The crucial year: 1929

Introduction

Almost eighty four years ago, the New York Stock Exchange experienced the worst financial panic the country had ever seen. There have been more crashes since — with bigger numbers and bigger losses — but nothing quite rivals the terror and devastation of Black Tuesday: October 29, 1929.

When President Calvin Coolidge delivered his 1928 State of the Union address, he noted that America had never "met with a more pleasing prospect than that which appears at the present time." Americans had a lot to be proud of back then: World War I was thoroughly behind them, radio had been invented, and automobiles were growing cheaper and more popular. Sure, the disparity between the rich and the poor had widened within the past decade, but Americans could now buy goods on installment plans — a relatively new concept — and families could afford more than ever before. Stocks were on a tear: between 1924 and 1929, the Dow Jones Industrial Average quadrupled. At that time, it was the longest bull market ever recorded; some thought it would last forever. In the fall of 1929, economist Irving Fisher announced that "stock prices have reached what looks like a permanent plateau." (See pictures of the stock market crash of 1929.)

Unsurprisingly, this exuberance lured more investors to the market, investing on margin with borrowed money. By 1929, 2 out of every 5 dollars a bank loaned were used to purchase stocks.

The market peaked on September 3, 1929. Steel production was down, several banks had failed, and fewer homes were being built, but few paid attention — the Dow stood at 381.17, up 27% from the previous year. Over the next few weeks, however, prices began to move downward. And the lower they fell, the faster they picked up speed.

In the last hour of trading on Thursday, Oct. 23, 1929, stock prices suddenly plummeted. When the closing bell rang at 3 p.m. people were shaken. No one was sure what had just happened, but that evening provided enough time for fear and panic to set in. When the market opened again the next day, prices plunged with renewed violence. Stock transactions in those days were printed on ticker tape, which could only produce 285 words a minute. Thirteen million shares changed hands — the highest daily volume in the exchange's history at that point — and the tape didn't stop running until four hours after the market closed. The following day, President Herbert Hoover went on the radio to reassure the American people, saying "The fundamental business of the country…is on a sound and prosperous basis."

And then came Black Monday. As soon as the opening bell rang on Oct. 28, prices began to drop. Huge blocks of shares changed hands, as previously impregnable companies like U.S. Steel and General Electric began to tumble. By the end of the day, the Dow had dropped 13%. So many shares changed hands that day that traders didn't have time to record them all. They worked into the night, sleeping in their offices or on the floor, trying to catch up to be ready for October 29.

As the story goes, the opening bell was never heard on Black Tuesday because the shouts of "Sell! Sell! Sell!" drowned it out. In the first thirty minutes, 3 million shares changed hands and with them, another $2 million disappeared into thin air. Phone lines clogged. The volume of Western Union telegrams traveling across the country tripled. The ticker tape ran so far behind the actual transactions that some traders simply let it run out. Trades happened so quickly that although people knew they were losing money, they didn't know how much. Rumors of investors jumping out of buildings spread through Wall Street; although they weren't true, they drove the prices down further. Brokers called in margins; if stockholders couldn't pay up, their stocks were sold, wiping out many an investor's life savings in an instant. So many trades were made — each recorded on a slip of paper — that traders didn't know where to store them, and ended up stuffing them into trash cans. One trader fainted from exhaustion, was revived and put back to work. Others got into fistfights. The New York Stock Exchange's board of governors considered closing the market, but decided against it, let the move increase the panic. When the market closed at 3 p.m., more than 16.4 million shares had changed hands, using 15,000 miles of ticker tape paper. The Dow had dropped another 12%.

In total, $25 billion — some $319 billion in today's dollars — was lost in the 1929 crash. Stocks continued to fall over subsequent weeks, finally bottoming out on November 13, 1929. The market recovered for a few months and then slid again, gliding swiftly and steadily with the rest of the country into the Great Depression. Companies incurred huge layoffs, unemployment skyrocketed, wages plummeted and the economy went into a tailspin. While World War II helped pull the country out of a Depression by the early 1940s, the stock market wouldn't recover to its pre-crash numbers until 1954.

The crowds on Wall Street after the stock exchange crashed.

