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It was Bernanke who said he didn’t have a nefarious scheme, but who cares. He and Geithner, Paulson’s mini-me, are like two peas in a pod. But, on to the latest stimulus plan, a little more much ado about nothing. Like the unveiling of the Segway, the stimulus plan announcement fell flat and tripped up a sitting president.
This was the new administration’s chance to start making good on campaign promises, to demonstrate that there will be change, and it didn’t and there won’t be. The government will continue to spend larger amounts of money it doesn’t have, after little debate, with barely a plan and with no oversight. The opportunity to introduce reform to Wall St. was passed up.
Maureen Dowd had this to say in the NYT:
“Geithner won an internal battle with David Axelrod and other Obama aides who wanted to impose pay caps on every employee at institutions taking the bailout and set stricter guidelines on how federal money is spent. Geithner prevailed over those who wanted to kick out negligent bank executives and wipe out shareholders at institutions receiving aid.” “The new plan offers insufficient meddling with Wall St., even though Wall St. shows no sign that the hardscrabble economy has pierced its Hermès-swathed world.”
That the looting will continue was not lost on the Chinese. Bloomberg reported last night: “China should seek guarantees that its $682 billion holdings of U.S. government debt won’t be eroded by “reckless policies,” said Yu Yongding, a former adviser to the central bank.” You knew it was going to come sometime. So, the market tanked on Tuesday. Today, the Dow again closed under 8,000. And that has market analysts debating whether Tuesday’s sell-off was based on disappointment over the stimulus plan or was a simple “sell the news” event (MarketWatch).
What they should be concerned about the stock market plummeting another 50% or the national debt swelling to the point that the marginal utility of the next borrowed dollar spent is zero.
Market Ticker provides this chart depicting the effectiveness of spending borrowed money:
We’ve also got going a convergence of Elliott Wave Theory’s fifth wave down, way down; a technical Triangle Formation pointing to a potential loss of 3,700 points or a 4,200 Dow; the Kondratieff 54-Year Cycle echoed, knowingly or not, by Microsoft CEO Ballmer in a recent talk, Marc Faber’s spring 2009 Apocalypse, as well as a host of predictions from conspiracy theorists, psychics and automatic writers—and they’re all saying the same thing.
Should we give Geithner and Obama the benefit of the doubt? No, we shouldn’t and based on the markets’ reaction, we didn’t
Last 3 posts by phillenbrand
- Loan Modification Fix - July 20th, 2009
- Free Home Loan Modification Help For Homeowners - July 10th, 2009
- Would One Mortgage Regulator Work? - May 21st, 2009
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