The End is Near
The stock market works on its own logic and smart people who
apply normal logic to it do so at their own peril. Most people have been
fearful about the market, despairing about the economy and disgusted with the
government. So what did the market do? The Dow Jones Industrial Average rose
more than 1,000 points in little over a week in early October. Did the outlook
suddenly improve dramatically? Not at all. It’s true the world didn’t end. Most
of the time it doesn’t. In the ashes of bear markets and terrible
recessions, great bull markets are born. The light at the end of the tunnel
always seems a long way off but we get there at unexpected times and sometimes
with surprising speed. Beneath the gloomy headlines, some positive news lurks.
Major banks have reported strong lending for the first time in four years, the
Federal budget deficit dropped $300 billion from the original estimates because
of higher revenues and lower spending and it is expected to drop another $300
billion next year, according to the U.S. budget office. Eventually the economy
will heal and employment will improve and the stock market will lead. No one
knows when that will happen but it doesn’t pay to despair.