The New Deal

In early 1933 nation needed immediate relief, recovery from economic collapse, and reform to avoid future depressions, so relief, recovery and reform became Franklin D. Roosevelt`s goals when he took the helm as president. At his side stood a Democratic Congress, prepared to enact the measures carved out by a group of his closest advisors — dubbed the "Brain Trust" by reporters. One recurring theme in the recovery plan was Roosevelt"s pledge to help the "forgotten man at the bottom of the economic pyramid."

Birth of the "New Deal" The concepts that became the New Deal had been discussed in earlier years but without effect. The statement by National Catholic War Council in 1919, drafted by Father John A. Ryan, contained recommendations that would later be regarded as precursors of the New Deal.

The term "New Deal" was coined during Franklin Roosevelt"s 1932 Democratic presidential nomination acceptance speech, when he said, "I pledge you, I pledge myself, to a new deal for the American people." Roosevelt summarized the New Deal as a "use of the authority of government as an organized form of self-help for all classes and groups and sections of our country."

The exact nature of Roosevelt`s intentions was not clear during the campaign, although his philosophy was set out in an address that he gave at the Commonwealth Club of San Francisco on September 23:

The government should assume the function of economic regulation only as a last resort, to be tried only when private initiative, inspired by high responsibility, with such assistance and balance as government can give, has finally failed. As yet there has been no final failure, because there has been no attempt, and I decline to assume that this nation is unable to meet the situation.

At his inauguration in March 1933, Roosevelt declared in his lilting style, "Let me assert my firm belief that the only thing we have to fear is, fear itself — needless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance." In his first 99 days, he proposed, and Congress swiftly enacted, an ambitious "New Deal" to deliver relief to the unemployed and those in danger of losing farms and homes, recovery to agriculture and business, and reform, notably through the inception of the vast Tennessee Valley Authority (TVA). The New Deal effects would take time; some 13,000,000 people were out of work by March 1933, and virtually every bank was shuttered.

The New Deal programs were born in Brain Trust meetings prior to Roosevelt"s inauguration, and also were a grateful nod to Theodore Roosevelt`s "square deal" of 30 years earlier. Members of the group included Raymond Moley, an American journalist and public figure; Rexford Tugwell, Adolf Berle of Columbia University, attorney Basil O`Connor, and later, Felix Frankfurter of Harvard Law School. Many of Roosevelt`s presidential campaign advisors continued to counsel him after he was elected, among them Berle, Moley, Tugwell, Harry Hopkins, and Samuel I. Rosenman; but they never met again as a group after his inauguration.

Herbert Hoover

Opening the way for the New Deal, President Herbert Hoover was defeated by Franklin D. Roosevelt in the Election of 1932. Hoover, who had been blamed for the stock market crash and the Depression, strongly opposed Roosevelt`s New Deal legislation, in which the federal government assumed responsibility for the welfare of the nation by maintaining a high level of economic activity. According to Hoover, Roosevelt had been slow to reveal his New Deal programs during the presidential campaign and worried that the new president would sink the nation into deficit spending to pay for the New Deal. Roosevelt never consulted Hoover, nor did he involve him in government in any way during his presidential term.

The "Hundred Days"

The president called a special session of Congress on March 9. Immediately he began to submit reform and recovery measures for congressional validation. Virtually all the important bills he proposed were enacted by Congress. The 99-day (March 9-June 16) session came to be known as the "Hundred Days."

On March 12, 1933, Roosevelt broadcast the first of 30 "fireside chats" over the radio to the American people. The opening topic was the Bank Crisis. Primarily, he spoke on a variety of topics to inform Americans and exhort them to support his domestic agenda, and later, the war effort. During Roosevelt`s first year as president, Congress passed laws to protect stock and bond investors.

Among the measures enacted during the first Hundred Days were the following:

? Emergency Banking Act (March 9), provided the president with the means to reopen viable banks and regulate banking;

? Economy Act (March 20), cut federal costs through reorganization of and cuts in salaries and veterans` pensions;

? Beer-Wine Revenue Act (March 22), legalized and taxed wine and beer;

? Civilian Conservation Corps Act (March 31). Three million young men, between the ages of 18 to 25, found work in road building, forestry labor and flood control through the establishment of the Civilian Conservation Corps (CCC);

? Federal Emergency Relief Act (May 12), established the Federal Emergency Relief Administration to distribute $500 million to states and localities for relief. Administered by Harry Hopkins for relief or for wages on public works, that federal agency would eventually pay out about $3 billion;

? Agricultural Adjustment Act (May 12), established the Agricultural Adjustment Administration to decrease crop surpluses by subsidizing farmers who voluntarily cut back on production;

? Thomas Amendment to the Agricultural Adjustment Act, permitted the president to inflate the currency in various ways;

? Tennessee Valley Authority Act (May 18), allowed the federal government to build dams and power plants in the Tennessee Valley, coupled with agricultural and industrial planning, to generate and sell the power, and to engage in area development. The TVA was given an assignment to improve the economic and social circumstances of the people living in the river basin; and the

? Federal Securities Act (May 27), to stiffen regulation of the securities business. 

