The biggest problems I see are the Federal Reserve propping up banks that still have enormous exposure to bad debt, and the Treasury continuing to borrow gargantuan sums of money to pay for unsustainable levels of spending.
Those things are problems, but a bigger problem may be the amount of additional uncertainty or risk that Obama and Pelosi’s Marxist Posse have introduced into the market. Who will Obama’s intervention and thuggery hurt next, and who will be helped? What sectors of the market will be hurt the most by the massive tax increases that must follow Obama’s insane spending? What companies will be hurt the most, and who might benefit from cap and trade, Obamacare, and amnesty for illegal aliens?
There is no way I will put new money in the market until these risks are eliminated or quantified. Yes, earning one-half of one percent in a money market fund is slowly destroying what my wife and I have accumulated over 40 years, but I cannot afford the risk created by Obama and the other Marxists now in control in Washington.
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Here's the underlying problem: Bernanke and the Government are throwing literally $250 billion a quarter down the toilet simply trying to prevent an all-on deflationary collapse.
Unfortunately that "prevention" only works so long as the $250 billion a quarter can continue to be spent - more than $1 trillion a year in annual deficit that must be continually added by borrowing from the Chinese and Japanese EACH AND EVERY QUARTER or THE SYSTEM WILL GO RIGHT BACK INTO COLLAPSE.
How long can this continue?
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