Obama claims a record on his first day!
Man, this guy doesn't mess around. On his very first day (1/2 day really) in office President Obama has already claimed a place in market history. This was the largest decline in stocks ever for an inauguration day! What's he going to do tomorrow?
I say that partly in jest since I don't normally give politicians credit for moving the markets, but today could be an exception. The rumors of what the party in power will now do in regards to "nationalizing" banks sent the financials to the woodshed where they were beaten like a rented mule (haven't used that one in a while). That in turn destroyed the markets on this otherwise historic day in our nations history.
There's no other way to say it. The markets are in BIG trouble. The message to me is clear. They will either move much lower now, or make a hopeful double bottom in the next couple of days and rise for a while. After that, they'll resume the move down. Either scenario will lead to much lower prices than we've seen, it's just a matter of the timing.
In this credit driven economy the financials are telling the story, and it's not pretty. No one wants to loan, no one wants to borrow and no one wants to buy. That's game, set, match in our economy. The winds of change have shifted alright, it's just not the winds everyone thought.
The real shift that's occurred is from the "give me all of the debt you can" mentality to the "repudiation of debt" mentality. It's been a long time coming but it's finally arrived. People will begin to turn their backs on debt like the plague. It's a normal part of the cycle really. It naturally occurs following an abusive credit bubble. Now it's the borrowers who feel abused, even though it was of their on making for the most part.
As people and even businesses refuse to borrow like they did, and banks refuse to loan like they did, the Fed and Congress are left to jump up and down pitching tantrums and screaming about how all of this "help" isn't getting into the system. What do they say about leading a horse to water? Perhaps Bernanke should have spent some time on a ranch.
All of this means that we have a system running in reverse. The problem is that it doesn't have a reverse gear....and it's beginning to show.
I say that partly in jest since I don't normally give politicians credit for moving the markets, but today could be an exception. The rumors of what the party in power will now do in regards to "nationalizing" banks sent the financials to the woodshed where they were beaten like a rented mule (haven't used that one in a while). That in turn destroyed the markets on this otherwise historic day in our nations history.
There's no other way to say it. The markets are in BIG trouble. The message to me is clear. They will either move much lower now, or make a hopeful double bottom in the next couple of days and rise for a while. After that, they'll resume the move down. Either scenario will lead to much lower prices than we've seen, it's just a matter of the timing.
In this credit driven economy the financials are telling the story, and it's not pretty. No one wants to loan, no one wants to borrow and no one wants to buy. That's game, set, match in our economy. The winds of change have shifted alright, it's just not the winds everyone thought.
The real shift that's occurred is from the "give me all of the debt you can" mentality to the "repudiation of debt" mentality. It's been a long time coming but it's finally arrived. People will begin to turn their backs on debt like the plague. It's a normal part of the cycle really. It naturally occurs following an abusive credit bubble. Now it's the borrowers who feel abused, even though it was of their on making for the most part.
As people and even businesses refuse to borrow like they did, and banks refuse to loan like they did, the Fed and Congress are left to jump up and down pitching tantrums and screaming about how all of this "help" isn't getting into the system. What do they say about leading a horse to water? Perhaps Bernanke should have spent some time on a ranch.
All of this means that we have a system running in reverse. The problem is that it doesn't have a reverse gear....and it's beginning to show.
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