The reality is that markets are volatile and therefore not a direct reflection of any single policy or event. A daily snapshot of the market is not a reliable indicator of any given economy's health - it could jump back up 400 points in the next day given what we've seen over the last few months. Remember individual investors don't cause these huge swings (unless you're Warren Buffet or George Soros), institutional investors do. Right now there are a whole lot of fund managers out there desperately trying to maintain the unrealistic returns their clients have come to expect, and since the bubble has popped, 10-12% +++ just ain't realistic anymore.
Finally, look at the numbers that were released last week - increasing unemployment, crappy durable goods orders, and flat earnings from S&P stalwarts. Of course the general trend for the market is downward right now, the economy is substantially slowing as we speak. But it will come back as it always does, it's just a matter of when.
Substantial tax reform would hasten that recovery, but that would require our fifth grade classroom (otherwise known as Congress) to get off their collective butts and address the real problems instead of this constant showboating for attention during a high-stakes election cycle.
Gonna be a long couple of years on the road to recovery, that's for sure. Just keep in mind that an Obama administration will greatly extend the time before a meaningful recovery can occur.
Absolutely correct assessment. Thank you.
I would add that, here in the real world, the sky is NOT falling. My business has secured a $300,000 loan (actually TWO different banks approved it, I was scared by all the media) secured by commercial property. Quite frankly I thought credit was difficult, I assure you it is not if you have a good business plan. Gas prices will begin their retail plummet next week. I think the detrimental effect that 3% of mortgages being bad is at least equaled by the positive effect that a $60 drop in crude prices will have.
The US economy is in recession, but relative to the rest of the world we're in good shape. This of course is why the dollar is rising, and I think that is more responsible for the drop in crude than lessening world demand. If world demand is plummeting so, why did the last report of US crude stocks go down?
No, there's what's really happening out here, and there's what the media would have everyone believe. Sanity will return to wallstreet.