The "Second Hundred Days"

Congress also enacted several important relief and reform measures in the summer of 1935 — sometimes called the Second Hundred Days.

During the Second Hundred Days, those measures enacted included:

? Joint resolution to abandon the gold standard (June 5);

? National Employment System Act (June 6), to create the U.S. Employment Service;

? Home Owners Refinancing Act (June 13), to establish the Home Owners Loan Corporation (HOLC) to refinance non-farm home mortgages;

? Glass-Steagall Banking Act (June 16), to institute various banking reforms, including establishing the Federal Bank Deposit Insurance Corporation, that insured deposits up to $5,000, and later, $10,000;

? Farm Credit Act (June 16), to provide for the refinancing of farm mortgages;

? Emergency Railroad Transportation Act (June 16), to increase federal regulation of railroads; and the

? National Industrial Recovery Act (June 16), to establish the National Recovery Administration and the Public Works Administration.

Following Roosevelt`s lead, the government launched a relief program, the Civil Works Administration (CWA), in winter 1933-1934. The CWA provided funds to such authorities as mayors and governors for public projects including road, bridge, and school construction, park restoration, and others. Critics castigated the CWA as make-work, much of it useless.

After a few months, Roosevelt terminated the CWA, but other programs enjoyed longer lives. The Civilian Conservation Corps (CCC) lasted from 1933 until 1942. Its members produced notable and lasting results with flood control, soil conservation and forestry programs. The Works Progress Administration (WPA)was established in 1935 to provide work for the unemployed. Between that year and 1941, the WPA employed an average of two million people a year. The WPA went on to spend billions on reforestation, flood control, rural electrification, water works, sewage plants, school buildings, slum clearance, student scholarships, and other projects. Their crowning achievement came in the completion of the Bonneville Dam on the Columbia in 1937.

The New Deal also greatly influenced the American Labor Movement, especially through the following legislation:

? Through the National Industrial Recovery Act of 1933 the National Recovery Administration (NRA) came into being. The NRA attempted to revive industry by raising wages, reducing work hours and reining in unbridled competition. Portions of the NRA were ruled unconstitutional by the Supreme Court in 1935; however, the Works Progress Administration (WPA), which was the second part of the NRA, was allowed to stand. The majority of its collective bargaining stipulations survived in two subsequent bills. The NRA — a product of meetings among such "Brain Trust" advisors as Raymond Moley, big business leaders, and labor unionists – illustrated Roosevelt`s willingness to work with, rather than against, business interests.

? Employees were guaranteed the right to negotiate with employers through unions of their choosing by the Wagner Act of 1935, and it established a Labor Relations Board as a forum for dispute resolution. The act bolstered theAmerican Federation of Labor, and pointed to the inception of the Congress of Industrial Organizations (C.I.O.), another labor movement.

? Workers were given the right to bargain collectively through the National Labor Relations Act of 1935.

? The Fair Labor Standards Act of 1938 promulgated a 44-hour workweek with time-and-a-half for overtime and pegged a minimum wage of 25 cents an hour. The act also provided that the hours worked would drop to 40 and the wage would incrementally rise to 40 cents. In addition, the bill made child labor under the age of 16 illegal. 

The U.S. government could reach out in the widest way to alleviate human misery — such was an assumption that underlay the New Deal. Beginning in 1935, Congress enacted the Social Security Act of 1935 (and later amendments) that provided pensions to the aged, benefit payments to dependent mothers, crippled children and blind people, and unemployment insurance. Small businesses, homeowners and the oil and railroad industries were given help by other legislation.

Who paid for the New Deal?

