the truth? I know it's easy to listen to the radio guys telling you what to say, but they're lying to you.

The reality is that I can go into any retail store and find item after item made here in the United States. That's why I know you're not telling the truth. I've actually looked. You, apparently, have not.

[1percenter]

24. I was in ALCO yesterday

I walked the aisles for almost an hour, waiting for another store to open. ALCO is kind of a mini-Walmart in small towns. You can tell me over the internet that my eyes were lying to me and that, therefore, I am LYING to you, but there was not ONE item I wanted to buy that did not have Made In China printed on the back.
Again, my bad, for trusting my lying eyes!

[MineralMan]

25. Not one item YOU wanted to buy, eh. ONE store.

So you blow hard about NO American made items in ANY retail store. What crap!

You didn't even do a reasonable survey of the ONE store you visited. You wanted to buy something and didn't find that item made in the USA. And that means you can extrapolate to ALL stores and ALL items.

If you say foolish things here on DU, you WILL get called on your foolishness. Please think before you write and don't write nonsense if you hope to be taken seriously.

Now, I've never heard of ALCO. None around here. Still, I have no doubt there were many items in that store made in the USA. I'm quite sure I could find them quickly enough. And even if there weren't, that's just ONE STORE. Yet...you make broad general statements. Feh!

[1percenter]

28. Broad assumption on your part

And I will call you out on that BS.
There is an American-made item for sale in Walmart. Thus the suggestion that the GREAT majority of what Walmart (ALCO, as well) sells is not made in America is therefore proven to be a LIE, a "meme?!"
Again, thanks for telling me my eyes are lying to me.
You are a cheerleader, obviously.
And if I see this kind of foolishness - telling people not to believe their own experience, but to believe the MARKET, the MARKET is the leading indicator of EVERYTHING - I will call you out on it.
BTW, I've been on DU since 2003, so you don't need to teach me any lessons about DU.

[Statistical]

30. Consumer goods is only one tiny part of world economy.

$18 plastic toy made in China
$12 million dollar locomotive made in US.

$30 kitchen appliance made in China
$200 million Boeing 787 made in US.

$50 Sneakers made in China.
$5.8 billion Westinghouse nuclear reactor made in US.

Now you won't find aircraft, nuclear reactors, heavy industrial equipment, power turbines, precision machining equipment, industrial chemicals, fertilizer, aluminum or steel on the shelves of Walmart.

What most people fail to realize is consumer goods does not equal 100% of world economic output.

[closeupready]

38. 17 posts in 6 years? 1 post per quarter? Wow.

n/t

[1percenter]

48. I couldn't have had a better teacher than DU

I have been happy to lurk ... until lately, when the economic reality of what has been done to this country the last 30 years, the deliberate destruction of industries and the communities they provided for, the obscene CEO pay, the institutional shortsightedness that can't see beyond the next quarter, the movement away from pensions to 401k's that have made workers root against their own interests only to become fodder for stock market manipulations, the creation of artificially-created vehicles to prop up market bubbles ... again, the list almost becomes too depressing to write. You know it - every intelligent person now knows that these manipulations have been deliberate and purposeful.
I hate to see on DU a cadrethat cheers the stock market as if it has anything to do with the well-being of the average American. It is disingenuous. My Dad lost $40,000 of his retirement riding that wave above 14000 ( he came in at the 13,000 level) and the crash down to the 7000's. My dad is 80. Do you think he has the time to recover those losses even if the Market functions in it's "historical" fashion? His financial adviser sure didn't take that into consideration when advising a man nearing the end of his life, when he probably needs to be most liquid, with "keeping up with inflation" near the bottom of the list.
I can't stand by and let fellow Du'ers misinform and bully others into believing this fairytale that is the stock market, that is the status quo.
To pretend that the last year DIDN'T happen. Isn't that what they're really asking of us?
BTW, I used to be Poppabear. I think I got banned for calling William Pitt an A-hole, not really sure. Which would be too bad, since I really like his writings for the most part.
I have been on DU almost every day since 2003, mostly to be educated and have my assumptions challenged. I couldn't have had a better teacher.
Anyway, I am here again as 1percenter, ban me again if you must.
If I can stay, I will be sure to be there wherever this cadre, this cell is trying to put clothes back on the emperor, to tell those us that what we see with our own eyes is fantasy, made up, or worst of all, LIES.

[Statistical]

52. Assuming he didn't sell then he already recovered almost half of what he lost.

Also comparing wealth to the peak is kinda disingenuous.

If he is 80 then he likely has been investing for long time. Buying lots up when the DOW was 3000, 2000 or hell even 1000.

What would be a better measure if look at how much principle he put into the market (money put in not any gains) over his lifetime and compare that to the value now.

