More Than Just Fed 'Window Dressing'

Twenty-four hours after Ben Bernanke notified global markets that the Federal Reserve Board's “uncertainty about the inflation outlook remains high”, trading in US markets responded.

Like the 1968 Tet offensive against US troops in Vietnam, or terrorists’ mortar shelling of the Green Zone in Bagdad, or for old timers, the Little Big Horn when George Custer and Geronimo moved things around to meet, Thursday’s action became a massacre. The DJIA dropped 358.41, while the S&P loss 38.82, falling to 11,453.42 and 1,283.15, respectively. NASDAQ closed at 2,321.37, down 79.89. Treasuries rallied across the board, the 2 year note closing with a yield of 2.66 and the 10 year moving to 4.03 percent. Commodities advanced reflecting more confidence in future inflation and a weaker dollar than a robust effort to thwart rising prices. Both developed and emerging countries are experiencing decade and multi-decade inflation figures highs.

Because this is the end of the month and end of the quarter, some say that window dressing took place on Wall Street. With decliners leading advances 2,742 to 473, and 41 new 25 week highs versus 409 new 52 week lows, window dressing alone seems doubtful. I predict businesses will find it tougher making money in the third quarter. Not only are consumers tapped out but they are also fearful of the economic future. Analysts are being forced to lower second half earnings estimates; however, the first iteration is never the last. I predict inflation will be undervalued in the new earnings projections. This upcoming Fourth of July holiday, friends and family will come together, compare notes and swap stories about Main Street woes around food, drink, expressions of patriotism, and election year political debate. As they bid one another goodbye, the summer of 2008, dressed in a sluggish growth outfit, with matching .2 percent core inflation accessories, will be waiting to hitch a ride.

I wish this were a Grimm fairytale. But it is not.

Comments

[ArtfulDodger:]

No, you're right it is not a fairytale, but if it were the American people would be Little Red Riding Hood, and the government the Big Bad Wolf.

No hope in the long run to save our nation, as we've known it.

For as long as so many people want to keep leftists in power so that they can create more government to combat the problems and disasters that their government programs and legislation caused in the first place, we are eventually doomed economically.

And government bureaucrats do this over and over, but always wiggle out of what they've done by blaming private industry (Big Oil, Big Pharma, and the like, and of course a bogeyman such as Bush or Cheney or Rove), and the people for what they have brought about.

With the help of the Marxist media, the people then yell for the government to do even more, thus causing problems that will have to be faced in the future—and that means more government rules, regulation, and legislation that brainwashed parrots scream for.

And clearly, it doesn't help sending our forces around the world to carry out other nation's wars for them. You can't blame Bush for all of this either. The Dumborats in Congress voted to go get the Toy Tiger in Iraq (except for the members of the Black Caucus, which only votes for bills to punish American businesses and individuals); and Bush didn't put troops and bases in over 140 nations around the world. They were there when he took office.

Meanwhile, America has an invasion from the south, crashing stock markets and the dollar, along with hyper-inflation, declining property values, exploding crime (see Sean Hannity's America from Sunday, June 22, `08), and energy and food prices nearly equalling Germany's in the 1920s.

Enjoy the ride, especially those of you who're calling for even more leftists to take over so they can create more government to punish businesses and anyone else who is succeeding in the private sector.

Parasites engender more parasites of different types, because when one begins its feeding, it weakens the host, which invites even more suckers to the party. The host soon withers to nothing. Consider the American people the host.

2008 Jun 29 03:56 PM