The foregoing projects, and others, were expensive, and the government was not taking in enough revenue to avoid deficit spending. To fund all the new legislation, government spending rose. Spending in 1916 was $697 million; in 1936 it was $9 billion. The government modified taxes to tap wealthy people the most, who could take it in stride most easily. The deficit was made up in part by raising taxes and borrowing money through the sale of government bonds. Meanwhile, the national debt climbed to unprecedented heights.

Response in the U.S. Supreme Court

Supreme Court Chief JusticeCharles Evans Hughes provided a swing vote during the critical Depression and New Deal eras, although liberal senators had assumed that he would hold conservative positions when he was nominated by Hoover in 1930. Critics have suggested that some of Hughes" pro-New Deal stances were prompted by a desire to weaken FDR`s court-packing scheme, not by conviction. He supported Franklin Roosevelt"s decision not to pay government obligations in gold, provided a critical vote upholding collective bargaining rights under the Wagner Act and upheld the controversial Social Security Act.

On other occasions, however, Hughes dealt severe blows to the New Deal, most notably in Schechter Poultry Corporation v. United States (1935), in which he voted with the majority to strike down the National Industrial Recovery Act. In 1937, Hughes publicly opposed Roosevelt"s plan to pack the Supreme Court with sympathetic justices and offered his opinion in writing to the Senate Judiciary Committee.

Opponents of the New Deal

By 1934, the New Deal was encountering opposition from both ends of the political spectrum. All around the country, brazen unions — some Marxist-influenced — sparked job actions, including a city-wide strike in San Francisco. Nevertheless, the most prominent left-wing threat to Roosevelt was a Louisiana senator, Huey P. Long, who railed at the New Deal for not doing enough. Conservatives argued that Roosevelt had done too much. Some of them organized the American Liberty League in August 1934 to galvanize the right. However, in the mid-term elections, the Democrats gained enough seats in both houses of Congress to enjoy veto-proof majorities.

The nation saw measurable progress by 1935, but businessmen and bankers increasingly opposed the New Deal. The president`s experiments alarmed them. The rich, conservatives, numerous businessmen — and those who were all three — vigorously opposed the New Deal. They were dismayed by his toleration of budget deficits and his removal of the nation from the gold standard, and were disgusted by legislation favorable to labor.

Election of 1936

The U.S. Supreme Court had been nullifying crucial New Deal legislation, but the president was re-elected by a wide margin in 1936. That nationwide endorsement of FDR, who carried every state except Vermont and Maine, convinced him that he had popular backing. To capitalize on it, Roosevelt introduced legislation to expand the federal courts, ostensibly as a straightforward organizational reform, but actually to "pack" the courts with justices sympathetic to his proposals. He was unsuccessful, but constitutional law would eventually change to allow the government to regulate the national economy.

Conclusion

As the free world geared up to fight the Axis powers, Roosevelt began to turn his attention away from domestic policies and toward helping the Allies, while maintaining an isolationist position towards entering the fighting of World War II. With America"s eventual entry into the war, that nation"s economy continued to improve. Large-scale production of military equipment and the draft turned America"s eyes toward a larger enemy than the beast of poverty that it had once known during The Great Depression, thus closing the chapter on the New Deal.

U.S.Stock Market today

US stock markets surged to new record highs as Wall Street traders seized on a tepid jobs report to engage in a fresh orgy of speculation.

The official line promoted by the Obama administration is that the United States is in the midst of an accelerating economic recovery. For the corporate and financial elite that runs America, and the section of the upper-middle class that hangs on its coattails, a soaring stock market is indeed what defines economic health. For the vast majority of the population, however, life five years after the Wall Street crash of 2008 is dominated by the daily struggle to make ends meet.

Official statistics—of poverty, unemployment, indebtedness, declining wages—give a glimpse of this social reality, which the mass media does its best to obscure.

One sobering statistic that emerged on Thursday points to the social reality that underlies the euphoria on Wall Street. According to the Centers for Disease Control and Prevention, the past decade has seen a sharp increase in the US suicide rate.

Among those aged 35 to 64, suicides soared nearly 30 percent between 1999 and 2010. More people in the US now kill themselves than die in car accidents. The fundamental cause is no mystery. It is the economic crisis, which has brought with it a rise in unemployment, poverty, malnutrition, illness and homelessness, and all of the personal and family problems that go along with these scourges.

The social crisis affects all sections of the working population—young and old, working and unemployed—of all races, genders and ethnicities.