[1percenter]

54. That would have been nice

Unfortunately my dad only had money to invest recently due to inheritance. Most of his money comes from the retirement fund/pension of Virginia. Correct me if I'm wrong, please, but my understanding is that their investments have to be much more conservative than a stock broker's approach. Would a 2-3% return over 40 years in a pension fund be enough to provide a person with enough to retire on, and if so, why would a current worker's retirement funds (401k) need to be exposed to any greater risk than that.

[Statistical]

56. 2% - 3%. No way. Inflation will wipe you out.

Remember inflation is the killer of wealth.

Inflation is 3.0% - 3.5% a year. If you earn < inflation in real terms you are losing money.

A pension plan tends to be more conservative but even they are shooting for a 6% to 8% return.

[MineralMan]

26. OK, I went to the ALCO website.

It's like the Family Dollar stores here in Minnesota. I looked at their ad. I saw several brands of soft drinks that are made in the USA. I also saw Sharpie pens on sale. Those are made in Oak Brook, IL. I saw other USA made products in the ad as well.

I'm afraid that you are full of crap. Go learn something, then come back.

[1percenter]

32. I stand corrected

There are, as you have proven, several things made in America.
Let me list the things that I WANTED TO BUY but did not because they were not made in America:
A Dickies full body pullover so I can ride my bike in the winter - made in China.
Ear buds for computer - 7 choices, all made in China.
Halloween stickers for our windows - made in China.
Socket wrench set - made in China.
Blades for my circular saw - made in China.
Something to fix various flat tires - SLIME, made in the USA! Finally, something made in the USA, something I could purchase that would help American workers! And not just enhance the stock value of whatever company owns the Dickies brand name.
I could have spent about $120 on products made in the USA. Instead, if I had purchased everything I listed about $110 would have been for products not made in China.
By shopping at this store, the only workers I would be supporting would be the retailers making probably $7/hr. And the trucker, like my sister, making 40-50,000/year being out on the road 13 out of 14 days. That's right, drive 13 days and get to spend one day at home, before doing it all over again.
So don't piss up my leg and tell me it's raining, pal. You're not fooling anyone.

[MineralMan]

34. You: 'So don't piss up my leg and tell me it's raining, pal.'

I'm not your pal. I'm another DUer, but not your pal.

[Statistical]

16. WRONG YET AGAIN.

US industrial output has increased an amazing 37% compared to 25 years ago.

$2.64 TRILLION vs $1.89 TRILLION.

Just to be absolutely clear this is INDUSTRIAL OUTPUT = manufactured ("made") goods. It doesn't include a single dollar of Agricultural and Service output.

http://www.statemaster.com/encyclopedia/List-of-countries-by-industrial-output

Any other BS Fox News (we just make crap up and keep repeating it until it is "true") meme you want destroyed?

Like maybe we don't export anything (third largest exporter in the world)?

[MineralMan]

19. Doesn't it get tiresome?

It sure does for me. I can hear Fox News lies anytime, if I choose to listen to them. I don't really like hearing the same garbage here on DU.

When folks spew untruths like this poster is doing, we have to counter the lies with truth. Otherwise, they'll poison DU like they've poisoned so many other places.

[redqueen]

46. I've long given up.

I just try to ignore the 'all news is bad news' crowd. My blood pressure can't take trying to have a discussion with them.

[question everything]

7. What economy? Here, for example

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4103074

and... the increase in the value of investments is not just for the "rich," not even just for the ones lucky enough to have 401Ks and IRAs. If you carry any kind of insurance - car, home, etc, having a rising stock market will ensure that your insurance company will be there to pay your claims, if you have any.

[TexasObserver]

9. Our economy. The one you're apparently ignoring.

Yes, we need to regain some of our lost manufacturing.

But this economy is improving and it has been improving for four months. You don't have to like it, but it is.

[Statistical]

10. Tired meme.... "we don't make anything anymore".

Did you ever research that yourself?

THE UNITED STATES OF AMERICA (yes the country you are in right now) HAS THE LARGEST INDUSTRIAL BASE OF ANY COUNTRY ON THE PLANET.

We "make" so much ($2.6 trillion dollars worth of manufactured goods) that it isn't even close; we are DOUBLE the next country (Japan) and almost TRIPLE the third largest (China).

http://www.statemaster.com/encyclopedia/List-of-countries-by-industrial-output

1 United States 2,643,390
2 Japan 1,253,615
3 People's Republic of China (mainland only) 973,323
4 Germany 809,380
5 United Kingdom 591,500
6 Italy 499,104
7 France 453,252
8 Canada 304,677
9 South Korea 300,771
10 Spain 300,202

Note this is INDUSTRY not services and not agriculture.

