Didn't I just just a month ago post that the DOW, our hothouse flowers of the stock market, broke through the 14000 mark? That the market was starting to recover from all the messes of the past few years and start making real progress?
Alas, such was not to be. And as much as I want to make a Rupert Murdoch joke about it, the man who Mike Royko once tagged as "The Alien" has little to directly do with it.
The thing is, the market of late has been a Potemkin village, a series of false fronts with not much supporting them on the backside with real progress. A big chunk of the growth has been is sub-prime loans and other chancy ventures. Now we have a reckoning, or as those in the biz like to call it, a "correction" (Doctor Evil quote-fingers apply). Apparently a "correction" is if the stock market loses some 10% of its value. No word on what happens when it gets past that mark.
So of course, these brave financial entrepreneurs take such reverses in stride, and redouble efforts to grow their stocks. Yeah, right. The same folk who rail against government interference go nuts when the market decides to "correct" itself and demand government help. And so the Federal Reserve pumped a lot of money into the system last Friday to "preserve liquidity". And the stock market showed its appreciation by holding steady on Monday before taking a dives yesterday and today. Oh, and the Fed pumped more liquidity in today, but to no avail. Would the Federal Government work as hard pumping out the Gulf Coast a few years back, we might not have these problems.
Oh, and all those sub-prime mortgages, all that bad debt and iffy paper floating around? Your government is backing it up. So even if you're smart enough to avoid these sucker bundled loans and ARMs, your government isn't. Insert standard reference of those who pay taxes bailing out those that don't here, but you know the drill.
The interesting thing is, I've been doing some research on the big crash of '29. This was primarily for my Call of Cthulhu game - we're running Tatters of the King, an adventure which takes place in '28 and '29, but which avoids ALL MENTION of the stock market crash. Making it harder for me, it is set in England, so not only I am investigating the crash, I am trying to interpolate its effects on Europe.
Anyway, the research shows some scary parallels (including market jitters created by rumors that the Gummint would crack down on the phoney-baloney buying on margin practices). The Market hit its all-time high about a month before. slid backwards, fell off a small cliff on Black Thursday (24 October), was shored up by the banks for Friday, and then fell off a larger cliff on the well-remembered Black Tuesday (29 October). And all during this time, any faint economic heartbeat was seized upon as proof that the markets would reverse themselves and things would return to normal.
Which they did. By 1954. So buckle in. This may be a bit of a ride.
Tolkien TV - So, Monday last week rumors that'd been circling around for a few days became official when the likes of The New York Times (Monday) and NPR (Tuesday) wei...
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