When does the market bottom out?
What I'm not hearing is the underlying reason for these funky products that came out in recent years. The cure for this is a healthy, robust economy where real wages increase at the levels we had in the late nineties. I don't see that in the cards.
This economy is teetering on the verge of recession and there is not a thing we can do about it. The Fed lowered interest rates-again-and the Dow, after recovering a little bit on Wednesday, plummeted nearly 400 points the next day.
Bernanke is very limited in what he can do. Thanks to the Bush war in Iraq, the US had to borrow VERY heavily to pay for it. To get the loan to pay for the war, the US had to sell treasury bonds. The Chinese and Japanese, among other nations, bought those treasury bonds. And they're not going to buy them unless we can pay them Yield's that are attractive. Which means the Fed can't keep lowering rates-higher rates are what we use to pay the Yield on bonds.
The notes for this unnecessary war are coming due. We'll likely be in a recession this coming year. Further, due to the depreciation in the value of the US dollar wrt the Euro, Yen and Chinese Yuan imports are going to be MORE expensive. Do you think it's any coincidence that the price of fuel has appreciated at the same time the dollar has depreciated?!
Those of you who cheered this war on as one big azz-whooping for THEM (?), I wonder if you're now having second thoughts? Once you realize the real cost of this conflict, maybe you think real hard the next time we are enticed into sending in US forces for a war with questionable justification?! IT'S NOT FREE, THERE IS A COST TO BE PAID!
Like I said, the only way out is a big jump in the economy (GNP) much like the .Bomb years brought on, I don't see it happening. But then, we never do......it could happen.
I'm not optimistic. China is becoming a bigger and bigger factor. They're soaking up raw materials, petroleum and other energy resources at a growing rate. That didn't exist back in the 1980's. And India is one step behind them.
That means the price of raw materials and energy is going to keep on climbing. That means price rises, which means inflation. That pretty much limits what the Fed can do by massaging interest rates to fine tune the economy.
The days when a guy like Greenspan could rule over our economy are just about ended. The US is in a world economy now and we need to grow up and start acting like it-instead of like an ignorant cowboy.
Our bankers are getting tired of hearing how the checks in the mail. FOX video wargames are fun to watch, but when the notes come due all the fun ends.