Thursday, October 09, 2008

The landing place for equities

If someone was doing a pool, I'd say about 7000 - 7500 for the Dow and the TSX. That may be generous.
That's taking the pre-1987 crash Dow of 1300, multiplying it by an inflation rate of about 4% compounded, with a little tossed in for national polulation growth and technology.

It might have been smarter to start with the 750 post-crash Dow and using the same process, but if the Dow went down to 3500 we'd all be eating dirt and living in cardboard boxes.

I see Harper is using the "Dion is too scary" ads to attack him for the economy. Tories, though, are the wrong people to elect at the beginning of a recession. Tory ideology prevents them from doing what needs to be done to get cash moving through the economy. A Harper government would make things worse, not better.

2 comments:

Anonymous said...

With a minority, do you think the Tories can be strong-armed by the opposition parties to implement an infrastructure program?

Ottawa Watch said...

Probably, once the government is in deficit. First, though, the Tories will try to make spending cuts to stay out of deficit, but they probably won't work.

I think you may see EI being the big issue in the nexy election, to the benefit of the NDP. The Chretien Liberals made EI a useless program and a $20 billion cash cow. The Tories won't change anything. Nobody noticed when jobs were easy to get.