By this morning’s global headlines, world financials seem more like a runaway freight train than an economy responding to heroic (if misplaced) attempts at life support.
By now you’ve heard the Detroit bailout bill got squashed by Senate Republicans. This, combined with increasing feelings of toxicity toward U.S. debt from foreign central banks should mean that Wall Street’s usual Friday dose of Dow- and NASDAQ-smack will be withheld, which should produce the kind of withdrawal symptoms that no one but addicts and rehab centers should ever have to see. Or, another possibility is that we'll all see a heartfelt rush to Detroit's rescue on the Hill today that swoops in and saves us from a serious drubbing... putting off the inevitable pain for another five minutes.
World-market stock prices sank all night and U.S. futures are falling off a cliff as I write this. But as difficult as this should be to watch, if Detroit’s denial of funds is any sign of reasonableness taking hold on Capitol Hill suggesting that the never-ending cash spigot might be turned off at some point, then we may actually be able to find a bottom somewhere from which real recovery can begin. Face it, the continued throwing of cash at every outstretched hand is unethical, unrealistic, unsustainable and unconscionable. Given recent events of late that have propped up unfounded hopes of government intervention in every strapped sector, however, I think the guns are loaded for some real trouble… like protests-becoming-riots sort of trouble. I believe we Americans are about to segue into a new, yet sadly predictable stage in grieving the loss of untold trillions of dollars in wealth, that is, the turn from shock to anger. I believe the manifestation of this displeasure with policy makers, white collar criminals and people whose only crime might be appearing wealthy will not be too subtle.
In my opinion, we are in a very, very different and difficult position than that to which we have become accustomed. No one has full information on the size, scope, and scale of this problem, and our coffers are incredibly stretched while Paulson and Bernanke keep wielding 'solutions' akin to experimental drug trials and exploratory surgery with really blunt instruments. One big market accident or one big blow-up in ANY of the unorthodox strategies intended to provide a soft landing to this plane crash could sink the whole damn thing. I don't think I can get too dramatic here.
As news of Detroit’s cash denial sinks in, there are two major business reports due out today that are cause for concern. First, the Labor Department will release its monthly figures for the Producer Price Index (a measurement of the price of goods at the wholesale level) at 8:30 this morning. PPI is expected to decline 2% for November, according to a consensus of economist projections compiled by Briefing.com, following a decline of 2.8% the prior month. Also at 8:30 a.m. ET, the Commerce Department will release its retail sales figures for November which are expected to show a drop in the neighborhood of 2%.
I would not be too surprised to see automatic trading stops kick in today, but as you know there’s been no predictability anybody could count on in daily market numbers for quite some time. There is still some twisted, macabre comfort in the fact that $8 trillion is holding the American market together; that kind of scratch should give us the feeling of normalcy right up until all hell breaks loose.
By now you’ve heard the Detroit bailout bill got squashed by Senate Republicans. This, combined with increasing feelings of toxicity toward U.S. debt from foreign central banks should mean that Wall Street’s usual Friday dose of Dow- and NASDAQ-smack will be withheld, which should produce the kind of withdrawal symptoms that no one but addicts and rehab centers should ever have to see. Or, another possibility is that we'll all see a heartfelt rush to Detroit's rescue on the Hill today that swoops in and saves us from a serious drubbing... putting off the inevitable pain for another five minutes.
World-market stock prices sank all night and U.S. futures are falling off a cliff as I write this. But as difficult as this should be to watch, if Detroit’s denial of funds is any sign of reasonableness taking hold on Capitol Hill suggesting that the never-ending cash spigot might be turned off at some point, then we may actually be able to find a bottom somewhere from which real recovery can begin. Face it, the continued throwing of cash at every outstretched hand is unethical, unrealistic, unsustainable and unconscionable. Given recent events of late that have propped up unfounded hopes of government intervention in every strapped sector, however, I think the guns are loaded for some real trouble… like protests-becoming-riots sort of trouble. I believe we Americans are about to segue into a new, yet sadly predictable stage in grieving the loss of untold trillions of dollars in wealth, that is, the turn from shock to anger. I believe the manifestation of this displeasure with policy makers, white collar criminals and people whose only crime might be appearing wealthy will not be too subtle.
In my opinion, we are in a very, very different and difficult position than that to which we have become accustomed. No one has full information on the size, scope, and scale of this problem, and our coffers are incredibly stretched while Paulson and Bernanke keep wielding 'solutions' akin to experimental drug trials and exploratory surgery with really blunt instruments. One big market accident or one big blow-up in ANY of the unorthodox strategies intended to provide a soft landing to this plane crash could sink the whole damn thing. I don't think I can get too dramatic here.
As news of Detroit’s cash denial sinks in, there are two major business reports due out today that are cause for concern. First, the Labor Department will release its monthly figures for the Producer Price Index (a measurement of the price of goods at the wholesale level) at 8:30 this morning. PPI is expected to decline 2% for November, according to a consensus of economist projections compiled by Briefing.com, following a decline of 2.8% the prior month. Also at 8:30 a.m. ET, the Commerce Department will release its retail sales figures for November which are expected to show a drop in the neighborhood of 2%.
I would not be too surprised to see automatic trading stops kick in today, but as you know there’s been no predictability anybody could count on in daily market numbers for quite some time. There is still some twisted, macabre comfort in the fact that $8 trillion is holding the American market together; that kind of scratch should give us the feeling of normalcy right up until all hell breaks loose.
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2 comments:
So now the Bush administration says it will bail out the auto makers in place of the reluctant Senate. Abraham Lincoln is remembered as "the Great Emancipator". With this and other similar moves, Bush has cemented his place in history as "the Great Enabler". To paraphrase Churchill, The government has chosen between a bail-out and a crash. They chose a bail-out. They will get a crash, later.
I still say Det-roit deserves the failure it is experiencing as just reward for foisting overpriced shitty vehicles on the marketplace.
Last great American car may have been the Superbird. God rest.
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