Remember last week when the Dow fell 777 because politicians didn't pass the Banker Bailout Bill (BBB)? Well earlier today the Dow was down over 800. Worse, this was 1,300 from the market peak last Friday, around the time the bill passed.
My government spent almost one trillion dollars and all I got was this crummy market! For those looking for a bright side, consider many emerging market funds are down 50% from the peaks; heck Russia fell around 20% in a day and is now down 65% from highs. And Russia didn't even have a housing bubble! They did have a commodity bubble but we'll save that tale for another day.
This makes one wonder, what would have happened if no rescue package was passed? The non-U.S. government bond market - the area the bailout is targeting - is not fairing much better.
The trouble is panic has set in. Not just with investors, but consumers. For the first year or so of the unwinding of the Great Real Estate bubble, experts were sure it was somehow going to be contained - that trillions of instant wealth could just disappear with nobody noticing (except the banks then lent money against the phantom gains). Well if you've been to a car dealership lately, people have started to notice.
While we don't think the Dow under 10,000 is such a bad place to be compared to government bonds, CDs, or real estate, if this downward spiral continues HGTV's "My House Is Worth What?" will be renamed "My House Is Worth What!"
Market To Politicians: Thanks, But No Thanks...
Remember last week when the Dow fell 777 because politicians didn't pass the Banker Bailout Bill (BBB)? Well earlier today the Dow was down over 800. Worse, this was 1,300 from the market peak last Friday, around the time the bill passed.
My government spent almost one trillion dollars and all I got was this crummy market! For those looking for a bright side, consider many emerging market funds are down 50% from the peaks; heck Russia fell around 20% in a day and is now down 65% from highs. And Russia didn't even have a housing bubble! They did have a commodity bubble but we'll save that tale for another day.
This makes one wonder, what would have happened if no rescue package was passed? The non-U.S. government bond market - the area the bailout is targeting - is not fairing much better.
The trouble is panic has set in. Not just with investors, but consumers. For the first year or so of the unwinding of the Great Real Estate bubble, experts were sure it was somehow going to be contained - that trillions of instant wealth could just disappear with nobody noticing (except the banks then lent money against the phantom gains). Well if you've been to a car dealership lately, people have started to notice.
While we don't think the Dow under 10,000 is such a bad place to be compared to government bonds, CDs, or real estate, if this downward spiral continues HGTV's "My House Is Worth What?" will be renamed "My House Is Worth What!"