Monday, August 8, 2011


There are a few posts that I'll post later today, but I wanted to comment first on what's been happening in the markets today. Simply put, all of this is very predictable.

Back in April of 2010 market players (and Washington) were going "goo-goo, ga-ga" over the stock market because it hit 11,000. At this time (a little before 10:30 am PST) "the market" appears to be in a state of panic because the Dow is heading downward towards 11,000 in part because Standard & Poor's down graded America's credit rating from AAA to AA+ after last week's GOP-led debt ceiling clown show.

As I pointed out back in April, if you don't fix what caused the market to collapse in the first place (deregulation, a culture of debt, and unabated speculation and gambling on Wall Street), and even encourage more of the same, "the sh*t will hit the fan." Guess what? Today, it's hitting the fan.

But there's more. And it should give everyone who cares about America cause for concern.

Over the past three years Washington has tried desperately to fix our market mess by putting a band-aid over the problem. Specifically, we've engaged in a money drop on Wall Street. As I pointed out when I discussed how the banks don't trust one another, and then explained why "I'm a Market Guru," what's actually been propping up our markets has been legislative gifts and the federal government's trillion dollar money dump (which market players like to call Quantitative Easing because Bailout-Plus sounds too welfarish).

In essence, we've been papering over the cracks with tax payer backed bailouts and favorable legislation, and it's starting to show. If we had dealt with the real causes behind the market collapse in 2008, what we saw in Washington last week would have been just another side show. Instead, the GOP-led stupidity we've been watching the past few months is accelerating the beginning of the end of America's exorbitant privilege.

What this tells me - and should tell every American - is that America's fortunes are being held hostage by political ideologues and financial terrorists who don't understand the difference between policy (i.e. Keynesian) tinkering and corporate welfare. And it's killing our economic paradigm.

But wait. It gets worse. We've seen this before. All of it. History is whispering in our ear, and it's not pretty ... as I wrote in this post last year.

I'll have more to say about this later, but President Obama is going to speak about the mess any time now.

 - Mark  

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