Where is the US economy headed?

There are some problems with your assessment pstewart

Yes the market is cyclical and goes up over time but then you proceed to claim the reason it goes up is cutting taxes.

The one clinging to the myth is someone that makes that claim. The market has gone up when tax rates were 91% and when they were 15%. The overall tax rate doesn't really matter as long as it has stayed in the 17-22% of GDP range. Since WW2 there is no statistical relationship to GDP growth and tax rate as % of GDP when adjusted for government deficit spending. The thing that matters MOST for GDP growth is government deficit spending which isn't suprising since if you borrow and spend you can spend more into the economy than if you spend within your means.

I must agree with parados, tax rates have little or nothing to do with the stock market.

Sit tight for peace will shortly return.

Think in terms of 5 and 10 year intervals, not days.

A financial guy I know predicted a fairly major correction a few months ago, and he was surprised it had not happened already. This is normal for the stock market since its inception. Corrections are an integral part of the market. They have to exist by definition.

Look, if you guys don't want to discuss the short-term situation, that's fine with me. I do. Just don't respond if you don't wish to discuss what's actually going on with the economy right now.

Dow's off another 225 as of this posting. That's more then I had anticipated today.

Cycloptichorn

The DOW is down more than 300 points now.

Cyclo, It's practically impossible to know the trend for any one day. The reason is very simple; people who play the daily trades try to "beat" the market, and very few people succeed. There's always the potential for an upswing based on people's perception of "buying good deals."

Even the financial pundits were saying that the stock market was healthy based on earnings ratio. Most talk through forked tongue.

Nobody knows how the market will react depending on what the news seems to be for the hour or day.

Think long-term.

Is the US economy still strong enough to overcome this current crisis?
What are the factors that will impact the future of our short-term and long-term economy?

Our economy is headed to China along with the manufacturing jobs.

I think purchases from China will slow down based on unsafe foods and toys. Cheap won't overcome those factors.

What about the capital gains tax?

The day traders will all have capital gains taxes to pay - if they've shown gains. It's pretty tough in this market. Most people can't figure out what's up and what's down by the minute/hour/day.

Some of the index funds are taking a big hit.

We're still on the plus side for this year, but barely.

Waters are muddy because of the "day trader" activity.

Most of the institutional players are in the market too. They can't afford not to remain active in volatile markets.

And, Miller and Cicerone, what are yall's opinions of short sellers?

watched larry kudlow on MSNBC this afternoon .
he demanded that the federal reserve bank (?) step in , but a FORBES editor said : "larry , you've always said that the government should stay out of the investment businees - are you now for corporate welfare ? "
the forbes fellow said that he thinks that it would be best for the fed NOT to step in , otherwise investors would think that they can make foolish investments and when they don't work out the fed will come to the rescue .
he claimed that the regular banks are not in any danger of defaulting and things should be allowed to work themselves out - kudlow was NOT happy with forbes today !
hbg

rjb, My best friend used to play the market with buying short, but I always felt it was a gamble and stayed away from trying to play the market. Always bought mutual funds and annuities, and lost some money on individual stock purchases - a few times. I purchased some Transmeta stock, because I met a guy at the local coffee shop about seven years ago who knew some of the people working there, and they developed low energy chips. I figured it was a good investment, but they ended up licensing their inventions to other companies about two years ago. Their stock has been as low as in the twenty cent range recently, and I wonder how they continue to be listed on the NASDAQ. I took the loss on some capital gains last year, and the rest this year for my mandatory IRA withdrawal.

I've never understood why people feel like they need to go to casinos to play the one armed bandits and other things when you could either be a farmer or play the stock market to satisfy your gambling urges. At least the mafia owning the casinos don't take their cut out of it. And why buy lottery tickets when your odds are better in the stock market?

But are your "odds" really better?