Yesterday it looked as if the markets had stabilized in the last hour of the trading and the Asian markets followed by moving up sharply early today, but as dawn swept across Europe things began to fall apart with the markets there dropping 3.5%. The specter of the European banks collapsing and dragging down banks in the US spooked already jittery markets here. The Dow dropped over 500 points or 4.25% and the Nasdaq lost 5%. Today the last hour of trading saw the markets drop sharply, it’s probably not going to be a good day in the far east. The talking point is that the markets are worried about jobs and consumer spending and imply it’s Obama’s fault somehow and not the imminent collapse of the Euro and the world’s banking system.
All commodities were down sharply with West Texas Intermediate crude losing 6%, even gold was down significantly. The USD is gaining strength and the old axiom still applies: “cash is king”. Market newsletters are reportedly advising people to sell and stay in cash, on this advice market volume was heavy today. That’s the good news, heavy volume indicates that somebody is still buying. The market really crashes when there is extremely light volume as no one will buy at any price. If people keep selling, the buyers will evaporate at some point, but the bulk of stocks are held by institutions and they have their own rules or the panic would be worse.
There is so much cash on hand that the big banks are taking advantage of the crisis (the free market of course) and they are charging large depositors a fee for holding their cash. Remember when you put money in the bank and they paid you?
The stock market maybe heading for the center of the earth but the companies that the stock represents are doing just fine with last quarter profits way up and trillions in cash on hand. If you are a CEO there is nothing to worry about, if you are in the bottom 99.9% things are getting interesting (in that Chinese curse sort of way). A lot of Republicans who think they have some real money will find they are just they are just the right size fish that the big fish find tasty.
Republicans in the Senate have been forced by the public outcry to go along with Senate Democrats to pass an extension to FAA funding until they come back from break. This will put about 150,000 people back to work and will help keep the job numbers from spiraling out of control. (you wouldn’t know the Republicans were involved from listening to the news)
The union killing rules included in the bill by Republicans in the House have not be waived. In fact these rules intended to kill unions in all areas of transportation were already in effect since the Bush Crime Family was given the government to loot by the five Supreme Court Godfathers. Republicans just want the good old days back again and it was the Obama Administration that changed the rules in favor of unions, democracy, and apple pie.
This all was of course simply a grand conspiracy between Obama, the House Republicans and the Senate Democrats to create a crisis based on the pretense of the Democrats of being pro-union. This crisis nearly crashed the economy and may still do that in September once the Democrats have convinced their dull witted base that they aren’t all really working for the same people who control the Republican puppets. (this last paragraph is intended as sarcasm aimed at the cynical left) www.prairie2.com