Headlines And Effects

[Guest]

Just a few from this morning's Wall Street Journal...
U.S. Stock Futures Tumble
U.S. Dollar Falls Against The Yen

Markets Brace For Downgrade's Toll

Germany's DAX, down more than 20% today from its intraday high on May 2
The STOXX 600 (European stock market) down 20% from its high in February
Asian Markets Reel After U.S. Downgrade

Stocks Tumble In The Gulf
In one post I made here recently, I opined that the stock market could lose 50% of it's value in the case of a default, maybe less with only a credit downgrade. When the stock market was at it's highs for 2011 recently, the total value of the stocks traded was $15.39 trillion. If the market actually does fall by 50%--it's already fallen over 12% in the last two weeks--that means over $7 trillion of wealth will have disappeared. That's about half of the GDP of the U.S. for an entire year. Even as I write this, over $2 trillion of the world's wealth has evaporated.

If anyone believes that the wealthiest Americans would prefer to lose half their wealth instead of paying a percent or two in income tax if it was a part of a plan that might have avoided the S&P downgrade, you're delusional. If anyone doesn't believe that it's been the actions of the U.S. government over the last 10-12 years that got us to this point, you're really operating in a totally different world. Does anyone still believe what some Tea Party leaders said only last week, that a default would be OK and a credit downgrade would be no big deal?

What's the effect? What will the effect be in your household? Will you think twice about spending, buying that new car or appliance or even new clothes? Multiply that by most of the households in the world. Then think of yourself as a business owner. Would this be the time to hire more employees, to build a new plant, or even buy some new equipment?

You can easily see what the effect of this disastrous situation will have on our economy, on our wealth and the confidence that consumers and business owners will have going forward. If you want to blame someone, blame ALL the people who served in national elected office since about 2000. Not one party, not one person has more responsibility than another. Collectively, their governance of this country may have started the ending of an era. It may have started the inexorable decline of the U.S. in world leadership.

The scary thing is that the role government can play in assuring a strong economy is to provide an environment wherein both consumers and business owners can confidently make decisions. Have you heard ANY ideas coming out of Washington that might accomplish that? Have you observed ANY conduct by our elected leaders that gives you confidence? I haven't.

More importantly, our government CANNOT keep spending as it has. First, there's the problem that there will be substantially less wealth in the world available to lend to us. Of course, there's the question of confidence in the reliability of our government as a large borrower. Then there will be the impact of whatever spending cuts may be agreed on. If it's thre Tea Party's "cut, cap and balance", millions of government workers would be out of work very quickly. If it's a less agressive plan such as recommended by the Simpson-Bowles Commission, the reduction of government jobs would be less but still significant.

Will the adoption of either plan have the effect of strengthening the U.S. economy, putting more people back to work? Make consumers more confident? Provide the stability to business owners to make them want to hire and invest? You know the answer and so do I.

The answer is pretty obvious, isn't it? This is going to hurt, hurt all of us. Heck, it already has hurt any of us that have 401(k)'s or investment accounts.

We can't sustain the way we've run government in the past. So there's a choice to be made, I think. The dramatic immediate plan of the Tea Party or something painful but which would spread the pain over a longer period, like Simpson-Bowles or even the Ryan budget.

We'd better be thinking about it while we're not out shopping or vacationing.

[Guest]

Just a few from this morning's Wall Street Journal...
U.S. Stock Futures Tumble
U.S. Dollar Falls Against The Yen

Markets Brace For Downgrade's Toll

Asian Markets Reel After U.S. Downgrade

Stocks Tumble In The Gulf
In one post I made here recently, I opined that the stock market could lose 50% of it's value in the case of a default, maybe less with only a credit downgrade. When the stock market was at it's highs for 2011 recently, the total value of the stocks traded was $15.39 trillion. If the market actually does fall by 50%--it's already fallen over 12% in the last two weeks--that means over $7 trillion of wealth will have disappeared. That's about half of the GDP of the U.S. for an entire year. Even as I write this, over $2 trillion of the world's wealth has evaporated.

If anyone believes that the wealthiest Americans would prefer to lose half their wealth instead of paying a percent or two in income tax if it was a part of a plan that might have avoided the S&P downgrade, you're delusional. If anyone doesn't believe that it's been the actions of the U.S. government over the last 10-12 years that got us to this point, you're really operating in a totally different world.

What's the effect? What will the effect be in your household? Will you think twice about spending, buying that new car or appliance or even new clothes? Multiply that by most of the households in the world. Then think of yourself as a business owner. Would this be the time to hire more employees, to build a new plant, or even buy some new equipment?

You can easily see what the effect of this disastrous situation will have on our economy, on our wealth and the confidence that consumers and business owners will have going forward. If you want to blame someone, blame ALL the people who served in national elected office since about 2000. Not one party, not one person has more responsibility than another. Collectively, their governance of this country may have started the ending of an era. It may have started the inexorable decline of the U.S. in world leadership.