For millions of older workers, the prospect of economic security and a decent retirement is growing ever more distant as the elderly are forced to dip into their savings and take on ever greater debt just to survive. The debt of Americans aged 65 to 74 is rising faster than that of any other age group, according to Federal Reserve figures. For a typical household led by someone 65 or older, household debt grew by more than 50 percent between 2000 and 2011.

The already insufficient benefits provided by Social Security and Medicare, the federal retirement and health care programs, are being scaled back. Fewer and fewer retirees have a guaranteed pension. Among those that do, many have resorted to borrowing against their pensions and paying usurious interest rates to unscrupulous lenders.

Last week, the New York Times reported that companies that offer pension advances often charge interest rates, after factoring in fees, of between 27 and 106 percent. Older households spent 7.1 percent of their incomes to pay off debt in 2010, up from 4.5 percent three years earlier, according to figures from the Employee Benefit Research Institute.

Earlier this month, Wells Fargo reported that the number of older workers borrowing from their 401(k) retirement accounts—and paying penalties to do so—surged 28 percent at the end of 2012 compared to the same period in 2011.

Conditions are no better at the other end of the age spectrum. Almost 16 million children in the US, or 22 percent, live in families whose income is below the federal poverty line, according to the National Center for Children in Poverty. Last month, the United Nation"s Children"s Fund released a report showing that, among developed countries, the United States ranks 26 out of 29, behind Greece and just above Lithuania, Latvia and Romania, in terms of the percentage of children living in poverty.

Every year, 1.3 million students drop out of high school in the United States, and, according to the National Center for Education Statistics, low-income students fail to graduate at six times the rate of higher-income youth.

Those students who get to college are increasingly saddled with student loans they will never be able to pay off. Between 2003 and 2012, the portion of 25-year-olds with student debt rose from 25 percent to 43 percent.

In the face of unemployment and falling wages, marriage and home ownership are becoming too expensive for many. Home ownership rates are at the lowest level in eighteen years, while the portion of children born out of wedlock has grown from 31 percent in 2005 to 36 percent in 2011, according to Census Bureau figures released this week.

The Census report noted, "Children who are born to unmarried parents are more likely to live in poverty and to have poor developmental outcomes." In 2010, 42.3 percent of families headed by single females with children were in poverty, according to the Demos Project.

Overall, the current US poverty rate, estimated at 16.1 percent, is the highest since 1965. According to the Census Bureau"s supplemental poverty measure, there are a staggering 49.7 million people in the United States who are in poverty. More than 48 percent of the population is poor or "near poor," meaning they make less than double the official poverty rate.

Nor is poverty confined to the unemployed. According to a report issued last month by the US Census Bureau, the percentage of the population who are "working poor" rose dramatically, from 5.1 percent in 2006 to 7 percent in 2011. One quarter all those in poverty—about 10.4 million people—are working.

The bulk of new jobs are in low-paid service industries, and even manufacturing workers increasingly make as little as $10 an hour—a poverty wage for a family of four.

The effects of poverty are myriad. According to one recent study, 80 million adults in the US, about 43 percent of the total population, did not get medical care sometime in 2012 because they could not afford it. This is up a shocking 17 million since 2003.

Growing poverty and social distress are treated essentially as non-issues by the mass media. According to a recent study by the Pew Research center, the US media focused just one fifth of one percent of its news coverage on the topic of poverty. "In no year did poverty coverage even come close to accounting for as little as one percent of the news hole," Mark Jurkowitz, the project"s associate director, told Harvard"s Nieman Foundation.

In an earlier period, such indices of social distress would have been treated as a national disgrace. Today, far from proposing any measures to address the social crisis, the Republicans and Democrats, with the Obama administration in the lead, vie with each other over how best to slash Social Security, Medicare and other vital social programs.

There is a deep and growing anger directed against the entire social system and a ruling elite that grows rich from the impoverishment of the broad masses of the people. This sentiment can find no expression within the framework of the existing political system.

Forecast Summary and Analysis: Forecast Summary and Analysis of the U.S. Stock Market

Fifth Year Of Bull Market With The Major Averages Continuing To Make Gains

For months stocks have been up up and away.  Most of the market believe a pullback is near, still.    But as always, the stock market can and will do what is least expected.

