They say that the stock market is a discounting mechanism and that means it falls well ahead of the bad news. I usually trot out my chart of Enron and point out that it dropped from 90 to 60 and then half of that before the first scandals were made public. The market knew something was wrong. No, not scandal but something. People were selling a bit more aggressively than they were buying and that was enough to send prices /br /Here is a head line from recent news:br /br /U.S. Pledges Top $7.7 Trillion to Ease Frozen Creditbr /br /That’s not million with an M or billion with a B. That’s trillion with a T. T as in toast. T as in tremendous. T as in how much gosh dang (this is a family blog) money can the government come up with before they need a bailout?br /br /No wonder the inflationistas are singing. But that’s not stock prices. Here is a counter argument made by Alan Newman of the Crosscurrents newsletter:br /br /The crash we have already experienced discounted much of what you now believe is /br /Hmmmm. That’s an argument that we will NOT be seeing Dow 6000. I have a different feeling about the stock market these days and while it probably won’t last it does seem that we can, as I wrote in the newsletter this morning, make a little cash to spend on the /br /Just be ready for another bear slide just when everyone breathes that massive sigh of relief.