Friday, September 03, 2010

Doubts and the Dow

Everyone is going gaga over the Dow. Yes, I am talking about the Dow Jones Industrial Average. It has gone up everyday in September. There has only been three of them. It still hasn't topped where it started at the beginning of the year. People who are heavily invested are still in the red. But, Whoa Nelly, are we excited.

To be totally overtaken with enthusiasm, look we are stuck back at 2004. Nothing is happening here.

It is all a ploy to make us think things are getting better. To make us believe that our president is actually doing something to improve our economy. The truth is that nothing has changed and nothing is really better.

Okay, just so someone doesn't show up and claim that BO has actually improved the stock market since he has been in office. Here is the chart.

On the 17th of February 2009 the president signed the American Recovery and Reinvestment Act. The Dow continued to plunge. When we started to come back, he signs another bill and we plunge again. If you look at each of the drops and then the dates he signs legislation, you will see a pattern. The pattern has some variation with pre or post bill blues and bliss.

The key here is that nothing has been dome to restore confidence in the market. There is always another bill on the block that will take more out of business. There is a constant supply of money draining bills that stop progress and stagnate the market.

Our organizer and chief has no idea what it takes to motivate business into action. You would think all politicians would want to understand this given that most of the tax revenue structure is based on earnings both personal and business. Instead, we see every means possible for closing up business and stopping income earning.

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