Well, that's impressive. And by impressive I mean as scary as hell.
For those of you tuning in late, over the course of these pages, I've been tracking the rise and fall of the American stock market. In general, it compares to the real health of the economy in a similar fashion to holding the back of your hand to your forehead to see if you have a fever. It is not a subtle measurement, and will not indicate if you have anything else but a fever. But the ups and downs usually give you an snapshot of general economic anxiety, particularly of the moneyed classes (that is, those with money to invest in the stock market).
Right now, there is a lot of anxiety. After rising relentlessly upwards over the past couple years, despite other sluggish economic signs, the investors are suddenly spooked, which makes for uncertain markets, diving stock prices, and therefore good newspaper articles. It seems to me that there are two things driving this, both with a common root - austerity in Europe and the self-inflicted debt crisis here in the States.
That common root for both is a sudden decision that Something Must Be Done about debt. Actually, that's not a bad idea - we've been on a roll for the last decade or so, piling up a lot of expenses from the previous administration, and a little fiscal sanity is a good thing. And, if truth be told, despite reports to the contrary Democrats actually LIKE balanced budgets and holding down spending. Which may be why you tend to see it in Democratic administrations and not so much in Republican ones.
Now I call the current debt crisis self-inflicted as opposed to manufactured. The amount of debt we're lugging around is a long-term challenge, but attempting to deal with it at a time of economic uncertainty makes a bad situation worse, and is one driven by political manipulation as opposed to economic rigor.
There is a pungency that wafts off this as many of those demanding drastic austerity are the same bad actors that had no problem busting those budgets in the past decade in the name of security, war, and tax breaks for the wealthy. And all of the above are off limits for further discussion. "All must suffer" is the byword for this, where "all" is meant to be interpreted as "you".
I think we will see a yo-yoing of the market over the next few weeks, until the stock market gets another cookie (like, say, telling them that interest rates will remain at next-to-nothing) or three,stabilize around 11,300 and then the slow pressure will drive the prices up again. Unless we do something else this dumb (and what's the chance of THAT happening?).
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