Maserati wrote:
Ah yes, the "fundamentals" that the technicals guys love.
________
huh? the whole point of technical analysis is to IGNORE fundamentals and just look at prices. So I have no idea what you are saying here. I am not a technicals guy anyway - the only technical I use is as a risk control in some occasions.
I am much more of a buy and hold/asset allocator guy.
_______________
Meanwhile as we continue to run deficits, the cost of debt service continues to rise. Although the pace of that rise might currently be dented slightly, there is still a MASSIVE rise, especially when it is considered how deficits have risen incredibly over the past few years.
___________________
Dented slightly? The deficit has shrunken massively - it was 10% of GDP, now it is around 2.4% of gdp. 2.4% of GDP is completely sustainable - we could run those #s from now until eternity and there won't be a problem. There is no 'slightly' here.
Your mistake is to consider the bush/obama stimulus as some kind of baseline. It wasn't. It was a one time life preserver thrown to the economy. And it worked - compare the thriving US to the anemic Europe (which went the other way - toward austerity)
Fact is, the deficit is completely sustainable right now. The problem is the next recession - We need to either get the economy growing past 3% or put away lots o'cash for a rainy day.
_____________________
It is a bit disingenuous of you to say that a small decrease in the market doesn't really matter, but that a small decrease in the deficit (if there indeed is one) does matter.
_______________
No. invalid comparison.
The stock market has a standard deviation of 18%. It flies around like a panicked, well, house fly. The deficit is a supertanker - it moves glacially (except the rare time it hits an iceberg like 2008). A trend in the deficit is meaningful.
______________________
Interest rates are low because they are a response to the artificially-low rate of inflation as reflected in the CPI and PPI (yes I know that some believe that the CPI over-estimates inflation), and because the housing market is the only thing left that is perceived able to sustain bubble-type growth.
_________________________
No - interest rates are low because of massive,massive demand for debt. Nations, individuals are buying bonds of all kinds. The globe is desperate for yield. This, tied with the low inflation rate and QE, has created probabaly a generational low in interest rates. Which is good for business and gov't, bad for retirees.
_____________
Stock market high does not reflect the value, this is generally agreed-upon.
Unemployment rate is bogus, look to workforce participation rates and under-employment.
_________
eh. mostly early retirees from the fin'l crisis. They would be retiring in the next few years anyway. Combined with some medicare disability fraud, which is troubling but will be fixed.
The whole thing is a house of cards, propped up by optimism. So far it has worked, but you know what? At some point, the big investors (those with significant "retirement investments") are going to begin withdrawing, rather than contributing, and in a big way. Where will we find new investors? Foreign money?
______________
yes, those billions of young people coming of age in newly middle class societies like China and India. You think they won't invest? it never ends, my friend - there is no last generation. There will always be young ones who need to invest.
______________________
And yes, I believe that it takes investors (capital) to generate jobs, and economic activity. I have believed this since my very first grunt job, a very long time ago.
Here's more information on the federal deficit trend:
http://www.fitsnews.com/2014/04/16/us-debt-check-stormy-skies/