Apocalypse Dow

madoffToday was a spectacularly bad day for the stock market. This Bloomberg story sums it up quite nicely. Sadly, I believe that Wednesday is going to be far worse for that is the day that The Fed is scheduled to release its famous Beige Book report. I’ve been watching this reporting with great interest because every time they unveil the current economic conditions the market tanks. I can’t imagine that it’s going to be any different this month, and since we’re already WAY down I can only imagine the worst this month. Because of this my new investment strategy is to invest only on the days that The Beige Book report gets released. At the closing bell on Wednesday we will know if my “system” has any cred.

Nobel Prize winning Economics Paul Krugman wrote in his Times column today that our current economic situation has gone way beyond a sub-prime crisis and can be more accurately described as a “global debt crisis.” This is what happens when too many people live large for too long a time on borrowed money while there is little oversight. Behold the end of Reaganomics… Lucky us.

In the beginning we had Gordon Gekko who epitomized the bravado of the financial sector during the 1980s with the phrase, “Greed, for lack of a better word, is good.” Little did we know at the time that old Gordon would morph into a reality even more insidious than the fiction behind him as time marched on. If Gordon Gekko and the movie “Wall Street” marked the dawning of the end, then Bernie Madoff singlehandedly embodies the fruition of the deregulation and excess that decades of greed and selfishness have brought upon us.

2009 is going to be a real bitch…

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~ by Woeful on March 2, 2009.

10 Responses to “Apocalypse Dow”

  1. Libraries will soon be thriving- no one will be able to afford to buy books! (if you forget about those budget cuts)

  2. Hi Woeful,

    Thought you might find this interesting….
    http://www.newsweek.com/id/183670

    Canadian banks are strong. Yes, they suffered losses, just as all banks have done, but they are still in the black.

  3. Yeah, but those Canadian banks are using play money.

  4. Hello Roaf: Thanks for commenting man. I wish I was there in Tokyo with you for a few days so we could get good and sauced together like salary men!

    Welcome KC. I don’t know a lot about Canadian banks but if they’re solid good for them! That’s no small thing right now.

    Hi Gerard: Welcome to the party. The Canadian dollar is about on par with the US dollar these days so those days of “play money” are over. That said, the strength of the US dollar as of late has once again proven that the greenback is still king! There is good and bad in this, it’s bad for what few factory workers we still have… It’s good if you have a trip planned to London though! Keep reading.

  5. Well, so much for my “system.” Don’t get me wrong, I’m glad the market gained ground yesterday, but I really thought it was going to tank. Despite the Fed’s bad news the market held and even gained. Maybe this is because of the exceptionally bad week overall that it didn’t tank, I dunno? I’m not giving up completely on my system until we see what happens on April 15th (the next time the report is due). Yesterday might have just been an anomaly.

  6. That’s because you are using play money.

  7. Tell that to the bank… “When I said ‘firm offer’ I really meant flimsy.” Somehow I don’t think that’s going to fly.

  8. Hey Gerard, I thought it was me using the play money… 😉

    KC

  9. I think Gekko might have been too simplistic about greed, but he did draw the line at profit–which is more than I can say for the bankers, traders, and Wall Street hotshots who contributed to the financial crisis.

    Gekko would have sneered at people like Madoff who got rich at the expense of even their own shareholders.

  10. I almost renewed my library card because I need some books and while I prefer owning over borrowing I just don’t feel like I should part with what little money I have left!

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