Dow below 8000

Posted by Chris

I hope all of those middle class morons who pulled the Big O lever are happy. The Market has dropped like a rock since BarryO's election. Why??

1. Maybe the markets don't like the idea of a Marxist/Socialist in office. Yes Virginia, Obama is a Marxist Socialist. His Parents were Marxists, His mentor was a Marxist, he was the most liberal senator in the congress, His speeches and written word indicate that. Markets are afraid of the implications
2. Uncertainty drives stock prices down. Investors pull their money and put it into hard assets such as gold. Some of them will take their money and move it and themselves offshore.
3. The mortgage crisis, created mostly by democrats and their liberal policies, has become one of the first dominos to fall. Congress decided to buy votes with our hard earned tax money by literally giving homes away to those who could not afford them. Lenders were afraid to refuse mortgages to people who had no business borrowing the money.
4. There is some blame to be placed on 'corporate' greed and mismanagement.
5. Once the bailout trough was available, everyone is asking for some. The automakers have had to endure skyrocketing union wages and conditions as well as vacillation federal policies. Guess what, they are in trouble?
6. There is fair about the Supreme Court appointments. Right now a lot of decisions go 5-4 or 4-5. With just one radical appointment, the supreme court turns into a wet dream for trial lawyers but a nightmare for business.

The markets know what 52 percent of the American public did not know or consider. One candidate had a record of stablility and over 22 years of Military experience combined with over 20 years in the Senate. The other candidate had 143 days in the US Senate and no executive experience. He inflames that with a history of marxist/socialist leanings.

One thing I am afraid of is that there are a lot of people out there, especially the 'yes we can' and 'change we need' crowd that are in denial about the economy. Once people start figuring out how much the economy has tanked, there might be some backlash. I was at a business card exchange and was talking with a Financial advisor. This guy has clients with 6 and 7 figure investments. I mentioned that our son had asked if the market could ever go to zero. I explained that it most likely wouldn't but it didn't have to go to zero for a breakdown. However there was the possibility of hyperinflation similar to the Weimar republic or Zimbabwe. The Fund advisor looked straight at me and said "You know Chris, the scary thing is that only one of my clients has asked about hyperinflation". So, we literally have millionaires out there that aren't versed in history. I guess that is a good thing. If the economy can be turned around, and there are a lot of reasons it can, then they will end up blissfully unaware of their narrow escape.

What will happen?

No one knows for sure. However, we need to look at the possibilities and a couple of scenarios

1. Obama realizes he is in the big leagues. He has to drop the nonsense about restructuring basketball playoffs and restructuring the olympics as the obmalympics and actually start doing things. the right things. He will have to go middle of the road with his cabinet and supreme court pics. He will have to make that clear through actions and press conferences. Essentially he has to publically disavow his marxist roots. IF he does that, there is a possibility that the markets will stabilize. Who knows the numbers, but let's say it plateus at 5000 and begins a steady climb.
2. Scenario 2 - We keep diving like the USS Thresher. At some point we reach 'crush depth' and the economy implodes like Argetina. We have a breakdown in society, possible martial law and possibly worse.
3. Scenario 3 - The government just starts printing money and we end up with hyperinflation like Zimbabwe or the Weimar republic. That will also create a huge mess.

Keep in mind that many believe that government attempts to tinker ended up extending the Great Depression. Let's hope that Obama and his advisors realize that he can make a difference at this point and undo some of the damage.