Dow over 11,000

[2Sheds_Jackson]

Fresh off the wire

AP-
NEW YORK — The Dow Jones industrial average rose above the psychologically significant 11,000 point mark for the first time since June, 2001 Monday as stocks continued their recent rally.

The Dow Jones industrial average was up 42.51 points, or 0.39 percent, at 11,001.82, after climbing as high as 11,003.50 just after 1 PM EST. The Standard & Poor's 500 Index was up 3.18 points, or 0.25 percent, at 1,288.63. The technology-laced Nasdaq Composite Index was up 12.24 points, or 0.53 percent, at 2,317.86.

"It's all because of Bush" said one industry expert "his polices have lead to this milestone". A nearby Democrat added "...says you".


OK I added the last bit myself. Still, it's good news.

[Greek soldier]

If the SEC adopts the IFRS (International Financial Reporting Standards) then the Market Capitalization will increase by 20%. Indeed good news in days of corporate scandals...

[annihilation]

First how 11,000 mean anything. Do we get cake and balloons? Its just an arbitrary number. Don't get me wrong, the market is doing great and is moving in the positive direction. But too many people put weight on that number, more than it should be.

That being said. How will the IFRS increase our Market Capitalization by 20%? Thats an awefully large increase in value for just a change in reporting?

[Greek soldier]

The IFRS valuate companies differently than US GAAP (mostly EBITDA). I is not a simple change in reporting. Stock options, futures, leasing and real estate are very differently in IFRS than US GAAP (even though IFRS has US GAAP as primary base). I read this statement in a sidenote in "Financial Statement Analysis" by Wild-Subramayan-Halsey, McGraw-Hill Company.

[vryhpyammoadded]

Yeh, that's great... Gimmie my pay raise so I can take advantage of the stupidly inflated home costs here. When is that silly bubble going to burst so I can afford a reasonably priced home that isn't a dump? Also, the prices of everything here just went up again by about 7%. Sheeesh...

Well, at least I have a job again.
Good news though.

[Greek soldier]

Yeh, that's great... Gimmie my pay raise so I can take advantage of the stupidly inflated home costs here. When is that silly bubble going to burst so I can afford a reasonably priced home that isn't a dump? Also, the prices of everything here just went up again by about 7%. Sheeesh...

Well, at least I have a job again.

Just Hope this bubble won't blast like an A-bomb, because such shocks destroy economies (remember Japan??).

[ed316]

Just Hope this bubble won't blast like an A-bomb, because such shocks destroy economies (remember Japan??).

japan right now is started rolling and I don't see the housing bubble burst anytime soon, if it does stand by people!

[Greek soldier]

Back in the 1990's Japan faced huge financial problems (disinflation, real estate bubble etc.) and after 16 years now is back on track. Just hope the same thing want happen in the USA also... especially now that China is going to replace its depositis in Euros...

[ed316]

Back in the 1990's Japan faced huge financial problems (disinflation, real estate bubble etc.) and after 16 years now is back on track. Just hope the same thing want happen in the USA also... especially now that China is going to replace its depositis in Euros...

yeah that is scary about the Euro..and if OPec does the same, man it's going to be a slog. the government needs to chill on the pork and spending

[Impulse_t0]

Hey greek, sorry this has nothing to do with the post, but what vehicle is that as your avatar? I think I have a toy model of it.

[Greek soldier]

China holds about 40% of the US Treasury bonds and notes...

Saudi Arabia is to change its currency sooner or later...

[Abolith]

Yeh, that's great... Gimmie my pay raise so I can take advantage of the stupidly inflated home costs here. When is that silly bubble going to burst so I can afford a reasonably priced home that isn't a dump? Also, the prices of everything here just went up again by about 7%. Sheeesh...

Well, at least I have a job again.
Good news though.



so what are the homes costing in your area?? here in So cal I see them for 500K average :(

[annihilation]

My home town average new home costs around 600k to 750k.

About the Euro replacing the dollar. It will be only a matter of time. Euro is easier to swallow politically than the dollar so I see most things converting over in time.

China is going not going to replace it deposits with Euro but is going to buy deposits in Euro along side desposits in the USA. Its more to headge there risk. Why put all your eggs in one basket, if that currency tanks your f'd. The Russians do the samething, starting a few years back when the dollar dropped in value. The euro is the only other stable currency out there.


