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Whoopee for Stocks. Woe for Government Finances.
Nov 28th, 2008 | 4 responses
This week the stock market saw its largest increase since 1974, five straight days of hefty upticks. This surge occurred at the same time that a consistently awful string of financial and economic news was pouring in, not only in this country but around the world. So why this latest bubble? What spurred the great stock beast to its latest burst of excessive enthusiasm?
The answer is frightening. Really, really frightening. The U.S. government’s latest bailout, this time Citibank, demonstrated to all that any black hole any inept and greedy financial institution has dug for itself will be filled by government officials with control of the ultimate pile of OPM (Other People’s Money), taxpayer cash and assets.
Congress, meanwhile, is fixing to bailout the automakers, bringing back their own share prices. An utterly insane policy since these worthies’ problem is that no one is buying their cars, and this problem will not be solved even if government aid temporarily allows them to continue functioning and losing money.
We’re saving the market and forfeiting government solvency. That is what’s making the market so cheerful these days. Does it make you cheerful?
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4 Responses to “Whoopee for Stocks. Woe for Government Finances.”
Actually, it's hard to see this as more than a blip, Michael. It's been a long slide since the DOW was at 14,000 and clawing its way back almost to 9,000 still leaves most people with pummeled portfolios. Plus, the dismal holiday retail season can be counted on for more bad news and declines. Here's a 2 year picture of the slide, for perspective: http://tinyurl.com/55fq4g
There is no terrorist group that has done more damage to America's vitality than Bushco. True, Congress is pitching in. I think they're convinced we're done for and are carving up the rest of the corpse amongst themselves and their friends and leaving us to eat cockroaches and live under bridges for the rest of our and our grandchildren's lives. While the “evil” left is insisting on bringing jobs home and making healthcare affordable to jumpstart our nation back on its feet.
Up is down, purple is orange…
Thanks guys!
There is no great rescue of Wall Street. The reaction to the Citi early-Christmas-present insofar as its stock price changed, is just barely-looking-past-one's-nose shortest-term behavior by the more stupid among the Herd. Some institutions have been favored while others have been permitted to fail, on Wall Street. It is not an industry bailout, and never was. Giving a bailout-handout to Detroit, which always has been the wrong decision, is not meant to boost stock prices and does not guarantee a “rescue” and revaluation of their stock prices, but to perpetuate their decades-failed model until their promised new state of affairs lets them survive (while giving time to unions to put the healthy auto industry under union presence, and in the meantime go after companies like McDonald's as well as evil giant Wal-Mart). It has nothing to do with an overall bailout of the stock market, or of rescuing the economy. Normal sentiment is against large-scale intervention, anyway (least of all, from Washington), while the Bush administration is now ready simply to hand things off to the Obama administration — even if things _could_ conceivably be improved, why would the Bush people do it, when letting things stay bad or get worse makes it that much more of a constraint on what Obama's team might try outside the scope of economic recovery? Please be patient and want until next year.
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