March 2009 – Dow Jones Industrial (DJI) average approaches 6600.
July 2011 – DJI approximately 12,500.
Really? The stock market moves up 6000 points?
So the downward swing or 6,000 points reflected nothing but . . irrational pessimism?
People were overly nervous about immiment bank failures due to a foreclosure crisis? So the market panicked?
Gee, the foreclosure crisis is behind us now, right? Really?
The crisis in the banking industry is behind us now, right? No worries about Bank of America (BAC)? Sure, the stock price is down a bit but BAC is fixed now, right? No problem with Citibank, either, right? No exposure to international markets, right?
Let’s see. In the wake of the foreclosure crisis unemployment is waaaay up. Credit has tightened. Latest word on the news is that after many months of shrinking resort to credit cards there has been a recent uptick in credit card use . . best explained as people patching holes left by job losses, loss of unemployment benefits and like bad reasons for resort to credit.
That 6000 point market drop had nothing to do with the conditions that now exist. With home equity wiped out and not returning anytime soon. With unemployment still over nine percent. With credit card interest rates jacked up and access to credit cut down. With boomers now moving into retirement and therefore needing to liquidate retirement holdings and move from equities to more secure holdings, such as investing in government bonds, treasuries and other (once supposedly) secure investments?
Was the 6000 point upswing in the stock market average any more rational than the 6000 point dip . . crash?
Was the 6000 point uptick bullish . . . or bullshi . . . ?
What will it take to set off another “rush to the (market) exits” . . . and as an investor can anyone actually “be prepared” for it?