Wake-up signals from Wall Street

Experienced money managers are puzzled by the stock market's untypical behavior. Normally, stock prices rise in anticipation of recovery and profits from Fed easing. This time it did not happen. Months into the recovery, it still has not happened.
Investors Business Daily, the Los Angeles financial newspaper that studies the market, noted last week that the stock market is usually led by newer issues, "stocks that have come public in the last eight years" and that bring "new products, new services, new technologies and new ways of doing business."
One problem is the dearth of initial public offerings. For the past 18 months, initial public offereings (IPOs) have been averaging eight per month. When entrepreneurs are afoot, IPOs run eight per week or per day.
Where are the entrepreneurs? What is holding them back? Are they deserting the United States because of class-action lawsuits, high taxes, regulatory restrictions and global considerations? Are entrepreneurs stymied by the anti-business climate attributed to accounting scandals?
The Fed's magic has not worked. Policymakers should focus on finding a way to give incentivizes to entrepreneurs.
The missing stock market recovery could turn out to be a bigger crisis than terrorism for the Bush administration. Bridgewater Associates points out that foreign investors are heavily overweighted with U.S. assets at a time when financing the massive U.S. trade deficit requires about 75 percent of the capital exports of the entire world.
In recent months, the dollar's value has fallen. The new European currency has risen about 10 percent against the U.S. dollar. Even the Japanese yen has risen against the dollar. Why should foreigners remain heavily invested in nonperforming U.S. assets when the dollar is also declining, thus magnifying their losses?