| When Energy is cheap and widely available you have a 1995 Bull Stock Market. When
Energy is dwindling and uncertain you have 1979 or 1999 Bear Markets. There is no
closer or better link in economics of the Stock Market than the price of Energy.
Those two are the two most linked factors in economics. |
| Engels provided valuable insight into the relationship of
foreign investment to the stock market: Colonization was
purely a subsidiary of the stock exchange, he wrote. He
explained that the financial crisis comes at the very height
of the capitalist cycle. And the stock market is also a
barometer of the depth and length of a general economic
crisis. |
| In Jackson Hole, Wyo., thousands of miles from the
feverish ups and downs of Wall Street, Federal Reserve Chair
Alan Greenspan delivered a major speech at the annual
conference on monetary policy issues. Amid sparkling lakes
and distant mountains, Greenspan characterized the booming
stock market and rising real-estate prices as a bubble that
could burst. |
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| My guess is that in the next several months the news will have something about oil
prices rising and the stock market falling dramatically in response. With that
news item. Belatedly the TV news reporters such as Nightly Business Report and
Wall Street Week and the CNN will finally turn their ship around and see the link
between oil and stock market and on their news broadcasts the reporters will again
flood the airwaves with news of oil and stock market and how the two are linked.
They will no longer bother everyone with irrelevant issues such as Intel, Cisco,
Nortel layoffs and earnings decline expectations. Instead, they will report the
real-news, the real news that oil is moving higher and thus the stock market is in
for a prolonged bearish stock market. |