S&P 500 Then and Now

[beachFool]

can the market be a leading indicator sans retail investors? can the banks be compelled to clear bad assets and lend? can gdp growth happen with high unemployment?

I was floating on the Buffalo River in Arkansas when you made this post.

Since you didn't use caps I thought you were just making a point.

"can the market be a leading indicator sans retail investors?" The stock market has historically been a leading indicator. It could be different this time, I guess.

"can the banks be compelled to clear bad assets and lend?" Don't know. Bad loans will eventually be written down per GAAP.

"can gdp growth happen with high unemployment?" It is albeit tepid growth.

Can I have my candy now?

 

[30ashopper]

can the market be a leading indicator sans retail investors? can the banks be compelled to clear bad assets and lend? can gdp growth happen with high unemployment?

I'd say barely to one and three, as for two, 1.4 trillion in MBS purchases by the FED helped clear bad assets. That money then went back into stocks, corporate bonds, and treasuries. This was one hell of a market stimulus. But it won't help people find work.

(Freddie and Fannie also picked up a lot of bad loans, which we are now on the hook for. Fannie currently onws half of Sandestin!)

 

[Lynnie]

The lenders build in and expect a 3% default rate. It's double that right now at 6%, yet it's caused a ginormous stall in the system. So, there are 94% good mortgages and notes out there. Not too shabby.