The Market Falls Below 10,000
This can’t be a surprise to anyone, but yesterday, the Dow Jones closed at 9,908.39, falling 104 points from last Friday. Supposedly, the market is falling because of three reasons. One, President Obama wants there to be a bit more regulation in watching what these guys do. Two, foreign markets have been erratic, especially with there being many worries about the Chinese markets and what’s going on in Dubai. And finally, supposedly many of these guys thought that our economic recovery was going to be better than it is, so there had been a lot of optimism, which inflated the market without any proof that it was on its way back, and now it’s falling back to where it probably should have been anyway.
Let’s look at this realistically, if we can. First, President Obama is absolutely correct, and all we need to do is look at how Bernie Madoff and others pulled off Ponzi schemes to realize that the market hasn’t figure out how to take care of itself. If we need more proof, look how far the market fell last year, almost going below 6,500. And finally, what’s with the price of oil, and the way these people speculate on it? Suddenly it’s falling again; why? I’m not mad because I love gas prices coming down, but there’s no real reason for it to be falling now, just as there was no reason for it to have gone up the way it did in the first place.
Second, this reliance on what’s going on in foreign markets needs to calm down. Anyone who didn’t know that Dubai was spending its way into trouble wasn’t paying attention. Anyone who is suddenly shocked with China’s finances and how they do things hasn’t been paying attention. There is literally nothing I see going on that shouldn’t have been expected by anyone who does a lot of stock market work, and that’s easily not me. These brokers take some major chances with our money, get it wrong, then get scared; that stuff has to stop.
Third, economic recovery; come on. I’ve written about this one often enough; unemployment really hasn’t come down, even if the percentage dropped, because there are no jobs. Jobs keep getting lost and there’s nothing replacing them; just where was this economic recovery everyone keeps waiting for supposed to come from? That, plus banks keep closing, foreclosures keep occurring, and there’s still this big negative prediction about the commercial real estate market. These guys are consistently grasping at straws; if we, the supposedly uninitiated, can figure this out, why can’t these high priced traders?
Wehre will the market go fro the rest of the week? I’m not sure, as I’ not a broker. I will say this, however. If it falls throughout the week, I won’t be surprised. After all, it seems like these guys are more like lemmings than true evaluators. And, truthfully, I think the market’s high was false anyway, so maybe it needs this bit of readjusting to get back to where it was supposed to be in the first place.