[MineralMan]

14. Thanks for the numbers.

Just like the lie that you can't buy anything not made in China in a Walmart, this common nonsense is repeated endlessly. It's a Fox News sort of truth.

[1percenter]

22. Not trying to be provocative

Just trying to get educated. What percentage of that industrial output would be weapons? Weapons systems, bombers, fighter jets, artillery, guns, etc.?

[MineralMan]

23. If you want to get educated, ask questions. Don't post nonsense

as if it were truth. So far, everything you've posted has been incorrect. Why do you do that? If you don't know the truth, ask a question. Don't blunder along spouting crap.

There's a wealth of information out there on the internet. You won't find any info at Fox, where it appears you have been looking.

[Tigermoose]

37. Thank you

I too had bought into that lie. Thanks for clearing it up.

[MineralMan]

18. Looks like your name is apt. About 1% of what you say is

accurate.

[ChiciB1]

4. I Certainly DON'T Want The Financial System To Fail... As A Liberal I DO

disagree with how some things are/aren't getting done, but I CAN attest to the rise in the S&P myself!

I watch it every day and since around March my IRA has increased more than it ever had before. I had gotten a LOT of information telling me to pull my money out and put into a Money Market account at my credit union. Didn't do it yet, but did make enough of a withdrawal that would still allow me to NOT pay taxes on it. I was wondering what was happening because I don't know exactly how the market works, I just watch my own account.

But gains have been good and I keep waiting for the bottom to fall out! That's one reason I withdrew the money right now!

We shall see, but while it HAS helped me, there are so many people who don't have money saved or even an IRA, so that's not so good for them! And as a Liberal, things still need LOTS OF FIXIN'!

[TexasObserver]

11. I think he was talking about those who seem to cheer bad economic news.

[ChiciB1]

27. THAT Is Something I Would NEVER Cheer About... The Economy MUST

GET BETTER, and I would think most everyone would want that, regardless of what they think about Obama!

[MineralMan]

3. One of the ways the growth in the Dow helps the overall

economy is to remove some of the fear among long term investors. As they see their 401Ks and other investments move toward recovering losses, they get a little more confident about spending. And spending is what's needed right now.

In that way, at least, the Dow is a leading indicator for the overall economy.

[question everything]

12. And, some of these investors may actually start hiring

new workers.

[MineralMan]

21. Yup. That's how it works.

The "We're doomed" meme is really getting tired.

[dysfunctional press]

8. without jobs in the u.s.- it's meaningless to most.

the dow is UP. the nasdaq is UP. the s&p is UP.

healthcare costs are UP. interest rates on credit cards is UP. wages aren't UP.

things haven't changed for the better for the average person- and if you ask the already long-term unemployed, there's not much sign of it happening anytime soon.

[Statistical]

20. Jobs have NEVER come before GDP growth...

Never.

Not a single time in a single economy is the history of modern economics.

To "wish" it is like wishing it will start raining unicorns and pots of gold.

Market Up -> GDP Up -> Wages & Hours Worked Up -> Employment Up.

Every single recession in every single country in the last 70 years has followed that model. To think this time it would be "special" is just setting yourself up for failure.

[dysfunctional press]

35. we shall see.

globalization hasn't been so heavily involved in those past recessions either.

when major factors change- so do the models.

[Statistical]

39. It will be a struggle to regain jobs however jobs will still only come after demand.

I see two potential scenarios:

a) some new technology or expansion of technology leads to massive amount of new jobs
b) employment market sucks until baby boomers retire. The baby boomers retiring will be a massive social shift.

By 2020 at current rate of populations entering job market (those turning 18 + those immigrating) will be less than rate at which boomers retire.

If you want to be even more cynical replace boomers retiring with boomers dying. :(

[dysfunctional press]

43. and in a consumer society- demand only happens when people start spending money again...

and people need to have a source of income in order to spend.

that brings up another way in which this recession is different than ones in years past- the number of people who are upside-down on their mortgages.

[Statistical]

58. consumers are spending money.

Companies overcut production. Inventories are declining.

Although consumers are spending less they are spending MORE than current (reduced production).

If you production is say 1000 widgets per month and you are selling say 2000 widgets per month eventually you will run out.

How do companies avoid "running out"? They increase production = more employment.

However companies are scared. They don't want to go out and double production only to end up with rising inventory again so they will hire very slowly. Meanwhile weaker companies will continue to fail and cut employment. If often takes 9-12 months before those balance out and unemployment peaks.

If you know a magic way to shorten that cycle well you would be the richest person in the world because everyone country would want your services.

[dysfunctional press]

59. that's not necessarily how companies avoid running out anymore-

they order more from their chinese supplier.
in that respect, they may increase production...and even employment- just not in the u.s.a.

the point being that wheels may very well have come off the cycle this time around.
there are a lot of very different factors than in past recessions.

[Raineyb]

61. Don't let the reality of people's ability to actually buy anything

get in the way of a perfectly good cheer. :sarcasm:

Apparently, while the stock market is going up all those unemployed people are supposed to pull non existent money out of their asses to keep up the spending. Forget that most of stocks are owned by a small number of people. It would seem that the rise in stock prices most benefits a rather small percentage of the population is not supposed to be important according to them.

The smartest thing that the upper class did was trick the suckers in the working classes into thinking that we're all in the same boat. It's still paying dividends now.

I'm sure we're about to hear about how a jobless recovery is a good thing.

[Greyhound]

17. Confusing the result of the collapsing value of the USD with the economy. n/t

[rucky]

29. Trickle-down works! Bonuses for everyone!

Questions: What is the reason for this rally? Are the Blue Chips providing goods & services that are now of greater value? Is there anything solid behind this, or just general bubbly bullishness that's driving up the market? How would that translate to job growth?

[Statistical]

31. Revenue dropped so badly last year that stocks declined with them.

Revenue is up substantially compared to last year for "most" companies.

Some of these are financials but many are companies that "make stuff" like Intel.

Since many companies held onto inventory when they couldn't sell (due to lack of demand) they fired people. Now many companies like Intel are selling goods faster than they produce. They can do this for a while because they "hoarded" inventory. However eventually a company like Intel has two choices:
a) run out of inventory and sell less at lower capacity rate = losing marketshare and "leaving money on the table
b) hire people to boost capacity to current sales rate

Intel will likely pick b.

This is HOW jobs are created after a recession. Some people want to be doom and gloom until jobs come back but what they don't get is that without demand there won't be any jobs. Intel won't hire people to be nice, or "help out" they will hire people because they NEED TO.

[Rex]

33. Bullshit, no one here wants the financial system to fail.

What a load of shit. We want the PEOPLE who are in charge of the financial system to pay for fucking up the economy! Big difference.

[ddeclue]

36. It's a fake market bubble being secretly re-inflated by our tax dollars by the Fed.

I don't believe any of it.

[Statistical]

40. You know this how? Super Secret Decoder ring? n/t

[ddeclue]

41. The Fed paying out 1.2 trillion to banks secretly and not telling us anything,

[Statistical]

42. If it is a "secret" how do you and everyone else know about it?

[ddeclue]

60. We don't know who got what and why. Only aggregate amounts.

[rucky]

45. Not so secret. No decoder ring needed here.

They should've called it the "This is not a Wall Street Bailout"

Then it would've been secret.

[AllentownJake]

44. I know, I know I'm a debbie downer

When something rises 60% in 7 months, I worry about a bubble.

[A HERETIC I AM]

49. Jake, it is just SLIGHTLY possible...

that the 6500 level on the DOW back in March was an oversold condition.

That being said, today's close isn't really all that unexpected.

[AllentownJake]

51. True

I'm 50-50 on it. Time will tell if this is the sign of a recovery or if it is an asset bubble.

[Statistical]

50. Would you consider a fall of 60% in 5 months the reverse of a bubble?

Sure 60% rise looks large but the market over corrected on the way down.

Dow 10K is still 28% below the peak.

[AllentownJake]

53. If it keeps rising at this pace over the next 6 months

I'll be worried. If the market stabilizes on the side of long term reasonable sustained growth, it will be a sign of a recovery.

[1percenter]

55. rollercoaster

The deep drop to 7000 from 14000 and then this rise to 10000 would not seem to reflect what has happened in the economy this past year. It appear to be bubble inflating, bubble popping, bubble reinflating.
As Allentown Jake suggests, a steady and stable market, in any direction, that shows a reaction to long term trends and scenarios would be more reassuring than this seeming market disconnect from reality.
And it was Greenspan of all people after all, who warned of "irrational exuberance."

[Statistical]

57. The key point is market is forward looking.

We went from the forward outlook being very weak, to a forward outlook being much improved. Intel projected improved profit margins of 62% next qtr. They project unit sales of PC shipments rising in Q4-2009 and being sustained into 2010.

Stocks move up not on what is happening now but what is likely happening in the future.

When stocks declined they were still profitable. Many beat their estimates, however the "guidance" for future was poor and the stocks suffered.

The 60% gain will not be repeated. It likely will take 2 years to reach DOW 14K. There will be dips and set backs but generally speaking looking at last 3-4 recessions the 18 months after recovery tends to have higher rate of returns because the guidance is constantly improving. Eventually the situation will be so improved that looking forward their isn't as much increase in the next qtr and stock will settle down.

[spanone]

47. this sucker likes watching his retirement funds increase.