Why Are Stocks Going Down?
Stocks fell as much as 200 points today, and ended down 100 points. We are seeing a meltdown of stocks as people are just full of frustration about the future, and the government’s lack of a “for sure” plan to fix this mess.
Bonds were a safe haven again today, as value increased (interest rates fell).
The Dollar fell, and Oil and gasoline went sideways today.
Gold was the “sparking” performer today. It closed at $1002 – A NEW HIGH – and even hit $1005 during the day. Okay, I’m done talking about being worried about gold going down to retest any technical levels. I was wrong. It has proven itself to be a stunning investment in 2009.
In the news today….
The Consumer Price index (CPI) rose 0.3% in January breaking the downward, deflationary for the last 4 months. For the past 12 months, the CPI is zero increase/decrease. The main cause of the rise in CPI was medical costs and educational costs. Again, I don’t think this is a sign of oncoming inflation, but we must wait for at least 2 more months of CPI to see if that’s true or not.
So, why are stocks going down, down, down….
Simply put, it’s frustration in investors, main street, and Wall St. In our immediate consumption society, people are impatient waiting for Washington to do something to fix this mess we’re in.
Did you see Rick Santelli’s rant on CNBC yesterday. He is CNBC’s top financial analyst. He hit a raw nerve across the country when he talked about the housing rescue plan announced yesterday by the President. His key points were that we are rewarding bad behavior, and that’s not the way America became what it is. He has sparked a deeper conversation on this topic and the politics in DC altogether. For example, when asked why he didn’t go to DC as a politician and fix this mess, he said that he “didn’t want to have to take a shower ever hour.” He certainly struck a note believed by the majority of Americans that Washington is corrupt. He said he wanted to have another “tea party” but this time do it in Chicago at Lake Michigan – I’m in.
Here are the last numbers:
Dow Jones 30 Industrial – 7366 (down 100 points) – VERY UGLY
10 Year Treasury Bond – 2.77% (down 0.09%)
Euro – $1.2826
Gold – $1002 (up $26)
Oil – $38.94 (down $0.54)
Gasoline – $1.07 (down $0.02)
I did not catch that Rick Santelli rant so I went looking on YouTube and found a good re-post of it. I’m going to attempt to link to it here.
http://www.youtube.com/watch?v=wcvSjKCU_Zo
I am in for the tea party too! How much WAS that tea tax to England anyway? Probably not as much as we are paying now.
The founding fathers said that in their vision for america they hoped that taxes would never excede 3 percent of income and in times of war maybe taxes would be as high as 5% which they thought would be a terrible burden. What would the founding fathers find now?
Christy,
I never knew our founding fathers had said that. Thank you for adding this to our knowledge set.
If those “indians” dumped all that tea in Boston Harbor, the tax must have been as high as 1 or 2% to upset them that much.
As an amusing thought, when my wife and i lived in England in the 70’s, there was a time (under a labor – i.e. socialist – government) when income taxes in the UK were over 100% for a select few high earners who had some special types of income. Now anything over 100% is really a high tax. In fact i would call it confiscation. Maggie brought taxes down, and the UK prospered after that.
Tom
Nice discuss
hi-ya, superb post.