Many of the raging bulls in the media are talking about how well the market is doing. They are talking about how close we are to business as usual and the strong corporate profits that have been reported. I even heard one talking head today say that it was good that banks are not lending because it is showing that they are doing their due diligence before making a loan. I almost fell off my seat when I heard that one. In other words they have not done their job since 2000.
Wall Street is the ultimate spin machine. Some can only hope to make money cheering the market up. It is still shocking how people believe that a weak dollar is good for the American citizen. What is good about it? Is it good that the stock market is rising as the dollar falls? How can that be good or beneficial? What happens to the retiree that is on a fixed income? The dollar (DXY) is obviously losing purchasing power. What ever happened to those so called baby-boomers that are due to retire in the next few years? Perhaps they must simply put retirement on hold and work the rest of their lives. After all they say most people that retire drop dead a year later anyway.
How about those booming corporate profits that we hear so much about. Almost every report that we hear or read is making money on cost cutting. Whether it is a based on corporate layoffs or slashing inventories and spending it is still cost cutting. This economy is based on consumer spending and where is this spending going to come from?
So while the markets rallies and the dollar declines let Wall Street get out the party hats. Eventually someone will have to pay for the falling dollar. Until then people can rejoice over the lift in the 401k statements while the dollar deteriorates. When it's time to cash in the retirement plans what will the cash be worth? Until then it's simply a stock market love story.
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