HAVE to as in forced against our will. HAVE to as in forced against reason and rational thought. We HAVE to follow the herd or be stampeded by it despite screaming FACTS like the ECRI data on the right that CLEARLY shows that the herd is INSANE!
USUALLY, the market (and its investors) understands that where there is smoke,t here is fire. The last time ECRI was this low (on the way down) was early 2008, by which time we KNEW the economy was stalling and the Government gave us a tax rebate that goosed us for a few months but then we crashed and burned in a horrible, horrible mess that kind of made us wish they hadn't screwed around in the first place.
The ONLY OTHER TIME ECRI was this low, since the great depression, was back in 2001, but the Nasdaq had long since crossed 3,000 from the other direction and was on it's way from 5,000 to 1,500 – only a 70% drop. Don't worry though, in 2007 the Nasdaq was all the way back to 2,850 and then only fell to 1,250 and that's just 56% so this time may indeed be different despite the lower low in 2007 on the 6-year cycle that we're again in year 5 of.
Clearly, things are much better than they were in late 2008/early 2009, right? I believe, at the time, people thought the World was going to end and they were lining up at banks in Europe to withdraw money and the US had 300 bank failures and the FDIC was down to its last $50M to cover the $8Tn worth of cash on deposit (all better now, they have $850M!) and 1,000,000 people a single month were losing their jobs… Yes, things are better than the end of the World, that's for sure!
But, are they Dow 13,200 better? Are they S&P 1,400 better? Are they Nasdaq 3,050 better?
The NYSE doesn't seem to think so. Although the Dow (14,100), the S&P (1,560) and the APPLdaq (2,800) and even the Russell (850) are all within striking distance of their 2007 highs, the NYSE (10,300) is still 21% below at 8,125. Why is our broadest market index, whose capitalization ($16Tn) is larger than the Nasdaq ($5Tn),…