Sep 29 2008
Continued Saga – Desperate People Do Desperate Things
So what do I think at 8:00 p.m. on Monday, September 29, 2008, the day the DJIA dropped 777 points and a reported $1.2 trillion dollars has been ‘lost’ from U.S. Investment Accounts? Here is what I think from my 20,000-foot view:
1. Few people have a 20,000-foot view, and most commentators speak from a ‘vested interest position’. Witness ABC News tonight. Who spoke negatively about the failure of Congress to pass the Bill – money managers who saw their client accounts erode today, and with that erosion, erosion of their fees.
2. I am surprised the Bill did not pass, given the ‘fear mongering’ that was built into its passage.
3. Had the ‘Bail Out’ Bill been passed by Congress this afternoon, it would have resulted in a ‘tourniquet’
being applied to a severed artery in circumstances where the ‘tourniquet’ would enable the patient to live for a while longer but not solve the fundamental problem that the patient is 90 years old with little time left under any circumstance (read current levels of National Debt, Consumer Debt, Cumulative Net and Monthly Net Trade Deficits, Loss and continuing loss of Manufacturing Job, etc. – see up to date monthly statistics on all of these things at www.stockresearchportal.com under Economic Research on the Main Navigation Bar of the website).
4. The Stock Markets in Asia and Oceania will drop significantly overnight, and the DJIA, S&P and Nasdaq will fall further tomorrow.
5. Oil likely will stabilize, having dropped about U.S.$10 today to U.S.$96, but gold will rise overnight and likely will continue to rise over the next two days.
6. On Thursday the Congress will reconvene, with a probability (as contrasted to a possibility) of being coerced into passing legislature that in substantive form is the same as the Bill it voted down today.
7. At some point, the plight of the U.S. consumer will become broadly apparent, and at that point it will become equally apparent that from an economic point of view in both America and its principal trading partner countries things are going to get worse before they get better.
8. I continue to believe the fact that all this is occurring only weeks before the U.S. Presidential Election Day means that the insiders in Washington truly believe the U.S. Economy is in crisis, and the end of U.S. GDP growth is here or near.
Again, with respect to many of the foregoing points I sincerely hope I am wrong.
The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. See Legal Disclaimer.
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This is the first really cogent explanation or commentary on what is going on. I have thought for a very long time that we have an unsustainable system in the U.S. A system where 70% of our economy is based on consumer spending, and where American workers are actually earning less compared to associated costs, just can’t continue on without the massive amounts of debt we have accumulated. It all finally caught up with us. So I am very afraid that my children will have a much lower standard of living than what I have enjoyed, but see no way out of it really.