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| RUSH: Yesterday, the Dow Jones Industrial Average crossed the barrier 11,000. The media has a way of describing this. We have put together a montage: Fox News Channel, ABC News, CBS News, CBS This Morning, CBS, NBC. Note here, there's a single word that all of these anchors and info babes and reporters used to describe the Dow breaking 11,000. CHRIS WALLACE: We certainly understand it to be an important psychological mark. REBECCA GOMEZ: It's a psychological milestone. MELLODY HOBSON: There's nothing magical about 11,000. It's more psychological. BOB SCHIEFFER: Wall Street reached a psychological milestone today. HANNAH STORM: Big psychological barrier. LIZ SONDERS: It's certainly more a psychological milestone. KATIE COURIC: The Dow is opening today above a very important psychological milestone, the 11,000 mark. Is it time now for you to put more money in stocks?  RUSH: It's a psychological mark? It's a psychological milestone? When we get, what, 1,000 and then 2,000 soldiers deaths in Iraq, those are real, those are grim. Those aren't milestones, those are real, and there's nothing psychological about them, but here's the Dow at 11,000 for the first time since 9/11, and it's psychological. All this is an attempt to downplay the success of the economy. It's laughable. It's the same word. Somebody sends the fax out from somewhere to the media, and they all repeat it. You didn't have to watch one network to hear that report. You could have watched any one of them. It didn't matter which one you chose. They were all reporting it the same way. "A psychological barrier has been broken. The psychological barrier has been reached. It's nothing but a psychological barrier. Should we put more money in stocks?" Katie, why don't you tell people what you do with your multiple millions. You sit there and act like you're getting to work here in a Toyota Prius. Why don't you tell people what you do with your millions. "Well, I'm a journalist. What I do is irrelevant." I know. BREAK TRANSCRIPT |
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| RUSH: Virgil in Griffin, Georgia. Hello, and welcome to the EIB Network. Great to have you on the program. CALLER: Dittos, Rush. Just in response to the montage you played a little a while ago with the Dow topping 11,000, just a question. Back when it topped 10 thousand during the Clinton years, was it also a psychological level, or was that different? RUSH: Of course not. No, no, no, there are no psychological anything in the Clinton administration when it comes to economics. That was all real. It was substantive and it was brought about by high taxes and big government involvement in regulation and business and so forth. This 11,000, that's just a psychological barrier. You, by nature of your question, you understand the answer. Now, here are the details on this. "The Dow Jones industrial average closed above 11,000 today for the first time since before the Sept. 11, 2001, terrorist attacks, lifted by a five-day rally that has sent stocks soaring so far in 2006. 'It sends a signal that the U.S. economy has weathered some pretty harsh storms over the past few years and in recent months,' Art Hogan, chief investment strategist at Jefferies & Co., said of the Dow's achievement. Hogan said heightened clarity about the Fed's rate tightening--" Now what that means is, last week there was a -- or maybe a week ago there was a leak, somebody had read the notes or the minutes of a fed meeting, and they weren't going to tighten any more, they were going to leave interest rates alone for a while. That report, that caused an initial bump. The race to 11,000 was on. The other factor is new investment money from 401(k) and pension funds have contributed to the market's gains in the new year. Art Hogan said we probably can hold onto this 11,000, meaning the 2006 rally, if companies can continue to weather this energy surge, operate in the higher interest rate environment and create jobs, the market should be able to continue this rise. They also claim that stabilizing energy prices and a number of other things contributed to the confidence that is allowing the Dow Jones Industrial Average to grow. The next thing to happen after the notation that this is a psychological milestone, what you'll hear next, maybe starting today since these Alito hearings are bombing for the Democrats so badly, what you'll hear, the media will get economic experts to point out how the Dow Jones Industrial Average has no correlation to the economy in general. There's no relationship how the Dow is doing or the stock market is doing, to how the overall economy is doing. That may have been true years ago. Today it's not. What's