 January Federal Reserve FOMC minutes caused a hiccup in stocks in late February with the FOMC minutes indicating that the committee is rethinking Quantitative Easing.  Global stock markets sold off with the U.S. seeing two days of negative sentiment.  But as has been the case after the knee-jerk reaction stocks put on a small rally regaining lost ground.

 Fed Chief Ben Bernanke to the rescue as he Stumps monetary policy on the Hill, defending Quantified Easing as markets weigh that against Cyprus uncertainty and the U.S. Governments continued inability to get a budget deal through.  Bulls won out again sending stocks up posting gains ahead of more uncertainty.

 A good payroll number for February with a net negative revision for December and January caused stocks to rally, all the while Sequestration kicked in.  Many months of good job creation numbers with favorable revisions, needed for the labor market and the economy to recover.  Jobless new claims chart show a smidgen of improvement but still looks like a very difficult recovery for the labor market.

 The Dow (DJIA) and S&P500 continue to make new highs, as the S&P 500 breaks through the longstanding October 2007 record high.  It's expected that testing will see a small pullback initially then either blow by the high or pullback- It's also conceivable the index to dance around the October 2007 high.

 Europe is back in focus with Cyprus bailout in question.  Cyprus Parliament rejected the initial deal, the so called bank deposit tax levy, but before rejecting it they had to think about it.  The news broke over the weekend so traders and investors were ready to hit the sell button when the markets opened.  So, markets around the globe cratered on the news only to recover later in the week.  Uncertainty equals volatility!

 Uncertainty still grips some [global] markets but the U.S. Stock Market shelved Cyprus and all of Europe's problems for now.  Cyprus accepted Lender agreement to close the bad banks and freeze deposits over $129,000.  Banks are open after weeks of being closed.  For now the drama is over as the U.S. stock market continues to inch its way higher.

 The Dow and S&P 500 are making all-time highs and most everyone is looking for a pullback/ correction.  Guess what!  Stocks probably will continue inching higher.

 *The NASDAQ is lagging this year and could outperform the other indexes by years end.  The tech heavy NASDAQ is well ahead of the Dow and S&P500 over the course of the bull market, which started in March 2009.  NASDAQ* up over 86%, the S&P 500* up over 62%, and the Dow* up over 57%. *data as of 5/4/2013.

 As soon as investors figure out stocks are continuing higher, they will rally the market, pour even more money in, then it will tank.  Well maybe not tank.  Maybe it will pullback slightly and then continue higher.  Sell in May and go away wasn't the thing to do this year.

 It's now very clear that the Fed will maintain monetary policy as long as data supports their position in purchases/ QE.

 Once the data, especially labor-market data, gets to a data point that the Fed will want to begin warning of imminent policy change, traders and investors will reverse their strategy and begin treating good news, such as jobs data, as bad news.

 There will be a battle between those that go long and those that short the market when they see the slightest hint of stocks giving up.  The stock market is well overdue for a pullback/ correction and Shorts know that.  Watch Longs or Short to see who can win the day.

 Bernanke's latest press conference could be categorized as somewhat hawkish as adjustment, or tapering to policy bond purchases could happen rather quickly if the economic recover continues to accelerate.  We could be within months of the start of the tapering process.  This is where the stock and bond markets take good news as bad, from here on out.

 Lackluster data will be good for stocks as well as the Fed.  Like a lower GDP than expected and a tempered jobless new claims number will be ideal for the market.  It would tell traders and investors that the recovery is ongoing but it would also hold the Fed back from removing or limiting that IV "sugar" drip.  But watch out for a blockbuster payroll number/ revisions and a move of the unemployment-rate lower as these will help the Fed to begin taper, that would be a sell signal for stocks.

 Earnings are underway with Alcoa setting the stage for a good reporting season.  Markets don't have to worry about the Fed tapering, for at least the short-term, so traders and investors can focus on earning and company outlook/ guidance.

 Market Barometer models downgraded the Short Term Forecast to caution from positive.

 On Monday, August 5, 2013, the afternoon Market Barometer model-run triggered a Short Term Forecast change to caution from positive.  Model data showed weakness in the S&P 500.  The S&P 500 could continue flat until some market moving news.

 Earnings will continue to drive stocks but more volatility can be expected when traders and investors begin pricing in Fed Chief Bernanke's replacement.

 Data also will continue to play an important role but meager data-points will continue to hold the Fed on the tapering sidelines.  But strong reactions can be expected when data is reported stronger or weaker than anticipated.

