The market has just hit its natural bottom. The 6800 to 7200 range will ultimatly be known as the long-term bottom of this market crash. But that does not mean that we are out of the woods yet. Not by a long ways.
The Dow will hit a short-term low in the 5000 range. It will drop to the 5's, kick around between high 5's to the low 7's for a few months, likely through next year, then come up to its long-term low in the 7's for the next seven or eight years.
The reason for this is that Bush, Obama, and the Democrat Congress wasted trillions of our dollars bailing out their biggest bribers, the Wall Street Bankers.
If Bush, Obama & Congress would have had any sense or honesty, they would have spent the bailout money making the middle and lower class incomes' effective, rather than adding to debt through banking bailouts. This would have limited the credit and economic crisis.
If these fools would have cut all fed taxes on earners below $100,000 when the mortgage securities imploded, the resulting jump in real middle-class income would have put enough real purchasing power into the economy to establish a bottom on the housing plunge.
This real stimulus would have established an economic bottom point for the market to rest on. This bottom point would have been based on increasing the real earning power of the middle-class, rather than spending trillions to create an illisory increase in credit.
By now this real stimulus would have already established a market value for mortgage securities, though very low, which would have nonetheless stopped the continuing collaspe of mortgage securities, which would then have given us real "clarity" as to how much credit was really avaiable in the markets.
Instead, these fools poured at least 8 Trillion into the failed institutions that created this vast rip-off. If this 8 Trillion were put into the pockets of the middle-class, the resulting real stimulus would have brought the Dow to a soft landing at the 6800-7200 level, with an established housing market and price, which would make know the value of mortgage securities, while simultanously limiting the catastrophic economic consequences we are experiencing now.
We have now gone below 6800 on the Dow without knowledge of the value of mortgage securities. The housing market continues to plunge. Credit, well hell, the whole banking system has been the walking dead since last October. Last year's biggest global banks are now penny stocks. The worse part of this could have been avoided, if our poliitcians would not have given away our money to their biggest bribers.
The mistake of putting the first "stimulus" into the banks was nearly matched by the mistake of the second "stimulus," which did no more than partially bail out the States, and big Construction companies.
This error, of putting all of our money into very few hands, is what started these housing and financial bubbles in the first place. If the bailouts had been direct to the middle-class, the resulting economic activity would support local and state tax bases. Funding the collectors of taxes without stimulating the incomes of taxpayers is a very limited and a very short-term bandaid for a very serious problem.
The first failed bailout allowed the housing-credit crisis to slip into the broader economy in the first place. The second bailout has done little more than perpetuate a failed system for a few more hours or days.
Every penny of both these bailouts should have gone into the pockets of our middle-class. Only their purchasing power, not more credit, could have put a bottom on the housing slide and propped up spending to allow the economy to unwind slowly, rather than the screeching halt we are seeing today.
We are now seeing the severe consequences of our failed system and our failed bailouts in the snowballing unemployment rate and the massive plunge in consumption.
Because the politicians bailed out their biggest bribers, in order of contribution, they failed to put the money into the real economy before it began to crash as hard as the markets.
This cupidity will be spoken of by historians as a catastrophic mistake that drove the markets further down than the situation required, doubled the duration of the crisis, and considerably increased the damage to our international credibility and influence.
Now we have neither credit nor earning power. We have a vast sum of new debt to be funded at the height of a global economic crisis.
As I mentioned much earlier, the bailout money to the top will have two effects. First, it will not stem the banking meltdown, nor will it restore credit, or stimulate the housing market.
Second, as I said previously, when this vast amount of debt is put onto the global debt markets, it will only be funded at a very low cost with a very high interest rate, if at all.
This indicates that we are in for what could turn out to be a fierce bout of hyperinflation, especially in oil nations, nations dependent on food imports, and to a lesser degree across the whold global economy.
But don't worry, big screen color tv's, washer & dryers, and suv's will still be dirt cheap. And nobody will be capable of buying them, even at rock bottom prices.
I'm seeing this situation, "stagflation," developing by June, and presenting serious threats to domestic, and especially to global stability, by the end of the year at the latest.
All of these crisis have one source: The Death of American Democracy. If there is a better set of indicators demanding citizens to rise up and storm and reform their democracy, I have not seen them.
Criminal Wars. Crimes against humanity and an assorted array of War Crimes. Complete domestic political corruption by and for wealth. Complete domestic corruption of our most fundamental political principals.
What more do you people need to see before you wake up and throw off, and out the bastards who have stolen your money, your rights, and your country?
The "Kickers"
My economic analysis is linear. Although I am incorporating consideration of the instabilities and failures American policies are engendering across their diplomatic, economic, and military applications across the global topography, there are factors that cannot be predicted.
If a regional war breaks out centered in Iraq or Pakistan, China implodes socially or economically, or other random global meltdowns are triggered in Nigeria, Kenya, or Indonesia, there are significant random factors that can totally alter the already unstable trajectory of our country's political economy. (USA)
There is also the possibility of a complete economic collapse in the US, or the complete failure of one of our imperial wars/dictatorships.
Our situation is so unstable that "Kickers" can instantly destabilize the whole global balance of political and economic power. Don't be surprised if the nature of the situation instantly changes. I won't be.