NOWHEREMAN

Some Random Thoughts on Deflation

It took 16 years for the DOW to break 1,000 and continue to go up. That BULL run is still intact if you use your straight edge from the 1982 low connect the 1987 low and extend out to the present. That direct line is around 6,000 for the 2008-2009 time frame. It is also a .618 retrace of the entire move above 1000 or 13,300 intraday.

That's my line in the sand, DOW 6,000. To me, going below that point will allow for a repeat of 1929 where the Djia drops 90% from its peak and unemployment soars to 25%.

GM and its unions have made drastic changes on its cost front but those changes were made months ago. The losses they are incurring takes those reductions into account and the economy is supposed to get worse before it gets better. They need the $50 Billion for themselves.

Meanwhile, People are in arms against the Bailouts in the Financial Arena. Without ripple effects, the Financials employ 6.6 Million people. Which is more important? The Fat Cats at the top, Tax the hell out of them. How about the Bank Clerks at the Bottom?

A Bank clerk looks at a GM Union worker the way GM's Unions look at top management. There are a hell of a lot of people who make far less than an assembly line worker at the Auto Unions, including all benefits.

Obama plans to Tax the top 5% and lower Taxes for the other 95%. The Rich are called Rich because they can afford to pack up and leave the country. Who will be the next in line? The top 1% pay 40% of all income taxes.( I'm not positive on this figure, something I read somewhere).

The economy that Obama inherits will be far different than the one he made Campaign promises about. I can only hope he has the ability to Change himself.