the numbers? Something sticks in my head, 56%, maybe more, of the American people are invested in the stock market one way or the other, either their pension plans or their 401(k)s or their outright purchases of stock. You know, it'll be what they'll try to do, but they will bomb out doing this as well. It will look like they're succeeding at first, because you'll think everybody is seeing it and only you are smart enough not to be affected by it, but have faith in your fellow citizens. They see through all this stuff now. BREAK TRANSCRIPT RUSH: Here's Tom in Wilmington, North Carolina. Glad you called, sir, welcome to the program. CALLER: Indeed a pleasure, Rush. RUSH: Thank you. CALLER: Rush, as far as the economy, it's all smoke and mirrors. You gave the answer. It was money from 401(k)s, not new money. They're just taking it and reallocating it and pumping up the market. I'll make a bold prediction. By May, it will be back down to 10,000. RUSH: When will we have the recession? CALLER: By May, your Dow will be back down to 10,000.  RUSH: Well, I know. No, but if we're going to lose -- wait, now, serious, if we're going to lose a thousand points in the Dow, if that's what you think, when will we have a recession? Because George Soros is predicting a recession. Last week some other economist somewhere, the media found one, to predict a recession this year. When do you think it will happen? CALLER: When the Asian world turns in all our debt and crushes our economy, you'll have a genuine recession. Rush, we're $8 trillion in debt. If that was a corporation based on GDP, it would be considered junk bonds. RUSH: What? I didn't hear all of what you said. If what was a corporation GDP? CALLER: If the United States was a corporation, based on our GDP, and having $8 trillion in debt, it would be considered junk status. RUSH: Oh, oh, oh, oh, okay. You're talking about the national debt, not the annual deficit? CALLER: No, that's correct, the national debt. If all the Asian countries that own our debt and keep lending us money wanted to crush our economy, all they'd have to do is sell all that debt off and it would crush our economy. Our interest rate would go up to 20% just like in the Carter days. Rush, don't get me wrong, I'm with you 98% of the time, you are the man, you are a golden. RUSH: Do you think they will do that? Do you think the Chinese will call in the loans? CALLER: I don't know. RUSH: No, they won't. CALLER: They're unpredictable. RUSH: I don't know how old you are, Tom, and I love you, and I respect you, and I heard you say that I'm 98% right, and you agree with me but on this one you gotta part ways. I just want to share a little life experience with you. And I'm not even talking economics here. But since I can remember -- I'm 54, and since I can remember, so I'm going back 'til when I was 15, that's what I really -- well, yeah, this kind of stuff. I remember the Kennedy-Nixon campaign of 1960 when I was nine, but 15, 16, that's when I really, really started paying attention. I can tell you that every year I have heard from somebody that the national debt is going to crush us. It's going to be the end of us. Back when the Japanese owned the most of it they were going to wipe us out. They started buying up various real estate parcels in the country, we're all going to be working for Japanese corporations. It was over. Then we learned the Brits owned a lot, the Brits foreclosed, we were in deep trouble. Now it's the Chinese and the Asians. I've heard this my whole life. I've heard how the deficit is a monster that's going to destroy us. It hasn't. It hasn't in 40 years. And we've been running comparable debt. It wasn't this bad early on. And I know the economic theory is that at some point, like if this were a family, or if, as you say, a corporation, it would all come tumbling down. But the difference is that the rest of the world can't let this economy go, the rest of the world cannot pull out of this economy. They wouldn't have the economies they have were it not for ours. So, yeah, while it might sound dangerous that these people wanted to really end our -- and it's said that the Chinese do, the Chinese and the Iranians would love to team up and wipe us off the earth, and they may have some madmen somewhere in their countries that do, but that's really not the case. They'd like to take us down a few pegs but they don't want to destroy us. I've been hearing about this threat all of my life, and I've been hearing about a lot of conspiracy theories all my life, and they just don't ever happen. I appreciate the call. END TRANSCRIPT |
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| (Los Angeles Times: Dow Jones Industrial Average Climbs Above 11,000) |