The scary thing is that the role government can play in assuring a strong economy is to provide an environment wherein both consumers and business owners can confidently make decisions. Have you heard ANY ideas coming out of Washington that might accomplish that? Have you observed ANY conduct by our elected leaders that gives you confidence? I haven't.

More importantly, our government CANNOT keep spending as it has. First, there's the problem that there will be substantially less wealth in the world available to lend to us. Of course, there's the question of confidence in the reliability of our government as a large borrower. Then there will be the impact of whatever spending cuts may be agreed on. If it's thre Tea Party's "cut, cap and balance", millions of government workers would be out of work very quickly. If it's a less agressive plan such as recommended by the Simpson-Bowles Commission, the reduction of government jobs would be less but still significant.

Will the adoption of either plan have the effect of strengthening the U.S. economy, putting more people back to work? Make consumers more confident? Provide the stability to business owners to make them want to hire and invest? You know the answer and so do I.

The answer is pretty obvious, isn't it? This is going to hurt, hurt all of us. Heck, it already has hurt any of us that have 401(k)'s or investment accounts.

We can't sustain the way we've run government in the past. So there's a choice to be made, I think. The dramatic immediate plan of the Tea Party or something painful but which would spread the pain over a longer period, like Simpson-Bowles or even the Ryan budget.

We'd better be thinking about it while we're not out shopping or vacationing.

I would agree !!!

What I hope, and I realize since I am someone who opposed this President from the get go BUT HE IS THE PRESIDENT, that Obama will show some leadership instead of playing along with the stupid political games.

More to your point, he and other Dems, have got to stop with the talk about Republicans are going after medicaire, etc. He made comments along that line a number of times, when he and everyone knows that nobody over 60 or so is going to lose anything. The adjustments will be on folks younger so just stop the rhetoric.

In addition, the Republicans have to come to the table open to making some compromise....I am totally against RAISING TAXES, but all for REDESIGNING THE TAX CODE. I believe that everyone should share in the burden..does that mean the "rich" pay more...YEP...but it also means that those on the other end not look to a paycheck every April to buy the new car or tv. That is not being non-sympathetic simply realistic.

[Guest]

These are frightening economic times for sure. It is also a frightening political time with lack of civility and willingness to work together to solve our problems.
It was different back in 1979 when one had 20 years or more to recoup investment losses. The global scenario seems more unstable.
We are definitely scaling back trips and major home improvement projects. Our second car which is 7 years old will have to get a few more miles before a trade in.
Investment-wise for Roth IRAs and 401s, we are already taking a beating even though we are well diversified. Thankfully we are not relying on this for income as others might be at this time.

[Guest]

I would agree !!!

What I hope, and I realize since I am someone who opposed this President from the get go BUT HE IS THE PRESIDENT, that Obama will show some leadership instead of playing along with the stupid political games.

More to your point, he and other Dems, have got to stop with the talk about Republicans are going after medicaire, etc. He made comments along that line a number of times, when he and everyone knows that nobody over 60 or so is going to lose anything. The adjustments will be on folks younger so just stop the rhetoric.

In addition, the Republicans have to come to the table open to making some compromise....I am totally against RAISING TAXES, but all for REDESIGNING THE TAX CODE. I believe that everyone should share in the burden..does that mean the "rich" pay more...YEP...but it also means that those on the other end not look to a paycheck every April to buy the new car or tv. That is not being non-sympathetic simply realistic.

It is one thing to disagree with Obama's policies. It is another to wish him and ultimately our nation failure. Have we put our political agenda ahead of what is best for America? And we end up cutting a measly 1% from our debt. We need more cuts and tax code redesign. Cut the loopholes.

This is sickening.

[Guest]

It is one thing to disagree with Obama's policies. It is another to wish him and ultimately our nation failure. Have we put our political agenda ahead of what is best for America? And we end up cutting a measly 1% from our debt. We need more cuts and tax code redesign. Cut the loopholes.

This is sickening.


And I wished him and our country failure....WHEN ? Link to that please !!

It is also one thing to agree totally with the President and call those who do not by some kind of name...now THAT is sickening !!!

I also believe I mentioned redesigning the tax code...what might be your problem with anything I said...because I questioned the Presidents leadership and hoped it would change ?

[Guest]

It is one thing to disagree with Obama's policies. It is another to wish him and ultimately our nation failure. Have we put our political agenda ahead of what is best for America? And we end up cutting a measly 1% from our debt. We need more cuts and tax code redesign. Cut the loopholes.

This is sickening.

If you believe that someone's plans can only lead to economic disaster; is is wrong of you to hope he fails in his plans?

[Guest]

RichieLion--- Rush was crucified for saying he hoped Obama failed. He meant exactly what you said. He didn't want America turning into the kind of country Obama invisioned. I don't either.

[Guest]

I read actually, it’s because of divided government that the crisis isn’t even worse. According to the Cato Institute, government spending over the past 50 years has increased by 1.73% annually when Washington was divided between parties, and 5.26% when a single party was in control.
This would explain recent spending like the failed Stimulus Bill and the dangerous Obamacare.

