Stock market drop and immigration bill

[IXLR8]

Is it just me, or does anyone else think the drop in the stock market is a diversionary tactic used to draw attention away from the pending immigration bill?

The market was obviously manipulated by posting speculation to an end to the Fed's artificial stimulus, causing the drop. Conveniently it happens when everyone is concentrating on the immigration bill. Lets see how the news sources pick the top story of the day...

 

[matefrio]

You have a point.

Or the stock market is reacting to the labor issues of the immigration bill.

 

[ShootingTheBull]

Nobody can ever say for sure exactly WHY something happened, but -- I've been expecting a substantial downturn in the market for months and months, and been mystified as to how the market was keeping itself propped up. So I'm not surprised in the least that the downturn has started, and I suspect it has zero to do with any immigration bill.

The reasoning is really simple -- much of the market rise has been fueled by the fed's quantitative easing. Just like a junkie who's hooked on heroin, they feel great while they're getting the stuff, but once you take the stuff away they crash hard. Bernanke admitted that the end for QE may be in sight. And if it is, that means very, very bad things for interest rates (which you can already see being reflected in the yields on the 10-year note). And if interest rates rise much, the fragile "recovery" we have is screwed. This government that borrows 40 cents out of every dollar it spends -- what do you think will happen to it when it costs more and more to borrow those 40 cents?

Remember how the US debt rating got downgraded last year, and the panic that caused? That was based on an assessment that we can't pay our bills as-is. Now if our interest payments go up, because rates are higher, we're just that much less able to deal with our debt. So all the pieces are in place for a serious market downturn.

The real media manipulation you should be asking about is -- where did all those stories go? Remember how the US's debt situation was so bad that we were bumping into the ceiling, we weren't going to be able to pay our debts, we got downgraded, we put into place the sequester because it was such a terrible thing (a doomsday machine) that it would FORCE our legislators to come up with a solution, and ... all they did was kick the can down the road. None of the underlying problems have been solved.

How about Europe? Remember the debt plague that was sweeping across Europe? Greece anticipating being forced to exit the Euro zone? The PIIGS (Portugal, Ireland, Italy, Greece, Spain)? Germany cutting off the flow of money to bailing countries out? Cypress's banking collapse -- and subsequently them confiscating something like 40% of their wealthy depositors' money? The Euro zone itself collapsing imminently? Soros saying that the Europeans had 90 days to figure out their situation before the whole thing collapsed? France raising their top tax rate to 75%, which drove out their wealthy businessmen and entertainers, which would cause their overall tax revenues to drop instead, putting France's economy at risk... Where'd all that go? Did we miss some massive economic recovery sweeping across Europe?

Or are all those problems still there, just as dangerous as ever, and -- nobody's talking about it?

Hold on to your wallets. This is gonna be a bumpy ride. And the fact that nobody's talking about it anymore, well, that should probably scare you even more than last year's big scary headlines when they were talking about it!

 

[ScorpionHunter]

It's neither. Volatility has been creeping higher for the past month, and stocks were looking for any reason to sell off. This isn't the first time the Fed has signaled higher rates. Bonds are the most sensitive to that, and they sold off sharply back in May, and got whacked more than stocks over the past couple of days. Stocks were climbing the wall of worry. It's just coincidence that immigration is moving through the Senate.

 

[J. Fred]

I'm not at all bothered by the sell off. I've been waiting for it to happen to pick up some more stocks.

Now is the time to be buying while others are selling.

 

[Vaquero]

Obummer and Bernanke had a pissing match.
We lose.

 

[oldguy]

Problem with immigration bill it's full of pork will bring down wages on the low wage workers bring more crime and in the end in ten years we will have another 10-15 million illegals looking for another amnesty. The stock market is like Vegas the big money goes to the house.

 

[1slow01Z71]

The stock market has been crutched by QE for a while now, its only a matter of time before the house of cards falls. Thats why I'm refinancing my house right now. Cut the length in half for a 20% increase in payment aint a bad deal. I dont think it has anything to do with the immigration bill.

 

[AcidFlashGordon]

Immigration reform, better known as amnesty, just happened to be the topic of news during the recession of prices in the stock market. I seriously doubt there's any correlation whatsoever between the two. I've been expecting the stock prices to dip and even crash for quite some time. There are too many similarities between the times now and what happened during the Great Depression. Government bailouts. Bloated minimum wage. Excessive government debt. AND, most of all, Congress sitting around with their thumbs up their collective asses doing absolutely nothing to cut spending to reign in excessive government debt.

 

[Mexican_Hippie]

My two cents....(it's worth what you pay for it)

I think we'll only see only small corrections and some mini-booms until at least the 2017-2018 timeframe. I think mortgage lending does tighten up in the next 12 months though.

Hiring 'amnestized" workers will help businesses skirt Obamacare expenses if it passes, and we'll have a small energy boom outside of coal increasing our exports and strengthening the dollar a little. Those two things should provide enough of a lift to keep things going for a handful of years with minimal easing.

When those play out there's nothing I can see left to prop it all up. I don't think complete financial apocalypse is coming tomorrow, like some do. I think there's still time for people to pay off debt and get some savings built up for the uncertainty ahead. And it's just that - uncertainty. We simply don't know what's going to happen or how it will play out, but it won't be good. Regardless, its a good idea to get yourself into better financial shape.