> If Nasdaq takes a similar path of the DJIA of 1929, then we still have a
> long way to go down.
Interesting graph.
The war is an incredibly bad explanation on any given day of how or why the stock market 'behaves' as it does. It is merely something the media can use and thinks it understands. So, CNN, CNBC, etc. go about finding shallow stock analysts who have nothing deeper to blame for market weakness than war.
Aside from high corporate debt, non-existent profits and other things you mentioned - a major reason for the continued market deterioration is the deregulated state of the most highly leveraged sectors - finance, communications and energy. Deregulated from both a practical and balance sheet perspective.
Regulation for these debt-heavy, balance sheet-murky industries has been summarily destroyed since the mid-80s though the late 90s via a series of deregulatory acts supported by free-market politicians spouting the virtues of competition.
The only, and I mean only, piece of deregulation that stands in the way of today's environment being an exact copy of that of the 1920s, is the repeal of the public utility holding company act (PUHCA) of 1935 that kept utilities from stacking their balance sheet with non transparent investments in non-utility assets. Though, all the faltering energy companies have found so many ways around that piece of regulation anyway.
Other that that, from telecom deregulation to energy deregulation to the bank holding company act of 1984 to the repeal of Glass Steagal in 1999, the last 5 bi-partisan governments has recreated the 1920s.
Only this time, the debt levels are higher, the default rates are higher, the bankruptcies are greater in volume, and the financial instruments and ways to manipulate balance sheets and hide losses are slightly more complex. Also, the recent spate of mergers these acts fostered were more global in nature.
The markets will continue to go down, because there is nothing on the horizon to meaningfully change or control the environment in which Wall Street and Corporate America operates.
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