True or False? "Improving Economy is Bullish for the Stock Market"

Yes, it's a trick question. Read on to understand why
 

"Markets rise on increase in US consumer confidence," said a February 28 Associated Press headline.
 

To decipher the meaning of economic reports like this is the bread and butter of "fundamental" analysis. Inevitably, positive data is supposedly bullish for the stock market, while negative economic reports are bearish. But is this accurate?

What a strange question, you may say -- of course it is! Stocks don't fall after good reports, or rise after bad ones...do they?

Well, take a look at these financial news headlines -- and please guess when they published:

>Fed chief predicts economy will rebound despite housing woes (AP)

>IMF predicts an energetic world economy (StarTribune.com)

>Job Growth Strengthens Economy (Washington Post)

>Several Signs the Economy Is Reviving (New York Times)

Did they publish this week? Last week? Last month?

In fact, they published in April-July of 2007. That was right before the 2007-2009 global financial crisis crushed the world markets. 

This DJIA chart (courtesy: Bloomberg) makes it clear just how mismatched the mainstream expectations were with reality:

Hang on -- now read these news items and guess when they appeared (bold added): 

>S&P 500 is at risk of hitting a new low as angst persists (USA Today)

>VIX Premium Shows Stocks Bear Market Lasting 2 Years (Bloomberg)

>Why Stocks Still Aren't Cheap (New York Times)

>"February's consumer confidence numbers were the lowest on record, going back to 1967.

>there can be no market turnaround until the consumer is confident once again" (Forbes)

Perhaps this was an easier guess -- February and March 2009, at the end of the graph above, just as the stock market was about to begin its three-year rally.

The lesson is obvious: The apparent strength or weakness of the economy does not lead the stock market higher or lower. It's the other way around: "Stocks lead the economy, normally by months."

That's a quote from one of the essays by EWI president, Robert Prechter, who researched this subject in-depth. He also called for a "sharp" rally in stocks in late February 2009 -- despite the uber-bearish "fundamentals" at the time.

A 13-Year Trend Channel Line In Gold Sends A Clear Message

By Nico Isaac
Tue, 28 Feb 2012 16:00:00 ET
Hedge funds love it. Housewives love it. And now, pooch hounds love it. On February 26, the world's fascination with gold reached unchartered "terrier"-tory when the scene-stealing Uggie the Jack Russell dog from "The Artist" sported an 18-carat gold bone-shaped tag to the 84th Academy Awards.
 
So, as demand for gold continues to soar, the question is: Will gold prices do the same? Is the precious metal enjoying the benefits of a soon-to-burst bubble -- or, of a bull market without limits?
 
The mainstream finance always looks for price trends drivers outside the markets. Lately, the number one item on that list has been the Greek debt crisis. But as these recent news headlines make plain, the news from Greece has given gold about as much direction as a dog chasing its own tail:
 
>European economic crisis -- bearish for gold? "Bullion was pressured by lingering economic uncertainty after leading world economies told Europe it must put up extra money to fight its debt crisis if it wants help from the rest of the world."  
>European economic crisis -- bullish for gold? "Gold Prices Gain As Investors Eye Europe."  
>Greek bailout -- bullish for gold? "Gold Rallies Strongly On Greek Debt Deal. The marketplace gained increased investor risk appetite as Greece secured its next round of bailout money from the European Union."  
>Greek bailout -- bearish for gold? "Gold Prices Pause on Greek Bailout Hangover."  

Well here, you see a riveting chart of a long-standing trend channel line in Gold that has contained the major peaks and floors in gold prices since 1999. Below is a truncated version of that very chart:

Billionaire Lives : Richard Branson Vs Vijay Mallya

You can't ignore the simlarities in the lives of flamboyant billionaires Vijay Mallya and Sir Richard Branson. In fact, some would say Mallya is inspired by the Brit tycoon. And why not? Branson is the face of his company. As is Mallya for his. Branson's Virgin Group is made up of 400 companies, while Mallya’s United Breweries Group is a multi-national conglomerate of over 60 companies. Both men are passionate about life. Here's a look at the very similar lifestyles of these two billionaires.

Setting Sail: Branson owns a boat called Virgin Atlantic Challenger II. Vijay Mallya’s yacht, The Indian Empress, is his pride and joy.

Fly With Me: Branson got into the aviation business following a travel fiasco during his wedding. Though Mallya’s story of getting into business isn’t that exciting, he nonetheless now commands a huge airline fleet.

Uniform Crew: Comparisons have been made about the way Mallya promotes his airline. What’s most striking is the airhostesses' uniforms. Just a co-incidence?

The Formula One Craze: Branson made an entry onto the racing circuit and recently Mallya made his debut in F1 with Force India. Too much of a co-incidence? The latter says it’s been his dream to own an F1 team. Hope the dream isn’t coming from Richard’s life!

Rich And Famous: Branson is known for his flamboyance and extravagance. So is Mallya. Hot babes, fast cars, endless parties and expensive calendar shoots are common to both these corporate czars. Hmmm... Brother from another mother, are they?

The French Connection: Check out Vijay’s french beard and see the one that Richard sports. It’s identical! Even the choice of shades and their fondness for the colour white is similar. Getting really funny now, ain’t it? There was a time when both had long hair.

Honourary Titles: While Branson has been conferred upon with the title of Sir, Mallya became Dr Mallya a few years.

What if Dr. Vijay Mallya get into Gas Distribution

As everybody know Kingfisher is going with very tough time against their Brand Slogan " Fly the good Times " . Almost 80% of their flights are gounded and they didn't even had money to pay Airport grounding or Maintainence Charges .. Even he don't yet paid salary to their staffs for the last two month, to whom he say part of his family. Two of the Major oil distribution company already stop supplying ATF to Kingfisher and IOC going very tough on Kingfisher .. Kingfisher is paying in advance for every drop of oil.. and all these cash flow coming from Banks not from the operation of Airlines.. Today Mallays also denied to give any personal gurantee to banks on Kingfisher loan ... Weather he is very close to shut this airlines ....! Just Analyse from where the problem started ... its start cuz of 5 star airlines , Negative cash flow , Royal attitude of Mallya , Non availablity of ATF due to shortage of fund ... i think all these are linked together...

A person who has no experiance in Airline industry bought a biggest Private sector airline in India at sky roket valuation ... and dreamt of becoming second Richard Brensson in a day ... But Unluckily, Luck won't help everytime ... every step he move to grow his airlines... his airlines goes two step backward and are now in a position of filing Chapter XII.

You can better analyse difference between some business tycoon , their activities and their Empire.It may be the difference of Kumar mangalam birla or Yash birla , Mukesh Ambani or Anil ambani, LN Mittal or Vinod Mittal.

and What Vijay did for Kingfisher airlines when Kingfisher was really in need of hard cash .... Photo shoot with Naked or Semi Naked models along with his son, Tried luck on Cricket or F1, Throwing party every night , Dreaming that he will blow river of Beer, Demand people of India to be just like their .. Does really Kingfisher need that White and Red combination or this combination was just to compete Virgin Atlantic. Does people of India really afford a Five star airline even for short distance ..

Well I don't think Mallaya will get down so much easily just because of his ego,  but i can suggest him a better business ... what if he put hostile bid on IOC ....just imagine how IOC will distribute gas cylinder and this will happen just because Vijay mallya is "KING OF GOOD TIMES".