Sheep Back to the Slaughter: Lessons from the Great Depression Part VIII: All the Change and Bear Market Rallies.
How quickly people forget the lessons from the past. Last week was a complete bear market rally. We had a few companies such as Google and Honeywell announce solid earnings but the banking sector is still in the shambles. Here is a quick tip for any amateur investors, when a company announces massive layoffs this typically is good for the stock but bad for the economy. It is becoming rather apparent that what is good for Wall Street is only going to exacerbate the common condition of the middle class of America. If stealth inflation wasn’t enough they now have to deal with watching a class of speculators make money on mal-investment in financially engineered products that do nothing for the well being of our country. Citigroup Inc. announced a $5.11 billion quarterly loss and future job cuts of 9,000 but rallied 7.49 percent during the week.
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Merrill Lynch posted its 3rd consecutive quarterly loss and announced plans to cut 2,900 workers. This was good enough news to make the stock rally 8.4 percent for the week
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Bwahaha! The rally was built on hope and this coming from folks that are knocking the idea of many Americans being hopeful about their country. If we let these yahoos on Wall Street run our country we’d see a 1,000 point rally on the same day they announce 1,000,000 job cuts. There was very little to be excited about during the week. The DOW, S&P 500, and NASDAQ were all up 4.2+ percent on the week. This apparently was good enough for people to jump back into the market once again to get another expensive lesson. Heck, these firms are cutting jobs and posting major losses and you are jumping back in? Did they not see the horrific housing numbers for California? Do you really think we are at the bottom?
More at:
http://www.doctorhousingbubble.com/sheep-back-to-the-slaughter-lessons-from-the-great-depression-part-viii-all-the-change-and-bear-market-rallies