The fierce urgency of market free-fall
03/02/09
Well, we must be eternally grateful that we got that "stimulus" bill rushed through Congress at the speed with which Lindsay Lohan plows through "ladies night" drink specials at whatever be the posh, must-be-seen club de jour. And after having read as much of it as has Lindsay Lohan.
So far, the markets are just loving our multi-trillion dollar spending binge that we called "stimulus" and the new multi-billion dollar pork-package that Obama is current hawking:
The Dow Jones industrial average plunged below 7,000 Monday for the first time in more than 11 years as investors grow even more pessimistic about the health of banks, and in turn the economy.
In short, it's going down faster than Paris Hilton in... well, you get my drift. Enough with the bad faux-celebrity potshots.
So what's driving the markets down? Here's one thought:
Investors are fleeing financials after the government said it would give AIG another $30 billion in loans, besides the $150 billion it has already injected into the company.
More government money means more uncertainty, more panic and thus a plummeting Dow. Fascinating.
And now for the uplifting news:
As bad as things are, they can still get worse, and get a lot worse," said Bill Strazzullo, chief market strategist for Bell Curve Trading. Strazzullo said he believes there's a significant chance the S&P 500 and the Dow will fall back to their 1995 levels of 500 and 5,000, respectively.
Here's where I'm going to violate my William F. Buckley rule of prognostication (that is, I do not predict things which I do not wish to happen): In one month's time, the Dow will be at 6000 with no signs of any turnaround. And this will be mainly driven by the insanity of the newly proposed multi-billion dollar omnibus spending bill, that will most likely - as was the case with the "stimulus package" - will be monitized. Meaning that we're just going to print the money to pay for it. Further devaluing our currency.
I can't help but ponder the irony that, in the 1980s, President Reagan helped to expedite the end of the Soviet Union by spending them into oblivion. And now, here we are today, spending ourselves into oblivion. And in doing so, we're moving towards a form and system of government more similar to that of the Soviet Union.
It's enough to make one mad. Kind of like we saw last Friday as irate Americans tea partied across the country: