Dow Drops 512.76
By Shaun Kenney | Thursday, August 4th, 2011 | PolicyTough day on Wall Street, but this is typical for a market correction — Washington sorted out the budget, Europe is in a tail spin, and tomorrow everyone will snap up the bargains.
Gasoline is at $90 a barrel, though. Gas prices are still $3.69/gal… so the more things change, the more they stay the same.
Anyone else feeling the bright, shiny objects in the media? Sheesh… let’s get some real news for cryin’ out loud.
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Shaun Kenney
Shaun Kenney is the Chairman of the Fluvanna County Board of Supervisors, former Communications Director for the Republican Party of Virginia, and an active blogger since 2002. Shaun lives in Thomas Jefferson's backyard with his wife, six children, and a modest attempt at a farm in Kents Store, Virginia.
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10 Responses to "Dow Drops 512.76"
Disagree, I think we’ve been waiting for the second leg down in the market, the one that takes us to 4500 on the Dow and this could be the start of it. Debt bubbles like the one we’ve been living in don’t just fix themselves with a small correction, and this is a bubble that Greenspan and others spent decades building, it won’t be fixed over night. Housing prices continue to fall, and organizations around the planet continue to deleverage. All the past two years rally has done is create a really classic looking head and shoulder pattern on the charts. My opinion (and that is all it is) is that we have a lot more pain to come.
EU contagion risk bears close watching; Bernanke will print if necessary and reopen / enlarge the swap lines.
Next time he starts printing, watch for DOW / Gold parity developing. With Bernanke at the Fed, this could easily occur over 10,000 (yes, I said it). The Fed is in love with the “wealth affect;” it thinks people feel wealthy (and thus confident) when the stock market is high. It will print to support asset prices, but it has little control over where the printed money goes unless it loans it directly to fed dot gov, and then we all know where it goes.
Well yes, fear has served the interests of the republican party quite well, and apparently is the emotion of choice to continue to denigrate the administration. After putting on a show that rivals broadway, with villians, idiots, rants, and impassioned speeches signifying nothing, the conclusion from investors is that Congress is hopeless. As McConnell said, the strategy of default means we will own the outcome. So true.
@Mike —
You’re such a troll. I’m almost a little pleased that we here at Bearing Drift give your life what little meaning it possesses.
@Jamie — Agreed. Problem is, that wealth is being invested overseas… and it’s not coming back to the American taxpayer in the near or long term. Great economic policy if dollars and cents is your metric, but terrible policy if the prosperity of Joe Six-Pack is your #1 concern.
@Temporary –
Agreed. The longer we patchwork the Keynesian economy, the worse the “fix” becomes in the long run.
Thanks for the shout out, Shaun, I didn’t mean to disturb your pre set ideological furvor. And let me amend my last post on this page, to the effect that….”After putting on a show that rivals broadway, with villians, idiots, rants, and impassioned speeches signifying nothing, the conclusion from investors and the public is that Congress is hopeless.
You forgot to add your slam on the GOP motivating by fear, Mike. But that’s OK — public school educations tend to do that to an intellect.
No Shaun, I didn’t forget. I don’t like to over use an important point of emphasis. I know this has been a tough week for those of you who had expected the rush of victory and got slammed by public opinion instead. But hey, have a nice weekend anyway.
Fair enough… have a good weekend, Mike.
So S&P did a downgrade. Wonder if any of those traders on Wall Street knew about that ??
And yes Italy and Spain are causing problems in Europe. Italian PM Silvio Berlusconi is the equivalent of Bill Gates. Wonder what things would be like if Gates was president ??
I’ve read through a lot of comments about the S&P downgrade and the thing that really stands out is how personally so many people take it, I don’t get that. I mean, it is a bond rating, we have a 14 trillion dollar debt, what do they expect to happen ? Do a goggle search on “national debt graph” and just look at a graph of our debt over the years, it isn’t a big mystery.
I think people just don’t like it because it is a bit of reality seeping into their otherwise unreal lives. We can’t keep spending money like this. Period. End of story. You just can’t borrow that much money as a percentage of your GDP and expect life to just keep going on like it usually does.
What is it going to take to get the message through ? The TEA party has tried, bond traders have tried, various councils and non-partisan groups within the government have tried, now S&P has downgraded our debt and the message still isn’t getting through. What is it going to take, a collapse of the currency ? It’ll be too late when that happens.
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