Sunday, December 10, 2017

DOW Breaks 24,000!, No, wait, 25,000! No, wait ...

Last month or so has been interesting. The stock market was rising and falling slowly. but in the general rising, then all of s sudden everything took off, with one hundred, two hundred, and three hundred point days. It surged forward with a vibrancy of speculation that almost would lead one to think that a tax bill aimed at putting as much money into the hands of corporations and the wealthy was surging through government, with conservatives, who usually were concerned about increasing the national debt, cheering it on.

And yeah, this is exactly what's happening - the Republican-controlled Congress gleefully abandoned its post, not only declaring that deficits don't matter, but running up the tab on the current one by 1.5 trillion bucks. The Senate voted on its version of the plundering of the treasury in the dead of night, after Friday, on a bill marked up with pen scrawls that they would not let anyone read. The same people who cringed in fright at anything like a minimum wage gleefully shoving money down the pants of the wealthiest members of our society like a frat boy at his first strip club. 

This was such a heady feeling that even news that one of the President's men has turned state's evidence and making clear his dealings with the Russians could only knock off a few hundred points. And indeed, with the deed finally done, the wish list shoved through Congress, they really don't need him at all anymore.

The House and Senate bills were different in many awful ways, and in the week following they discovered they botched the job,but  there is enough pain for the bulk of Americans. The retail apocalypse is still hollowing out the malls, student loans threaten to be the next housing bubble, Medicare and Social Security are on the chopping block to pay for this boondoggle, the rich get richer, and the poor get ... children.

But the end result for a big kick in the pants for the economy, with much of the results unforeseen and still unfolding. Some companies used the humongous windfall to actually raise pay and give bonuses to employees. Some used the money to lay off people, close stores and reorg. Some actually did both. But all this movement of capital and investment creates friction, a heat created from money being shoved from one side of the table to another. And that's what the DOW is giving us right now, a rise of temperature from money being moved from one set of pockets to another.

Wall Street has no longer been connected with Main Street for years now. Now it feels that it has lost full contact with the rest of the universe as well. There are those calling for a "correction", and while the signs are there, it should be another couple thousand before it all hits the fan.

More later,