Friday, October 16, 2009

Dow 10,000...again

Greetings good citizen,

This morning the Dow dropped over 100 points on poor earnings reports from BOA & GE…so apparently the entire banking sector, despite trillions of taxpayer dollars, is not the ‘picture of health’ the pundits would have you believe…

Of course, there could be another explanation as to why this bizarre market is selling off and some pundits even pointed to this on TV…it could be ‘profit taking’. Which begs a rather bizarre question; if the rise in equity prices is, er, ‘imaginary’, are there any profits to take?

Sadly, there are…and the people who ‘pay’ this imaginary ‘win’ happens to be the people who didn’t exit fast enough. This is usually people who weren’t aware they were even in the game in the first place (like the US taxpayer,) so it never occurs to them to run for cover…

Left for debate here is whether or not this is ‘fleecing of the public’ is actually a crime…I would posit it is but I’m not the one who gets to decide such things.

Worse, some claim the government is ‘complicit’ in the ‘funneling’ of taxpayer funds into the stock market to boost ‘consumer confidence’ in the economy…so prosecuting this type of theft could prove ‘problematic’ to say the least…especially when the guilty can claim they were only doing their ‘patriotic duty’. The fact that the strategy failed (despite making them richer) had nothing to do with it, they were only ‘trying to help!’

Without further adieu, we proceed to tonight’s offering (one of four posts offered by [Hat tip: Financial ]

Wednesday, October 14, 2009

Why the Dow Broke 10,000, and Why You Should Still Watch Your Wallet

How did the Dow break 10,000 when the rest of the economy is in the toilet?

1. Corporate earnings are up -- mainly because companies have been cutting costs. Payrolls comprise 70 percent of most companies' costs, which means companies have been slashing jobs. In the end, this is a self-defeating strategy. If workers don't have jobs or are afraid of losing them, they won't buy, and company profits will disappear.

2. Federal borrowing has filled the gap that consumers and businesses created when the latter began to reduce their debt. Federal debt, in other words, has kept the economy from tanking. Can't keep up forever, though.

3. With such horrid employment numbers, Wall Street figures the Fed will keep interest rates low for some time, and continue to flood the economy with money. That's good news for the Street because it means money stays cheap -- and with cheap money the Street can make lots of bets on almost everything under the sun and moon. As a result, the Street's earnings are way up. But this, too, is temporary. At some point the Fed is going to worry about inflation and a falling dollar.

4. Investors of all stripes want to get in early and ride the wave. Pension funds, mutual funds, and other institutional investors figure the bull market has more oomph in it because, well, other investors will jump in. Think Ponzi scheme. Nice for now, but watch out if you're one of the last in. [It’s far worse if you’re one of the last ones out!]

In other words, this is all temporary fluff, folks. Anyone who hasn't learned by now that there's almost no relationship between the Dow and the real economy deserves to lose his or her shirt in the Wall Street casino.

posted by Robert Reich | 5:21 PM

Sadly, it isn’t John or Jane Doe who is getting taken to the cleaners by this fake market…it’s you. You and your kids will pay for this fiasco for a real long time…IF, by some evil twist of fate, the corrupt weasels manage to stay in power and prevent (or kill off most of the surplus population) before it collapses over the next fifty or hundred years.

To be honest with you good citizen, I don’t think ‘saving the dollar’ is part of the plan. The people who are throwing the rest of us into our own cesspool already have everything they want, they don’t give a crap about how you will survive on 10% of your 401k account.

How do I know this? Well, in case you weren’t paying attention, the same folks being paid the huge bonuses (that are pissing everyone off) ‘looted’ YOUR retirement account LAST YEAR by convincing YOUR FUND MANAGER to buy their WORTHLESS DERIVATIVES in exchange for the CASH you deposited!

Okay…relax and take a deep breath, that was then and this is now…although you know nobody was (nor will be) prosecuted for robbing you blind, virtually guaranteeing what passes for your (shockingly brief) retirement will be spent in abject poverty.

Not to rub salt in an open wound, good citizen, but these are the same ‘patriots’ who are robbing your children of their heritage in a feeble, quixotic attempt to ‘save’ the economy they themselves sold out from underneath us…

There’s no ‘candy coating’ this one no matter how hard you try…we’re talking about the most colossal cases of ‘treason’ ever committed in history, one that will cost millions if not billions (which is what the treasonous bastards are shooting for) of lives!

Sorry if this seems over the top (although regular readers know this isn’t the first time I’ve taken you here) but you’d have to be seriously deluded not to see what’s going on.

Worse, out of four ‘sources’ denouncing the so-called ‘economic recovery’ heralded by the Dow returning to the 10,000 mark, none of them got it right.

I find it a bit daunting to have arrived at a conclusion so distant from that of my peers but that doesn’t alter the facts as I see them.

It also doesn’t make me 100% correct, there’s still plenty of room for error in my assessments and I’m one of the first to hope to hell I’m wrong…I hope I’m wildly, way out in left field wrong. But it’s not looking that way.

Thanks for letting me inside your head,


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