Three days and eight hundred points later, the stock and equity markets are at the edge of the abyss. This situation pretty much guarantees the election of Obama and Biden in the fall. But, I'm afraid the price might be too high.
Forty years ago, a book came out called The Peter Principle. The way it went was this: In a heirarchy, a person rises to the level of his incompetence.
Take Herbert Hoover, for example. Whatever he did he was a success. A self-made millionaire a century ago, He turned to public service and became a hero. Then he was considered a brilliant cabinet officer. Then, during the first nine months of his presidency, everyone thought he was really good. Then came the events of October 1929, and for the next three years, he was a massive disaster.
Clearly everyone in the Bush Administration is a victim of the Peter Principle. I don't care what you think of Bush, himself, but most of the people, from Rove and Cheney to Powell, Rice and Paulson were considered to be competent, intelligent people. So what the hell is going on?
It appears to be quite possible that we will reach Dow Ten Thousand on Friday. Since the index hit bottom in 2002, the index has been mostly going up. Not all that far, but it reached it's all time high in 2006, and until this year has stayed there. But not any more. After a valiant effort to stem the tide yesterday and today, the market gave up sometime around three PM this afternoon and fell two hundred more points,
The stock market runs on psychology as much as anything else, and that's what seems to be the case here. Before stock markets crashed, they had panics, and this is what's going on right now. The atmosphere is one of panic, everyone is scared shitless, and the specter of Argentina and Mexico is looming. But this is different. When the United States sneezed, much of the world gets pneumonia. If America gets Pneumonia what will the rest of the world get?
Keep Dow Ten Thousand in mind over the next week. If we get there, and then break through. We're in deep shit. There's no way to put lipstick on THAT pig.