Greenspan on Deficits

[Secretariat]

http://biz.yahoo.com/ap/050421/greenspan.html?.v=11

[Suff]

http://biz.yahoo.com/ap/050421/greenspan.html?.v=11

Wall Street's not overly concerned..

DJIA 10,144.11 + 131.75

Nasdaq 1,947.93 + 34.17



And on a related subject... Articles? Links? Would it kill people to post a Paragraph with a "lead -in" or "jist" of the story. It takes absolutely zero time to post a Link with "Greenspan on Deficit"....

people know where yahoo is... Post a Lead in...and on a further point.. there are probably 3 threads running that are discussing Politics/economy...do we really need a new thread on every machination of the subject.

Not just you specifically...I'm speaking overall... P

[Secretariat]

Suff,

Wall Street's been all over the place, but the overall trend since late February has been down close to the 10,000 mark on the Dow until today. I'm hoping there is a sustained rally on earnings alone, but I expect profit taking tommorrow. Remember how much the Dow lost over last week compared to today. The DOW and Nasdaq are still down for the year.

Greenspan's comments on the deficits are quite revealing especially in lieu of another 81Bil appropriation for Iraq and Afghanistan, and a supplemental down the road, and Bush wants the tax cuts made permanent, and a trade deficit at record highs. Quarterly earnings for a few companies are nice, but most likely the Bears will be back real soon esepcially in lieu that GReenspan will be raising rates again in May - perhaps a half.

[PaceAdvantage]

Quarterly earnings for a few companies are nice,

Few?

[Secretariat]

Pa,

Yes Few.

Suff,

Sorry, here's a blurb from the article:

"Greenspan repeated his support for a return to budgeting policies that would require Congress to offset future increases in government spending or new tax cuts with reductions in other government programs OR TAX INCREASES.

A decade-long pay-as-you-go provision expired in 2002.

"Our budget position is unlikely to improve substantially in the coming years unless major deficit-reducing actions are taken," Greenspan said.

Greenspan touched a nerve with Democrats, some of whom are still stinging from the Fed chairman's endorsement of Bush's $1.3 trillion tax cut in 2001. That cut was proposed when the government was expecting a decade of budget surpluses.

"I was wrong like everybody else on the issue of surpluses," Greenspan said."

[PaceAdvantage]

FEW?

Forty-nine percent of the companies in the Standard & Poor's 500 have reported earnings so far, according to data from S&P. Of that group, 66 percent have topped Wall Street estimates, up from 55 percent last Friday.


S&P has forecast a 9 percent increase in operating income for the first quarter, but this week's results are changing the outlook. "A few positive earnings surprises could boost the number to the 10 percent level," Howard Silverblatt, equity market analyst at S&P, wrote on Friday.

[Secretariat]

PA,

Can you explain why the Nasdaq is down 11% for the year based on all this good news and the Dow down 7%?

[PaceAdvantage]

What happened? Did I thoroughly discount your "FEW?"

Now you've spun it around in another direction, and a totally different discussion?

[Secretariat]

What happened? Did I thoroughly discount your "FEW?"

Now you've spun it around in another direction, and a totally different discussion?

Not at all. The title of the thread is Greenspan on Deficits. You made that into some of the current companies meeting Wall Street estimates. Yet despite that the Dow and Nasdaq are signficantly down for the year, and down once more again today.

If in fact earnings are up, and still the markets cannot sufficiently rebound then it bodes very poorly indeed, especially if these earnings are not sustained. My reference to a "few" was in regard to the few companies reporting this past few weeks, not all companies for the year. But this is irrelevant in terms of what the thread was titled which deals with the effect of the deficit on the overall economy.

In terms of spin, I think you've tried to put the best face on a very negative year for the market. I understand. You're a stunch Bush supporter and to admit their is serious weakness and volatility at present in the market, and that the deficit is weighing heavy on the US economy as Greenspan is saying flies in the face of your political support of Bush.

[PaceAdvantage]

Not at all. The title of the thread is Greenspan on Deficits. You made that into some of the current companies meeting Wall Street estimates.

No I did not. That was Suff and yourself who brought up earnings this quarter. I simply questioned your use of the word FEW. Nice and neat. Plain and simple.

I'm not looking for any politicizing...I'm just looking to correct your error.

[Secretariat]

No I did not. That was Suff and yourself who brought up earnings this quarter. I simply questioned your use of the word FEW. Nice and neat. Plain and simple.

I'm not looking for any politicizing...I'm just looking to correct your error.

Ok, I'll revoke my reference of few because it isn't waht I started the thread about in the first place.

I would honestly though be interested in your response to my previous question to you.

"PA,

Can you explain why the Nasdaq is down 11% for the year based on all this good news and the Dow down 7%?"

[PaceAdvantage]

The markets have been doing nothing but going straight up since August of 2004. Something like a 25% gain during that period of time on the Nasdaq for example. You can't keep going straight up forever. Markets need to correct, they need to retrace.

Inflation, high oil prices, and fear of an economic slowdown added fuel to the selling, which became most intense last week. Perhaps that was a sign of capitulation, meaning for now, we move sideways like we have this week, until the markets decide to break out again one way or the other....it's still too early to tell.

[Kreed]

This is just IMHO commentary: I think we are in an economic downturn.
The evidence is NOT 100% clear; even when economists speak "downturn"
they say, "Growth of 3%, not 5%." I think downturn of Zero to ~1% growth;
in other words, serious sliding. For the record, (a) I HOPE I am wrong; (b) I
am NOT 100% certain of this because the Bond Market is definitely NOT
behaving like "anyone is right about anything." But DEFICITS, INFLATION,
POOR EXPORT FIGS, HIGHER GAS PRICES, HIGHER INTEREST RATES, LOWER
HOUSING STARTS & TURNOVER, WEAK JOB NUMBERS --- its the combo of
all these things interacting that don't sound good. RE BONDS --- there is
a Wall St "theory" that Asian countries are buying bonds to keep their currencies
LOW against the dollar. They are not concerned with the price of the bonds;
just KEEP THE BOND YIELD LOW. If so, then Bond performance today would
make sense & ergo, our economy is tumbling or stalling or stagflating --- none
of which is good. Many market mysteries remain --- which is why I would say
buy index-linked government bonds or commodities and NOT equities for Now.

[Secretariat]

Well, PA, I hope you are right and this is a three month correction rather than the beginning of a serious downturn otherwise I will have to seriously adjust my portfolio. And switching to a majority of shorts is not good for the economy.

Kreed,

Your advice is quite good. Do you work on Wall Street?

[PaceAdvantage]

Did Kreed actually give advice? I couldn't tell...

[ljb]

Did Kreed actually give advice? I couldn't tell...
He said " which is why I would say buy index-linked government bonds or commodities and NOT equities for Now."
Just thought I would help you tell...

[PaceAdvantage]

Hmmm..I missed that part....thanks!