More market irrationality

[GoUSC]

So Home Depot sales fall, Wal Mart sales are flat or decreasing, foreclosures continue at a dizzying pace but because the inflation figures aren’t as bad as people thought they would (we all now the inflation figures are crap to begin with) the market rallies.

Further proof that the US financial markets are completely without common sense or rationality.

[lniles]

I would think Home Depot would rally because of all the “fresh paint” sellers need to keep their housing prices up. 🙂

[Coronita]

…and you know what? Pretty soon some members here are going to start griping about how they missed the stock market swing just like they’ve been griping about how expensive homes are 🙂 🙂

There no point in fighting the market. It is what it is. If you think the financial markets are crazy here, look at what the chinese and indian stock market have been doing. The chinese market has nearly doubled in the in the past couple of months. That’s what I call a house of cards that can easily topple.

Anyway, you’ll see a pattern of retailers emerge. Those retailers that cater to low income folks (such as walmart) will probably have rougher days ahead. Also, home improvement will probably have rough days ahead…Because frankly, folks in the low income will probably get hit hardest with this inflation and espectially with the simple home-as-a-piggybank evaporates. Those retailers that cater to high income folks will probably have great earnings (Sak, Nordstrom, Tiffany’s etc).

[GoUSC]

I have enjoyed profit for the run up in the market but have now moved my assets to more conservative investments but the point of my comment is that the market is now jumping on every little piece of economic data from the government instead of using rationality. And I fully agree with you. The high end retailers will do well. The companies like GAP, Limited, Abercrombie are going to be brutalized.

[hipmatt]

Inflation figures are crap.. they don’t include energy or food … hmmm two things that are mandatory to spend on to survive… and two things that have very high inflation.

Wall Street is funny though… every time the market gets decent news, or no bad news , the market surges up.. bulls party, celebrate, and brag about the future strength of the economy, but then, they all call for, and expect a rate cut to help stimulate the economy… but if the economy is doing as good as they say, or as good as the markets are showing lately.. then why do they need a rate cut??

On the other hand, if the fed suggests a rate increase, wall street PANICS, in a whiny type fashion…and sells off the market.. and goes… boo hooo.. you are gonna raise rates, that will ruin my quarter here.. even if it is good for the dollar, inflation, and it will help repair our current negative savings rate and maybe prevent future credit and debt problems that Americans face.

I didn’t realize how much wall street panders to the fed, begging and pleading like a spoiled child to the fed to get what they want, then when they get their present, they go bragging instantly to the world… see.. we just got a rate cut!!!! Look at my stock prices surge. or they can use threat to influence the fed by pulling out of the market and saying.. you made me do this… if you raise rates… we will just destroy the markets and then it will be your fault. No one will like you..
and it seems to be working.

I also think the point is that our economy is SO dependent on finance, easy money, and consumer debt, and that is why our markets flip out day to day depending on the latest inflation numbers, or fed rate talk.

[(former)FormerSanDiegan]

Inflation figures are crap.. they don’t include energy or food … hmmm two things that are mandatory to spend on to survive… and two things that have very high inflation.

Wrong. Actually, the government reports Inflation, which includes food and energy as well as Core Inflation, which excludes food and energy. The reason is that food and energy prices are more volatile. It’s not that they believe those don’t matter, they just bounce up/down a lot faster than other prices. Long sustained period of rising energy prices eventually manifest themselves in the core inflation numbers because of production and transportation costs.

[HereWeGo]

Stop it with the rationality, FSD.

[cr]

I saw that same article on MSN, although it now shows Wal-Mart profits are up, despite lower sales reported.

The other thing it says is more wonderful poopaganda from the National Association of Liars:
“The median price of a single-family home fell to $212,300 in the first quarter of 2007, down 1.8% from the price of a home in the first quarter of last year.”

The report said this was the third quarterly drop in a row, the first-quarter decline followed declines in the third and fourth quarters of 2006.

But NAR President Pat Combs said she found the number encouraging.

“It appears the worst of the price correction is behind us,” Combs said in a the press release. And more states are stabilizing, she said, noting Wyoming, the District of Columbia and Arkansas as the top three states with sales increases.”

This BULL$#!^ market doesn’t take any news serisouly. Low Sales at Home Depot means people are doing less work on their houses, whether before a sale or after, indicating the potential for future sales is lessening. If prices dropped before this news, logically they will only fall more because of it. Yet the bulls see this as the end.

I think they should replace the term “bull” with “ostrich.”

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