Investors that sold during the crisis and stayed out have missed a precious opportunity to recover their losses and earn respectable profits in the stock market.
Reducing the budget deficit would increase the rate of growth in the economy, increase corporate profits, buttress the stock market.
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Despite tremendous growth in corporate profits, the U.S. stock market rose just 22% from the end of 2004 to the end of 2006.
After Tuesday's closing bell, Intel issued weaker than expected profits and guidance, pushing the stock down more than 12% in pre-market trading.
After Tuesday's closing bell, Intel (nasdaq: INTC - news - people ) issued weaker than expected profits and guidance, pushing the stock down more than 12% in pre-market trading.
However, in the 1990s, the return of a booming economy allowed government spending cut-backs without harming the economy, which combined with a big surge in tax revenues from rising corporate profits, and capital gains taxes created by the explosive stock market of the 1990s, not only produced a balanced budget, but several years of large budget surpluses.
If this prediction plays out, we should see a stock market sell-off in late 2010 as individuals take profits and sit on the cash.
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Of course, any investors playing in dollars should remember to be hedged because as the euro weakens any stock market profits from Europe will translate into fewer dollars.
That said, General Motors and Chrysler have made huge cost-cutting strides in recent years, and could be poised to make serious profits if car sales pick up and the stock market strengthens enough to boost their pension funds.
It also requires the courage to understand that, while the short-term stock market may require a leader to simply make a return on profits, the society in which they are a member requires much more of them.
In the past, the stock market would rarely show its checkbook to a start-up sans profits.
The trading profits that have been so crucial to the big banks in recent years appear to have been hit as the September stock-market rally was built on relatively low trading volume and trading spreads have narrowed.
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