Dow hits 2004 low

[lookout123]

while some improprieties will be found in Spitzer's latest investigations it is important to remember that Spitzer is preparing for a future political office, most likely the governor's mansion. (normal path for the AG) that isn't to say that M&M are without problems, but let's remember who is going after them. it is the same man who has spent vast amounts of time and energy going after mutual fund companies and brokers by targeting 12b-1 fees. he has spent incredible time and energy championing the idea that they are designed to screw the client, when in reality the exact opposite is true.

and as far as the DOW's current standing proving there hasn't been economic recovery? this wasn't exactly an unexpected pre-election slide. most of us have been warning of this temporary movement for 6-8 months. corporate earnings continue to climb at a respectable pace, stock prices (which comprise the DOW) always trail corporate earnings by at least 12-18 months. small and midsize companies feel the upswing first but amateur investors wait to believe in the upswing until the see large companies reap the benefits. large companies affect the DOW. when corporate earnings peaked in the spring of 1998 we didn't see the DOW tumble for quite some time. it is all part of the normal economic cycle with a nasty political race thrown in for good measure.

no matter who is elected, stocks will climb again within a couple of weeks(of a winner being announced). i expect we'll be somewhere around 10,500 by the end of the year and closing on 11,000 by 2Q 2005.

as far as your claim that a lot of white collar folks should have been prosecuted - you are absolutely right. the downside to that process is that it leaves story above the page one fold for a very long time, and that has a very negative affect on the market. although profit and earnings drive the economy, mass psychology have a very meaningful impact on the day to day market.