[Guest]

Looks like for the most part this has turned into a "bash Obama" thread, with many of the same old bashers.

Are we completely forgetting how we got into this mess? More importantly, are we considering at all how we're going to get out of it? Or do we even have a chance to get out of it?

I'd say that without major changes to the membership of the U.S. Congress and more importantly whether the various political factions adopt a willingness to work together, to compromise and agree on some plans that will work, this country doesn't have much of a future. The President is a spokesman for and to the people, but he can't change a thing with regard to our spending or our fiscal policy.

The President can suggest, cajole, even threaten, but it's going to make little difference who is sleeping in the White House beginning on January 20, 2013 unless major changes are made in the Congress and the way they choose to do business. If it's the same old list of people, Reid, McConnell, Pelosi, Boehner, Cantor holding forth under the capitol dome, the future is dim indeed. Nothing will change.

Anyone who thinks that things will improve if Romney or Bachmann or Perry or Palin are elected but if little else changes at the other end of Pennsylvania Avenue is delusional.

[Guest]

It is one thing to disagree with Obama's policies. It is another to wish him and ultimately our nation failure. Have we put our political agenda ahead of what is best for America? And we end up cutting a measly 1% from our debt. We need more cuts and tax code redesign. Cut the loopholes.

This is sickening.

I might add that no only did I ever wish bad for America as you suggest, but asked for leadership and could have used the Presidents own words when he said in 2006 "The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure."

[Guest]

Looks like for the most part this has turned into a "bash Obama" thread, with many of the same old bashers.

Are we completely forgetting how we got into this mess? More importantly, are we considering at all how we're going to get out of it? Or do we even have a chance to get out of it?

I'd say that without major changes to the membership of the U.S. Congress and more importantly whether the various political factions adopt a willingness to work together, to compromise and agree on some plans that will work, this country doesn't have much of a future. The President is a spokesman for and to the people, but he can't change a thing with regard to our spending or our fiscal policy.

The President can suggest, cajole, even threaten, but it's going to make little difference who is sleeping in the White House beginning on January 20, 2013 unless major changes are made in the Congress and the way they choose to do business. If it's the same old list of people, Reid, McConnell, Pelosi, Boehner, Cantor holding forth under the capitol dome, the future is dim indeed. Nothing will change.

Anyone who thinks that things will improve if Romney or Bachmann or Perry or Palin are elected but if little else changes at the other end of Pennsylvania Avenue is delusional.

And why not bash Obama. He never admits when he is wrong. He said if we didn't spend almost a trillion dollars on the Stimulus bill unemployment would go over 8%. Well, we threw the money away and unemployment is over 9%. I won't even mention his Cash for Clunkers. The only good thing about that is it took most of the Obama 2008 bumper stickers off the road.:D

[Guest]

blah,blah,blah, no matter what someone posts the same people use the post to bash the President. Some of you I don't bother to read anymore because it's the same all the time. As a matter of fact,I try to guess what you are posting before I start to read them and it really is the same garbage time and time again. You have learned your lessons well....repeat the same stuff over and over and some people will believe it.

[Guest]

blah,blah,blah, no matter what someone posts the same people use the post to bash the President. Some of you I don't bother to read anymore because it's the same all the time. As a matter of fact,I try to guess what you are posting before I start to read them and it really is the same garbage time and time again. You have learned your lessons well....repeat the same stuff over and over and some people will believe it.

Hm Are you describing our Commander in Chief?:D

[Guest]

Looks like for the most part this has turned into a "bash Obama" thread, with many of the same old bashers.

Are we completely forgetting how we got into this mess? More importantly, are we considering at all how we're going to get out of it? Or do we even have a chance to get out of it?

I'd say that without major changes to the membership of the U.S. Congress and more importantly whether the various political factions adopt a willingness to work together, to compromise and agree on some plans that will work, this country doesn't have much of a future. The President is a spokesman for and to the people, but he can't change a thing with regard to our spending or our fiscal policy.

The President can suggest, cajole, even threaten, but it's going to make little difference who is sleeping in the White House beginning on January 20, 2013 unless major changes are made in the Congress and the way they choose to do business. If it's the same old list of people, Reid, McConnell, Pelosi, Boehner, Cantor holding forth under the capitol dome, the future is dim indeed. Nothing will change.

Anyone who thinks that things will improve if Romney or Bachmann or Perry or Palin are elected but if little else changes at the other end of Pennsylvania Avenue is delusional.

What got us into this mess was the spending surge and debt acquisition of the current President of the United States. His greatest spending surge hasn't even started yet as the major provisions of the gargantuan spending bill known as ObamaCare doesn't even totally take effect until 2014. S&P knows this, and knows that the future is a catastrophe in waiting because of it; particularly with the refusal of our incompetent leadership to acknowledge the future and plan for it.

We've never been devalued in our history; not even during the Great Depression. This is quite an achievement for this President. President Obama is leading the U.S. into a deconstruction, and acknowledging that he has put together a crack team of the best and the brightest, I have to assume it is being done with purpose.