Xyrus

Global Stock Markets: In the Grip of Fear?

There is fear driven selling and there is logic driven selling. In this case, thy happen to coincide.

One of the reasons why all these announcements of bailout and such don't sem to have any impact is because there is no truth hat these measures will do anything. That is backed up by the fact that they haven't one anything. Almost as soon as one plan is approved it either needs to be immediately increased or another plan has to be created.

That ends up painting a picture that even our "leaders" really don't have a clue to how large and deep the credit crisis really is. Until they're more certain, people in general are going to sit it out on the sidelines and cash out.

This is as much a crisis in confidence and trust as it is a financial crisis. Face it, the general populace has been lied to many time over the past in regards to the crisis. Firms have reassured their investors only to have to back track weeks later. Banks have reassured their depositors only to have the FDIC come in and take them over.

If people don't trust banks, companies, or their leaders then they aren't going to put their money anywhere near them.

And did I mention that the bailout package was extremely unpopular but was rammed through congress anyway?

Here's the truth. No one knows how bad this is going to get. The Lehman settlement showed us one thing, that things are worse than they seem. Institutions still are not being 100% forthcoming. They will be forced to over the next couple of years, but until that happens the market is going to be a roller coaster at best.

~X~

Tuesday Outlook: Commodities, Emerging Markets

Frankfurt, SA took you out because of your bigoted anti-semetic comments, not because you think the DOW is going to plunge.

There are plenty of people on here who think the DOW is going to crash. The difference is they don't post racist blather on what is supposed to be a financial site.

If you want to spew your narrow-minded views on race and religion, there are plenty of KKK, white-power, or whatever boards for you to post on.

This isn't Seeking Hitler, it's Seeking Alpha. Keep the comments to financial matters and the mods will leave you alone.

~X~

Shrinking U.S.A.

Not necessarily. The dollar dropping is only one symptom of the larger issue: The rest of the world is growing up.

The days of the US being the economic bully are coming to an end. And it couldn't come at a better time. We've become both complacent and arrogant on the world stage. Soon we may actually have to (heaven forbid) do some actual negotiation instead of rattling our economic/military sabers to get our way.

We've been on top for so long that I think we've actually forgotten how to be number one. The rest of the developed world is surpassing us on almost all fronts, from healthcare to education, to internet access.

News flash: We aren't number one anymore. Nor will we be if we keep up with our current socio-economic policies. With our $10 trillion in debt and more piling on everyday, exactly how long do you think our government will last? The GAO paints a pretty grim scenario.

Oh but we have the largest consumer base in the world! For how long? India and China are growing fast. Soon, even that banner will fall.

We've got to stop thinking the world revolves around us and start thinking that we are just one player on the world stage. Until we do, we will continue to marginalize ourselves while the world catches up and then surpasses us.

~X~

Investing Changes Under a New Tax Regime

It doesn't really matter who gets elected, taxes HAVE TO raise. You can probably count on the raises being investment related at the very least.

Or rather, either taxes have to raise or government spending needs to be DRASTICALLY reduced. Which do you think is more likely to happen?

On one side we have McCain, who really has all of the financial know-how of an amoeba. I wouldn't trust that guy to balance his own checkbook, let alone approve national budgets. He rattles on and on about earmarks and pork. That's less than 1% of government spending. The cash suckers are the military and social programs. Well he certainly wants to keep military spending high, and there's no way he's going to get a social cut through a democratic congress (not to mention he'd be eaten alive by the media for cutting social programs in a down market). Regardless, he can want to cut taxes all he wants. It's not going to change the fact that our government is flat broke, and we're crossing the $10 trillion dollar mark in debt.

In the other corner we have Barack "The Messiah" Obama. He certainly is a charismatic character, but charisma doesn't balance budgets. Universal Healthcare? How? Where is the money going to come from? In a couple more decades we won't even be able to handle our current social programs. Raise taxes? That's going to require quite a raise, as we can't even cover what we are currently spending. We could cut military spending (like get out of Iraq); that would get us closer to a balanced budget, but we'd still need tax raises to cover the bill.

In truth, I don't envy the position either would have after the disaster of the last 8 years or so. The most likely candidate that would have had the brass ones to do what is necessary for balancing the budget was Ron Paul. Now, it's 6 one way half-dozen the other. No matter who gets elected you can count on more taxes on the rich and more taxes on investments. By that time the poor won't really have any money to tax, since it will be all spent on food and gas. Best case, count on the rates before Bush made his idiotic decision to cut taxes while increasing spending further burying us in the whole with our future sugar daddy China.

~X~