Business

Speculations and Fictions.
by Milota Sidorova

The fact the Dow Jones is climbing over 10, 000 point level is clearly not a reason to be happy. At least, not, if you consciously analyze the situation. Although there’s been considerable rise past seven months and the Dow Jones recovered its 40 per cent, there is no stronger economical performance behind the stocks. There’s definitely not good job situation and consumer spending. For so long these three have been tied together. When there were enough jobs, people were satisfied and spent more. That’s quite logically. It also transformed into market gains or loss. Now, the situation seems to be quite different. What may be behind the increase may be ! just slight improvement in heavy industry, showing a little expansion last months. There is also general expansion in financial sector. But most of the investors are reluctant to invest, hire and grow. This way the unemployment will stay upon the same level for weeks if not months. There’s been a loss of 263,000 lay offs in September and the total loss has topped 3 million a year. The rate is pending around 9.4 percent and according analysts it may grow. So what we have right now, is a weak stock increase, the growth without solid basements, good macroeconomic figures. It may a result of hedge bond business and prevailing speculation of experienced investors. It could be nothing new, since half of American GDP was caused by fictive financial operations, not the real production. Speculative manners have had a long tradition on Wall Street and it’s surely its own world independent from the environment. What’s more we can say that engine fuels of current s! tock rally, the financial corporations have done quite well du! ring the crisis. Its power and independence level increased and as we can see these days – they are getting well even without real people. Although the logic says, it can’t stand for long.

related story (sgx15668): http://news.yahoo.com/s/cq/20091017/pl_cq_politics/politics3...

by Milota Sidorova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be! kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 7:06 PM