Maybe the Dow Jones Industrial Average Deserves to Sink

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By Jacob Maslow

Bull RunA lot of the drama revolving around the US Federal Reserve’s interest rate policy boils down to one question: Will the party continue to rage? That’s really what it all boils down to. It doesn’t take a genius to figure out that the US stock market has outperformed most global markets. When it comes to bull markets, we are riding a raging bull. Compared to the depths of the wake of the great financial crash of 2008, the market has rebounded by upwards of 300% to 400%!

Despite all the games registered by the stock market, the reality on the ground is that the US economy is still wobbly. While certain areas in the United States have recovered quite well, there’s still room for improvement for the rest of the country. It appears that there’s still a big disconnect between the billions of dollars being made on Wall Street and what’s happening on Main Street.

With this as a background, maybe it’s not necessarily a bad thing if the Dow Jones Industrial Average continues to slide down. We’re talking about the market shedding a lot of its hyped growth to reflect a more realistic picture of the health of the broader US economy. It seems that a lot of the market players that are pushing the market even higher are simply running on hype. This is always a bad idea. Eventually, economic reality will catch on and prices have to come crashing down. Maybe the US Federal Reserve knows something that the market doesn’t. Maybe the better alternative would be to ease the market slowly towards a more realistic pricing level than what we have now.

In totality of this discussion, maybe a stock market crash isn’t necessarily a bad thing. Maybe it’s exactly what the economy needs at this point in time. Nobody likes a crash. However, a stock market still has to deal with sound fundamental economic realities. Currently, the S&P 500 as well as the NASDAQ 500 is simply running on fumes and hype. This is not sustainable.

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