 If news becomes saturated with tapering-talk from the media talking-heads, expect stocks to react to the downside when the news gets relentless.  Tapering chatter will pick up the closer to the actual tapering action.

 Data doesn't support action by the Fed when viewed by a layman.  But the Fed could begin tapering based on perceived data trends.  Although Bernanke as much as said that the unemployment-rate would have to be well below current levels before monetary policy change- and that hasn't happened yet.

References

*http://www.time.com/time/nation/article/0,8599,1854569,00.html

*http://www.u-s-history.com/pages/h1851.html

*http://www.marketoracle.co.uk/Article40291.html

*http://www.market-barometer.com/Market%20Memo.htm

Publications

*Latin America and Caribbean Economic Outlook http://www.zonaeconomica.com/omar-gomez-castaneda/latin-america-and-caribbean-economic-outloo

*International Economic Outlook

http://www.zonaeconomica.com/omar-gomez-castaneda/international-economic-outlook

*The Commodities http://www.zonaeconomica.com/the-commodities

*GLOBAL ECONOMIC OUTLOOK FOR 2010 http://www.zonaeconomica.com/omar-gomez-castaneda/global-economic-outlook-2010

*Planning your move into Management http://www.monografias.com/trabajos95/planning-your-move-into-management/planning-your-move-into-management

*Marketing & Advertising

http://www.monografias.com/trabajos97/marketing-advertising/marketing-advertising

*Who was Peter Drucker? in /trabajos97/who-was-peter-drucker/who-was-peter-drucker

About the Author

Post-Doctor Omar Gómez Castañeda,Senior,Ph.D

Programa en "Business Management"(Gerencia de Negocios) en La Salle

Extension University de Chicago,Estado de Illinois,Estados Unidos.(1981).

La Salle Extension University Alumni

Chicago, IL-417 South Dearborn Street

Omar Ricardo Gómez Castañededa(Student Number 2747760-100) Class of 1981

http://www.allhighschools.com/school/la-salle-extension-university/999037902

Doctorado en Administración de Negocios,Mención:Dirección de Negocios con el grado de "Magna Cum Laude" de University of Aberdeen International,Registrar Office 560, South Winchester Blvd.,Aberdeen,South Dakota 57401.

Toll Free.(877)2192187.

Toll Free Fax.(877)2134578.e.mail:[email protected]

Dirección Electrónica:http://aberdeen.edu-sd.us.

Este título doctoral está Notariado Legalmente ante la Notaria Pública del Distrito de Columbia, Washington,D.C el 14 de Enero del 2008 por la Notaria Pública,Amy Broxterman y certificada su firma en la misma fecha por el Secretario del Distrito de Columbia,bajo el expediente Nº 185715,siendo la suscrita,

Stephanie D Scout,expidiendo respectivamente la Apostilla de la Convención de La Haya del 5 de Octubre de 1961 donde Venezuela está adscrita a nivel internacional como país miembro.

Traducido y Legalizado el Título asi como las notas en Agosto del 2008 ante la República Bolivariana de Venezuela por el Intérprete Público Venezolano,René Ron Pereira,G O Nº 38040,de fecha 8 de Octubre del 2004,el cual fué registrado en la Oficina Principal del Registro Público del Distrito Capital,bajo el Nº 232,delProtocolo 232,Tomo 7, el 27 de Julio del 2004 e inscrito en el Juzgado Segundo de Primera Instancia en lo Civil de la Ciudad de Caracas,el día 13 de Agosto del 2004,bajo el Número E-6251.

Autenticada la firma del Profesor René Ron por la Dra Sara A Dávila Z,Notario Público Trigésimo Noveno del Municipio Libertador Interino,C.I.V.Nº 12890483, del Ministerio del Poder Popular para Relaciones Interiores y Justicia,según planilla 162984 de fecha 5/9/2008,inserto bajo el Nº 47,Tomo 216 de los libros de autenticaciones,Caracas,Distrito Metropolitano.

Registrado el Título el 11 de Septiembre del 2008 en la Oficina Principal de Registro Público del Estado Lara bajo el Nº 2922,Folio 122,Protocolo Unico,Estado Lara,Venezuela.

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Acreditados EE.UU.

University of Central Oklahoma (OK)

Acreditados EE.UU.

Autor:

Omar Gómez Castañeda