Mr. Sensitive

March 1, 2013

Rise Above

Filed under: Uncategorized — lbej @ 10:32

The stock market is really going for the head-fakes this week.  On Monday we got a powerful selloff that worsened throughout the day; the Dow closed down 216 points, at the day’s lows and at the lowest closing level in more than a month.  Finally, the long-expected correction was in full swing!  Only then we spent the better part of the next three days rallying hard, with the Dow adding 115 points on Tuesday and 175 on Wednesday to notch yet another 5-year high.  Not only were we not going to have a correction, we were going to blow through the 2007 highs!  The market opened in the green on Thursday, and the race to the all-time closing high on the Dow—14,165—was on.  Thursday afternoon the Dow climbed to within 15 points of the record, only to suddenly and forcefully reverse course, ultimately closing down 20 points on the day.  The selling is continuing this morning, and my guess is that we’ll end the week around where we started, maybe a little lower.  Much ado about nothing, I guess.

On the other hand, we have the sequester, which I would describe as no ado about something.  I said earlier this week that CNBC wasn’t continuing their ‘Rise Above’ nonsense into the sequester debate, and it turns out I was wrong.  Larry Kudlow, at least, is still running a ‘Rise Above’ banner on his show, only he’s modified it to say ‘Rise Above: The Debt Threat.’  Larry’s solution is simple: cut taxes and government regulation.  It’s a no-brainer, really, and so it’s no coincidence that it was employed during the George W. Bush Administration, when brains were in short supply.  If you just ignore the doubling of unemployment, the 40% drop in the stock market, the near-collapse of the financial system, and the deepest recession since the 1930s, cutting taxes and regulation during the last decade definitely worked.  The rich did get richer, though—much richer—and the middle class was left behind.  I guess that’s what CNBC means by ‘Rise Above.’

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