Monday, August 03, 2009
the Summer of Discontent Continues
Although I remain very skeptical until Obamanomics runs its course and people come back to their senses. There have been some peculiar events in recent weeks that have sent the market upward and onward. Mind you the Dow Jones Industrial stood at 12000 in 2000 so a substantive rally signifying a move toward more openness and individual freedom ie an improved economic picture would be a heavy volume move to new long term highs. However until the growth of government is curtailed and paired back I see little or no chance of this happening.
What’s happening now is that the market is reacting well to the prospect that Obamanomics will have no lasting impact on the economy except for the physiological damage that has been inflicted on the current generation. The second and pervasive trend is the old adage "you cant fall off the floor" . Try ,try and try as you will even this group of 70's generation egoists can’t make things worse ,its just not possible given the totality of the socio-political and economic situation in America.
You see "failure" as a philosophy is finite while success is infinite. History has proven time and time again that when government grows both the economy and equity markets decline or stall. Like it or not equity markets are like the heart beat of a healthy nation . What’s important for a casual observer to remember is the markets react in advance of future trends in the social political and economic environment. It no surprise that this rally began in March when this blogger pronounced Obama as a failed President.
So what are the events ? First I would not underestimate the significance of the 'Cambridge police are acting stupid" remark . For many this was the first look at the "real " Obama without the media filters and political spin. It was a kin to political Hari Kari . Second both "Obamacare" and "Cap and Tax" have been shown for what the truly are a ruse to nationalize and control more of the economy. While the White Houses rhetoric has fallen into repetitive " you'll get what ever you want and we will make someone else will pay for it" seems to be falling more and more on deaf ears as many finally realize that they too will be paying for it . Its as we used to say they have gone back to the well once to often and the public is becoming more and more weary as policy failures continue to mount. The net effect is the continued erosion of poll numbers leaving the White House with a very light bag of political tricks and a very small arsenal of policy options.