1 Comment

  1. Retailers post disappointing November sales - MarketWatch » The Politics of Debt December 6, 2007 @ 2:18 pm

    […] November sales – MarketWatch By Franklin | December 6th, 2007 Comments (0) | Trackbacks (0) On November 15 I wrote regarding the November retail numbers: If the news is bad, the Fed will feel justified in […]

Dow Jones Finds A Convoluted Way to Do Nothing

Economics, Finance, Iraq War Comments (1)

Last Friday I wrote that the . I pointed out that some statistical barriers had been broken, and that the fall should stop around there. I was wrong by 0.6%, but not much more. And then, on Tuesday, we had this huge run rally of some 300 points. I did not expect it, I must confess. I announced and expected a flat week. And then, the Dow lost most of the rally gains between Wednesday and Thursday. What a weird way to go flat…

As I write this on Thursday, the Dow is at 13,110. Barring a surprise government move (rate cut, or any other measure to inject liquidity into the markets) the next meaningful move should be down to re-test September lows. Next week is Thanksgiving Week in the US so I would expect more flat (“volatilely” flat perhaps?) markets until after Black Friday, which may bring or not bad news from retailers.

If the retailers’ news is good it will be due to the injection of liquidity into society through credit card debt (I am preparing an article about it, but the gist of it is that today it is cheaper to get a 2 year or even a 3 year credit for $10,000 than to work to earn that amount), which will be taken as good news but will mean only bad news down the road.

If the news is bad, the Fed will feel justified in declaring that the risk of a recession is higher than the risk of inflation, and lower the rates a little bit more. Either way, at this , the end will be the same. There is only one way to solve this situation, and it is the immediate withdrawal from Iraq, which is eating our economy away much in the same manner as the Vietnam War did, and the Afghanistan invasion did with the Soviet economy.

Franklin @ November 15, 2007

Leave a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Entries (RSS)
Comments (RSS)

92 queries.
1.018 seconds.

Politics blogs Politics blogs
Links to Site
%d bloggers like this: