In the last couple of weeks the DJIA is down just shy of 1000 basis points.
A few things I think can explain some of this:
Stronger dollar. As with anything else, the stock index is a nominal value.
Deranged monetary policy – nobody really knows what’s going on there except for itchy trigger fingers and whispers about overheating. All I can say to that is, “Overheating? WHERE??” Sorry if I’m a bit daft, but I need to be told what “overheating” means and to be shown concrete and convincing examples. Otherwise, the whispers are nothing to me but an evolution of the bubble fear mongering, excuses for locking up the capital markets with a sign that reads “Members Only.”
The rest is probably a feeling of disillusionment… But we thought we were recovering… Uh, not so fast.
I read an article today in the Reuters Markets section on my iPad that featured Mr. Fisher of the Dallas Fed basically telling the corporate powers that be that are complaining about the dollar haircut they’ve taken to stuff a sock in it. The same Dallas Fed Fisher who was sounding the alarm on rising wages not but two months ago, said a strong dollar is good for workers and good for the economy.
I’ve thought about these two ideas (scratching my head) and they don’t seem to fit together. Perhaps somebody smarter than me can see something other than incongruence in Mr. Fisher’s rantings. But I think it’s one of those copious examples of central banking strong dollar worship, jettisoning nominal stability and doing real damage while not caring about the fallout: So what if these guys go bankrupt – they probably deserved it. I can’t help but think that the intent Mr. Fisher conveyed in the Reuters article is probably unlawful. But at least this time he’s sparring with powerful people and not just dumping on Joe Average – and at least I can hope that leads to a meeting with karma sooner rather than later.
On the political front, Mitt Romney has decided to sit out the presidential race. Good choice, Mr. Romney.
Sen. John McCain called the Code Pink people ‘low life scum.’
The White House released a tweet with a blurred out message about Mitt Romney attached. Whatever that was supposed to have meant, it was pretty sloppy and smacked of being disrespectful.
House Republicans abandoned an abortion bill last week. I didn’t read it and don’t know what was in it. But even though I am pro-life, I find it somewhat out of place that the first bill they would work on after the devastation of Great Recession and many people are still smarting would be that. It makes as much sense as passing ObamaCare did in the thick of it. I obviously have no crystal ball, but I have serious doubts that these people have learned anything about where they went wrong in the 2000s during their trek through the political wilderness, It is disappointing SSDD.
The Senate passed the Keystone XL pipeline bill. I believe its next stop is the President’s desk. Some say that it’s a moot point. The oil has already found other ways from Canada, namely Warren Buffett’s rail lines. But I have to ask a question about this that I am not sure if anyone has really thought about, and it runs along the lines of why we’d want the oil flowing from Canada on trucks and rail cars through cities and neighborhoods when it could be going through a regulated pipeline that has a path mostly away from where people live and work. I am quite guilty of harboring doubts that political opposition to this pipeline has anything at all to do with environmental concerns and suspect that there are less savory motivations lurking behind the environmental façade. Graft comes in so many forms – SSDD.