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« Save the HRSP | Main | Wisdom of crowds »

Sep 26, 2007


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I thought certain people on this blog said the subprime issue was nothing to worry about? I thought everything was fine. I'm just so confused...


Anyone else confused or understand why our stock markets are going higher?

Ed Cone

Cheap money from the Fed? Bets that the scope of damage is understood and priced into market already, and that the larger economy is sound? Wishful thinking?

What's the inflation-adjusted price of the Dow vs its 2000 peak, anyway? S&P? NASDAQ?

I'm nervous about the dollar.


Adjusted for inflation, the S&P's 2000 high would be the equivalent of 1,850 today, give or take a few points. So there's still plenty of room to run! Actually, I think the wishful thinking stems, in part, from the battered dollar. The argument i'm hearing from bulls is that the cheap dollar will drive exports and manufacturing. Me, I moved into bonds. Except for my shares in "recession proof" Google.

Ed Cone

S&P closed today at 1525...


indeed it did --- a 23% jump, adjusted for inflation, since the housing bubble popped two summers ago.


Ed, watch gold. Gold, along with other commodities will tell you where the dollar is headed.

For the newspapering world, the big threat in a real estate correction comes from the impact on big ticket spending by consumers. IF consumers have used home equity to fuel the purchase of cars and consumer electronics -- and they have to SOME extent -- then those sectors will also chill.

Now pick up any daily and count the inserts and ad column inches devoted to those sectors.


"I thought certain people on this blog said the subprime issue was nothing to worry about?"

Obviously, that opinion wasn't directed at people like you, who ALWAYS need to worry, regardless of the situation.

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