Friday, May 7, 2010

They gazed down on the village nervously

Japan held its stock market to only a 3% drop Friday by openly dumping two trillion Yen into the market (about $21 B). European markets didn’t do as well and were down as much as 4%. The DOW dropped 300 points early but clawed back up to only 140 points down.

The “facts” from yesterday’s panic are getting stranger as the data is analyzed. It seems six stocks plunged from respectable prices to a pennies and at least one rose to 100 times its normal price. Regulators can and will void anomalous trades. They are said immediately that there is nothing wrong with the system but hacking must come to mind.

The SEC is on Thursday’s market plunge like a hen on a June bug suspecting that somebody made a killing by driving down Proctor & Gambles stock. Perhaps Wall Street wasn’t aware that the SEC is now run by Democrats who have blocked the porn sites on the agency’s computers so there is now bandwidth available to track illegal trades and crack down on market manipulation.

Wall Street was probably calmed somewhat today by the positive job numbers even though they prefer higher unemployment, they are starting wonder if the villagers will come with torches instead of bail outs. They’ve had several of their banks burned in Greece.

Republicans are now seeing their “where are the jobs” chant go the way of “drill baby, drill” and those death panels have yet to materialize. Obama’s successful diplomacy with the Chinese has slowed the exodus of US jobs with China freezing the expansion of factories aimed at exporting to the US and they’ve promised currency reform. Wall Street is floating the rumor that China will renege on that policy with the Greek debt crisis looming but there is no indication from the Chinese that they will. It wouldn’t seem likely to serve China’s interest to change course after all the considerable effort they have applied to shift the dragon to domestic growth.

The 290,000 new jobs sound good but that only covers two months of population increase. It will take twelve years at this rate to replace the jobs lost in the last two years. Since there are plans to layoff 300,000 teachers at the end of May we aren’t gaining much. Big business doesn’t plan to bring back jobs and small business is being squeezed out by big business through imports, out sourcing and wage suppression. Reform will only come when the villagers are mad enough to pay attention to the castle.