Walking by a newspaper stand this morning, the huge headline read; FEAR GRIPS STOCK MARKET. I wonder if tomorrow’s headline will be equally as bold and honest to read; GREED CAUSES MARKET TO SOAR? Correct me if I am wrong, but were we not told repeatedly that if the Bail Out package were not passed by yesterday that financial Armageddon would result immediately? If such Armageddon is strictly measured by yesterday’s huge drop, then I guess the fear mongers were right. But, if measured against yesterday’s drop and today’s gain; I’d say Armageddon is nothing to dread.
As I write this at noon on September 30th, the Dow has managed to gain back one third of what it lost yesterday, on a Jewish holiday to boot. Now, if yesterday was Armageddon, then we have no reason to keep talking about bail outs. If yesterday was Armageddon, then what is today?
What took place yesterday about this time was nothing but pure panic driven selling. Fear is a huge motivator, especially when one has millions of dollars at stake. It almost seemed as if the traders were waiting to either go on a buying or selling binge strictly based on the outcome of a vote in the House of Representatives. As soon as the vote totals were released, the market immediately went down so fast the tickers couldn’t keep up. From then on it was more momentum than anything which drove the market.
I wrote a post a couple of days after hurricane Ike posing the question of what became of all those who failed to evacuate when ordered with the repeated stern warning of certain death. No one knows for sure how many people ignored the orders, but there had to be at the very least a few thousand who stayed in houses which literally disappeared during hurricane Ike. Where are these people? They are not reflected on the death count and their whereabouts is not accounted for anywhere.
At one time the media reported there were 140,000 people who failed to heed the mandatory evacuation order. That means 140,000 people were told they faced certain death if they did not leave. They were told the equivalent of what the United States House of Representatives was told before their vote yesterday and again this morning. Just as there is nothing to indicate even 14,000 lost their lives in Ike, the horrible disaster which was to have driven the Market into the ground did not happen today.
When statements are made such as “stay and you face certain death” or “we must pass this measure or the market will immediately fall off the earth”; such statements better be right or all credibility is lost. In the case of Ike, the warning needed to be issued, but not in reference to all 140,000 people who did not evacuate. The warning did not apply to all those who stayed, only those in one story homes in certain locations. Yet, the initial stories kept repeating the 140,000 who defied mandatory evacuation orders.
Only a handful of people honestly know what has happened and really is happening to the stock markets, the banking institutions and mortgage holders in this country. If we are to assume the President of the United States is one of those people, then either he has repeatedly lied through his teeth in telling us the sky is falling or it is yet to fall.
The biggest problem with the measure which was defeated yesterday was that it gave entirely too much power to the Treasury Secretary and exposed the United States taxpayers to risk that was not needed. Representatives from both parties rejected their party leaders and voted their conscience yesterday. What took place was neither Republican nor Democrat; it was American.
The Stock Market could still fall hard the next few days. There could be more big banks fail this week. But, the odds of this happening are very slim, simply because of what has happened today. With the market now gaining almost ONE HALF of what it lost yesterday back with two hours left in the day, there is no way the sky is falling today anyway.
I believe those who stood up to their party bosses and voted their conscience yesterday are the true patriots in this country. Those who were willing to be on the receiving end of Barney Frank’s sarcasm and Nancy Pelosi’s finger pointing are those who stand a chance of guiding this nation out of shark infested waters into the bay of financial stability.
There are major problems causing banks and other businesses along with hundreds of thousands of individuals to be losing the battle of solvency. These problems need to be addressed and corrected, but not by simply throwing more money at them while recklessly running the national debt past the ten trillion dollar mark.
May the lesson to be learned by President Bush, Treasury Secretary Paulson and those at the National Weather Service be; If you cry wolf—there damn well better be a big bad one lurking just outside the door. Somehow I have the feeling none of these people or agencies are going to listen to me.
Did I just hear someone crying “Wolf” again?