BiggnightsDow Lowest Since 1997 - Under 7,000
March 2nd 2009 19:34
The Dow Jones 30 Industrails Average, one of the premier benchmarks of stock market performance, has fallen below the 7,000 point mark for the first time since 1997, the New York Times reports.
Businesses and investors alike generally prefer stability to surprises, and that's what they have been getting from the Obama administration for weeks. There were promises of no lobbyists and high ethics, followed by exceptions and withdrawal of nominees due to ethical lapses. There were promises of transparency and public discussion of legislation, followed by 1,000 page bills passed by one-party force, no hearings, no public discussion and not even public disclosure of the content until after the bill had passed. There were promises of no pork projects or earmarks, followed by legislation jam packed full of both. And with record borrowing and record spending already in the pipeline, the government has in effect nationalized the auto industry, a huge insurance company (AIG) and at least one major bank (Citigroup).
At the end of this week a new unemployment report is expected to show whether the trend is continuing toward more unemployment, or a leveling off. Either way, not much improvement in the economy is expected.
The world-wide markets will remain in turmoil as long as the largest economic force, the United States, continues to pull legislation out of dark corners and immediately impose new rules on existing players.
Larry Kudlow went even further in his assessment of the Obama plan:
That's very clear. What will happen next is not known. However, Americans have taken to the streets nationally to complain about these spending and proposed budget bills. Commonly referred to as "tea parties" in a nod to the famous Boston Tea Party held in 1773, protestors are calling for less change and more discussion as the Obama administration pushes forward in their agenda.
Businesses and investors alike generally prefer stability to surprises, and that's what they have been getting from the Obama administration for weeks. There were promises of no lobbyists and high ethics, followed by exceptions and withdrawal of nominees due to ethical lapses. There were promises of transparency and public discussion of legislation, followed by 1,000 page bills passed by one-party force, no hearings, no public discussion and not even public disclosure of the content until after the bill had passed. There were promises of no pork projects or earmarks, followed by legislation jam packed full of both. And with record borrowing and record spending already in the pipeline, the government has in effect nationalized the auto industry, a huge insurance company (AIG) and at least one major bank (Citigroup).
At the end of this week a new unemployment report is expected to show whether the trend is continuing toward more unemployment, or a leveling off. Either way, not much improvement in the economy is expected.
[David Dietze, chief investment strategist at Point View Financial Services,] said that investors were also concerned about the message that they were hearing from governments. In Europe, over the week, stronger countries refused to come to the aid of smaller, struggling governments. And out of Washington, he said, the message continues to be inconsistent. The Senate has delayed confirmation of some members of the administration’s economic team, and the government has yet to value the toxic mortgage assets it has accepted from financial institutions.
[snip]
HSBC Holdings, the global British bank, fell 20 percent after saying it would seek to raise nearly $18 billion in new capital from shareholders and shut down its American consumer lending business.
“It’s pretty despondent everywhere,” said Dwyfor Evans, a strategist at State Street Global Markets in Hong Kong. “O.K., there are signs that some of the leading indicators have stabilized to some extent, but it’s at a very, very low level, and we’re not seeing corporate investment picking up, or consumers starting to spend again — in other words, the traditional mechanisms by which economies come out of a recession are absent at this time.”
Economic data and company earnings in recent weeks have eroded hopes that a gradual recovery would start to materialize during the second half of the year. If, as seems increasingly likely, a tangible recovery will not come until 2010 at the earliest, Mr. Evans said, “that means corporate earnings will remain extremely soft for quite some time.”
[snip]
HSBC Holdings, the global British bank, fell 20 percent after saying it would seek to raise nearly $18 billion in new capital from shareholders and shut down its American consumer lending business.
“It’s pretty despondent everywhere,” said Dwyfor Evans, a strategist at State Street Global Markets in Hong Kong. “O.K., there are signs that some of the leading indicators have stabilized to some extent, but it’s at a very, very low level, and we’re not seeing corporate investment picking up, or consumers starting to spend again — in other words, the traditional mechanisms by which economies come out of a recession are absent at this time.”
Economic data and company earnings in recent weeks have eroded hopes that a gradual recovery would start to materialize during the second half of the year. If, as seems increasingly likely, a tangible recovery will not come until 2010 at the earliest, Mr. Evans said, “that means corporate earnings will remain extremely soft for quite some time.”
The world-wide markets will remain in turmoil as long as the largest economic force, the United States, continues to pull legislation out of dark corners and immediately impose new rules on existing players.
Larry Kudlow went even further in his assessment of the Obama plan:
Let me be very clear on the economics of President Obama’s State of the Union speech and his budget.
He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.
That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all — either for this recession or from the standpoint of expanding our economy’s long-run potential to grow.
Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spend ing program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.
He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.
That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all — either for this recession or from the standpoint of expanding our economy’s long-run potential to grow.
Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obama’s left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spend ing program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.
That's very clear. What will happen next is not known. However, Americans have taken to the streets nationally to complain about these spending and proposed budget bills. Commonly referred to as "tea parties" in a nod to the famous Boston Tea Party held in 1773, protestors are calling for less change and more discussion as the Obama administration pushes forward in their agenda.
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