Missing It Completely

(Image: source)

The bad news just keeps on coming, and yet the "smart money" just keeps on buying...stocks. I guess they must be thinking they'll surely catch the falling knife this time around, right? Otherwise, how else to explain their unbridled bullishness amid a rising tide of disappointing data points and negative news reports like the one that follows?

"Most Americans Think Economy Yet to Hit Bottom" (CNBC)

Nearly two-thirds of Americans believe that the economy has yet to hit bottom, meaning a double-dip recession is expected, a nationwide survey from Citigroup showed Thursday.

The quarterly report, conducted by Hart Research Associates, revealed that 62 percent of people asked were still not counting on a rebound, which is 3-point decline from the March reading and almost as bad as last September's result of 63 percent.

The employment picture painted by the data was bleak too with 85 percent of respondents reporting that job opportunities were only fair or poor. Nearly half of those asked said that the job market was poor.

"Clearly, the mood of Americans has been heavily influenced by the unemployment numbers here at home and the news of economic woes in Europe," Jonathan Clements, director of financial education at Citi Personal Wealth Management, said in a statement.

The survey also showed that Americans' expectations for when the economy will stabilize for their households have been pushed further into the future. Nearly two thirds think that their households will not see a stable financial situation for at least two or three years, it said.

Comments

[Dave]

Michael,

Are you assuming that the market is not being manipulated? If you are, that may be naive.

[roger]

it is the height of naïveté to believe that Michael
is naïve.

[NO stocks 4 me]

Are you kiddin? you mean you don't watch CNBC? you mean you don't know the stock guru booya boy Krammer? , smirks Just be one of his followers, you'll be just fine.(groans)

If not than his half brother the goldie pimp turned seed planter will tell you is all bullish.

Damn Uncle Ben, raise the damned rates already!!!!!!

[W.C. Varones]

I'm holding stocks because the market is manipulated.

The last thing The Powers That Be want is a stock market and housing crash.

Maybe I'm wrong that they can stop it. I'm probably at least early. But I think QE2 is going to blow our minds.

[plan b economics]

Maybe have a little exposure to risk assets, but definitely don't put all your eggs in one basket. Be patient.

Besides, there are plenty of better ways to make money than in the stock market. In a deflationary environment, bonds are a great investment.

Also remember taxes, debts and savings...its about financial independence and doing what makes sense.

http://www.planbeconomics.com/wealthcreation

[lacoste shoes 2010]

Did you ever expect a corporation to have a conscience,when it has no soul to damned,and no body to be kicked?Do you understand?

[Michael Murphy]

Michael - the key question to always ask is: "What happened to stocks in the previous periods when Factor X was like it is today?" (If only CNBC would ask every guest this question!)
The answer in this case is that when the average American is in a bad mood about the economy, stocks dramatically outperform during the next six months. When the average American thinks everything is great, stocks dramatically underperform during the subsequent six months. That's because the average American is a lagging indicator - they don't create the future, they respond to the past.
Ned Davis Research does great work in always remembering to ask the key question. It leads one to buy stocks when the blood is running in the streets. The average American buys stocks when everything is hunky-dory, the best of all possible worlds is thoroughly priced into the stock market, and things can't get better. If things can't get better, guess in what direction the next surprise will be?
http://NewWorldInvestor.com

[Youngworker]

We can't compare this to 1937 because they did not have computers trading stocks. At least that's what the history books told us in school.

[beaten with a stick]

Americans are not in a bad mood...its just that some people have guaranteed incomes that are back stopped by the government ie through bloated pensions (not soc security but gamed city, state, & federal which are padded, double dipped, and awash with disability fraud etc) and others have no backstop with no means of employment. They are frustrated and worn out by a so called free market system that has an embedded caste system. "The haves" have because of random chance (settled for security in income but hit the lottery without buying a ticket)...they all think their Hank Aaron's but they never swung a bat in private enterprise. Frauds go unpunished, politics get dirtier each year, and many people are ending up like this woman.

Disappearing Middle Class: Bilingual Ph.D. Accepts Rent Money From Church

Ortiz lives in Las Vegas, Nevada, where the unemployment rate is currently the highest in the country. She says that while people often think of higher education jobs as being in a different category than most others, like construction or health care, she has experienced the same frustrations applying in her field as anyone else.

"You go through the trouble of applying, people know you, people recommended you, you're looking forward to the interview. Then a few days later, they send you an email saying, 'I'm sorry, but because of budget cuts, we're suspending the search.' It's no longer frustrating, its enraging! Why do they advertise these positions in first place, if they don't really exist?" she said.

http://www.huffingtonpost.com/2010/07/23/disappearing-middle-class_n_656941.html

[come fly with me]

You can be that lady or you could be these guys...is the economy good or bad for these guys? I don't think it matters and their consumption (retail sales) won't be affected....is it capitalism? I have no idea what it is...........

Friday, July 23, 2010
California City Seeks Dismissal of Highly Paid Officials

I know this is a sad situation... especially if they were forced out. But never fear residents of CA ... you are on the hook to the tune of $1M in pension payments to these folks (at least 2 of them) every 1.75 to 2.25 years. Yes sir - a million bucks (for life) roughly every 22 to 26 months. After all "they work a lot", unlike those folk who own their own business or work for "the man".

* If Rizzo leaves, he still would be entitled to a state pension of more than $650,000 a year for life, according to calculations made by the Times. That would make Rizzo, 55, the highest-paid retiree in the state pension system.
* Adams could get more than $411,000.
* Spaccia, 51, could be eligible for as much as $250,000 a year when she reaches 55, though the figure is less precise than for the other two officials, the Times said.

http://tinyurl.com/27lpp3v

[leslie]

This guy is on target....

Invasion of the Apparatchik

http://tinyurl.com/27w3d2n

[none]

Jekyll Island poster from Mish.

[BobLyons]

We are far from the bottom yet. The gov't is on this unemployment money binge that, in my opinion encourages unemployment. We can spend money on unemployment and not put it into small business development without damaging the economy even worse.