May 5, 2013

THE FOX BUTTERFIELD QUESTION:

Dow 15,000, and the Big Disconnect (JEFF SOMMER, 5/05/13, NY Times)

"The beauty of economics is that we are still arguing about the causes of the start and the end of the Great Depression," said James W. Paulsen, the chief investment strategist at Wells Capital Management in Minneapolis. "We'll be debating these questions for the rest of our lives."

Economists and market strategists have plenty of opinions, however, and Mr. Paulsen, who takes a glass-half-full perspective on the current situation, is no exception.

He says the stock market rally can continue so long as the economy keeps growing at what he prefers to call a "modest" pace, rather than a disappointing one. Despite evidence to the contrary -- most crucially, stubbornly high unemployment -- he maintains that the recovery is actually quite good under the circumstances. And, he said, it's robust enough for American corporations to churn out solid profits that will bolster stock returns.

Simply rephrase the question here and it answers itself : how long can corporate shares keep rising as they continue to produce more goods while lowering employee costs?   
Posted by at May 5, 2013 8:24 AM
  

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