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Thursday, January 21, 2016

Explaining the Falling Dow

So today we're going to take a break from the Stupidity & Absurdity of wealthy black entertainers complaining about how ultra-extreme liberal Hollywood discriminates against them to talk on the stock market..

On December 31, 2015, the Dow closed at 17,603

As of the closing bell on January 20th, the Dow stood at 15,766

A drop of 1837 points in 12 market trading days (The market was closed both on New Year's Day to celebrate the birthday of refreshing cold Milk..  um..  we mean MLK)

You know if you added 24 points, you'd have yourself a really good year (1861)..  Just a little Civil War jokey there..
And of course people want to know why..

Some 'experts' blame the extremely low oil prices..

Ha!  Yes, let's all pay double at the pump so those with large portfolios in energy can see them grow

Others blame the Fed finally raising interest rates after keeping them artificially low for 7+ years..

Double Ha!  As if a quarter percentage point means much..

And others wish to put the blame on China's economy mess..

Triple Ha!  As if no one in the 'know' knew for months if not years that China has been running a shadow economy and artificially manipulating both its GDP projections and its currency
According to CNN, China is projected to have a 2015 GDP that finished at 6.8% which to the rat traders is a far cry from 10% growth in 2010 (assuming all figures are accurate, which they are not)

But let's pretend it was..  How is it investors get so 'jittery' over GDP of +6.8% from China and yet so jubilant over the US growing at a snail's pace of +2.0%?

The reason the market is dropping is because of the cliche of chickens coming home to roost..

No government, even the US can keep spending endless amounts of money to prop up a stock market that since 2009, does not represent the real US economy
Its like the whole big Powerball phenomenon last week..  The media kept focusing on the $1.5 billion pot that was out there for one lucky winner..

They Never EVER spent a moment to take the time and look at the kind of people buying those lottery tickets.. those on welfare, those between jobs, those who are seniors barely getting by, everyday families struggling to make it as things currently are..

You know.. the Poor & Disenfranchised.
So when you have a stuck in the mud economy during a Presidential regime of a Know-Nothing with the credibility of an elixir pitchman who decided to cheer lead the market spike instead of openly question or halt its out of control spike..

Then add the end of $1.3 Trillion in annual liquidity injections by the Fed which had occurred over a 5-6 year period (In other words, $7 in increased US debt went to pump up the stock market during the Obama years)...

And the panic of deeply greedy, parasitic people in expensive suits and dresses who make their living by investing...

And well, this is what you get..  A nice continual drop.
If the stock market was based on the US economy as it really existed at this moment in time factoring in true unemployment, the stagnation of both wages and government benefits compared to increased cost of living, expansion in consumer and student debt along with US National debt,..

The Dow would be in the 9,200 to 9,700 range.

But 17,000+ and beyond seemed soooo much better..

And everyone was conditioned to root for it to keep going higher even though so few of us are actually invested in it to any meaningful extent  (Sorry Charlie but owning 150 shares in Apple stock does not make you a "playa" in this game)
We are always hoping and wishing and wanting it to keep dropping

And drop n' fall and then drop n' fall some more

Of course its manipulated so much by those in power, it will take much for what needs to happen to actually well.. Happen

We explain it this way:
Let's say you have a really bad heart; it is in need of medical attention and most likely immediate surgery to fix the problem so you will live..

But every time you get that warning pain, you just pop in an aspirin, wait 10min then keep on chuggin' along..

The aspirin doesn't fix anything..  Only delays the inevitable and meanwhile the blockage or decay gets worse and worse and a double bypass turns into a triple or a quadruple...

Do we really need to connect the dots of our medical/economic analogy?
No one wants to fix anything, especially Presidents..

W Bush probably thanked God on a million times the crash occurred when he only had four months left in office.. Then he got to spend the next 7 years sitting at home watching baseball

Obama has only been interested in keeping plates spinning just long enough that whoever wins in 2016 deals with the big Crash while his precious 'legacy' of being a crap President is protected

And whoever wins..  Dem or Rep..

Do they Really understand what he or she is getting themselves into?