Japan economic problems mostly were due to their faulty banking system. They gave loans to companies just to keep them afloat. Like the old saying goes. You owe the bank 1 million dollars, they owe you. You owe the bank 1 billion dollars and you owen them.

[Greek soldier]

Hey greek, sorry this has nothing to do with the post, but what vehicle is that as your avatar? I think I have a toy model of it.

It's a Russian-built Zubr Hovercraft (NATO codename: "Pomornik"). 4 units are operated by the Hellenic Navy. :) :) :)

Japanese also had problems with real-estate. I've read that Tokyo's real-estate value in 1990 equaled the whole value of USA's real estate (!)

[annihilation]

Japanese also had problems with real-estate. I've read that Tokyo's real-estate value in 1990 equaled the whole value of USA's real estate (!)

Thats a little hard to believe.

[Greek soldier]

Thats a little hard to believe.


Japanese euphoria over becoming the world’s financial giant, was short-lived. The inflated Japanese financial system, with banks awash with money, led as well to one of the world’s greatest stock and real estate bubbles, as stocks on the Nikkei index in Tokyo rose 300% in a space of three years after the Plaza Accord. Real estate values, the collateral of Japanese bank loans, rose in tandem. At the peak of the Japan bubble, Tokyo real estate was valued in dollar terms greater than that of the entire United States real estate. The nominal value of all stocks listed on the Tokyo Nikkei Stock Exchange accounted for more than 42% of world stock values, at least on paper. Not for long.


http://www.jahrbuch2000.studien-von-zeitfragen.net/Weltfinanz/Hedge_Funds/hedge_funds.html

................ Oh, boy! With that money you rebuild the whole of Africa...

[annihilation]

http://www.jahrbuch2000.studien-von-zeitfragen.net/Weltfinanz/Hedge_Funds/hedge_funds.html

................ Oh, boy! With that money you rebuild the whole of Africa...

God damn thats alot of money.... Rebuild africa, please don't you know that money would get lost.

[Greek soldier]

Right, most African politicians are corrupted...

[2Sheds_Jackson]

At the peak of the Japan bubble, Tokyo real estate was valued in dollar terms greater than that of the entire United States real estate.

I found that a bit hard to believe so I did some diggin',,,.


Japan suffered one of the biggest property market collapses in modern history. At the market's peak in 1991, all the land in Japan, a country the size of California, was worth about $18 trillion, or almost four times the value of all property in the United States at the time.

....

Now the land in Japan is worth less than half its 1991 peak, while property in the United States has more than tripled in value, to about $17 trillion
http://www.iht.com/articles/2005/12/25/business/bubble.php


Anyhow ....the market closed over 11,000 too.

It may be a meaningless, arbitrary number (and I agree that it is) - but remember that markets are built on perceptions, not realities. If the market thinks it's important, then it is.

Also saw this today-


BASEL, Switzerland (Reuters) -- The global economy is growing at a dynamic pace and may even accelerate in 2006 as threats fade and companies step up investments, central bankers from major countries said on Monday.
The surge in crude oil prices has failed to restrain economic output, trade prospects are improving and central banks have kept a lid on inflation expectations, European Central Bank President Jean-Claude Trichet told a news conference.
"The global economy proved very, very resilient in the eyes of governments and particularly resilient in the sharp run-up in energy prices," Trichet said after a meeting of G10 central bankers from the world's largest developed and emerging nations.
http://edition.cnn.com/2006/BUSINESS/01/09/global.growth.reut/index.html


Nice to see good news once in a while. Though no doubt somebody will find a way to paint it as a sh*t sandwich.

[California Joe]

Hopefully the property values stay retardedly high until later this week when the mortgage company appraiser shows up so I can get a 70% value loan and not pay any points and still have extra money......I neeeeeeeeeeeeed an M1 Garand baaaaaaaaaaaaaaadly.p-)

[ViktorNavorski]

Japan economic problems mostly were due to their faulty banking system. They gave loans to companies just to keep them afloat. Like the old saying goes. You owe the bank 1 million dollars, they owe you. You owe the bank 1 billion dollars and you owen them.

China is having the same problem with their Big Four lenders (and real estates problem), one of the main factor that their IPO were offered early and fast. Basically, U.S. and European banks now all have some stakes in China's banking industry and China is hoping they clean up that mess fast or they will be looking at the same economics melt down that the Japanese faced.

[cut]

as long as the FTSE 100 is more then half the dow jones I'm happy (FTSE is at 5731.5)