Stocks Down, Housing Stalling, Energy Unstable, Asia Unstable: Bad News Bears Down
By Elaine Meinel Supkis
All the Pollyannas predicting a boffo year with America printing infinite money thanks to the Feds hiding the M3 funds from prying eyes, we are going to shop until we drop, there is no limit, everything is coming up roses. Yeah, right. Have to fool investors so the rich and unload their Enron stocks. Now, there are tremors of fear. Duh.
U.S. stocks fell sharply in late-afternoon trading Tuesday after Google Inc's chief financial officer warned of slowing growth at the Internet company with a number of weak economic reports further undermining sentiment.As if the loonies who bid up Google stock to insane levels are now solely responsible for the sudden cold water? How about the cold, literally? It has barely broken zero here on my mountain for a week and looks to be very cold for the foreseeable future since the cold spot that used to sit over Europe has shifted to our part of the universe, as I expected.
"The main impetus behind the sell-off was the news from Google," said Al Goldman, chief market strategist at AG Edwards. "Google has been a market superstar and when you pull out the rug from underneath it, it creates a wet blanket on the whole mood of the market."
Goldman said the disappointing economic data did little to help sentiment.
"But the good news here is that the impact of a specific news item, i.e. one company, usually goes away quickly. We're looking at this pullback as a buying opportunity.
Last month, I waved my Cassandra arms and yelled about the foolish shopping spree America did when they thought all winter would be warm, I even told the story of the ant and the grasshopper but the hoppers were to happy, popping around, laughing, to notice ants like myself.
I like the mixed metaphors. "You pull the rug...and it creates a wet blanket." Well, the rugs being pulled are all those people in the hurricane zone giving up on their homes, one by one. Rotted rugs, indeed. The impact of this hasn't shown up in statistics because the banks held off calling in the mortgages for fear of a collapse. Fannie Mae and Freddie Mac are already circling the toilet, being investigated for fishy business practices, this is going to hit them very hard, by this time, next year, the vast majority of homeowners who lost their homes will be declaring bankruptcy.
If we get more hurricanes like this, but hitting different communities, Florida and the East Coast, anyone? How about a replay of the hurricane, unnamed, that hit in 1938? And of course, the inevitable earthquakes that are due to level parts of the West Coast? Well, we have no grace, no excess funds for any of this! The money collected by our government and the generosity of fellow Americans and sheiks seeking influence after the hurricanes last summer is running dry. Soon, many of the victims putting tons of money into the economy, paying for housing, hotels and food, etc, is going to abruptly end and a whole slew of people will end up living in refrigerator boxes. So this stream of funds will end.
Congress is madly cutting money that is used in America, prefering to spend on overseas wild adventures, so this money buying power is ending rapidly, too. The $250 billion in hurricane spending our rulers yapped about last fall has fallen to a grudging $7.5 billion which is what? 4%? I mean, the amount is pathetic in comparison with the dream amounts. And our government can't even afford this since they asked for another $80 billion for six more months of the Iraq Meathead Mystery Tour?
I blogged how Snow, the guy who sold us down the riverfront to the UAE, this traitor is confiscating Federal worker's pension funds to keep the government going until the GOP figures out how to raise the debt ceiling to $9 trillion which is an amazing number, it is well inside what I would call "the RED zone." Which is where our deaths lie, for, to pay our debts, we will cast many Americans overboard.
These people are barking insane. The entire "economy" has been soley a faith-based affair involving foisting massive debts onto the future for today's goofy spending on McMansions and McDonalds. This childish spending spree was encouraged by Bush and his gang, after 9/11, he told everyone to go to Disneyland and go shopping and this would defeat the terrorists.
The economy, which stubbed its toe in the final quarter of 2005, is probably back on firm footing in the opening quarter of this year despite a cooling housing market and somewhat skittish consumers.
After digesting the latest batch of economic reports, released Tuesday, analysts predicted that economic activity is rebounding nicely in the January-to-March quarter and will grow by at least a 4.5 percent rate. For all of 2006, the economy will log another year of solid — though slower — growth, they said.
"The economy is doing pretty well now in terms of momentum," said Brian Bethune, economist at Global Insight.
Who are using bombs and guns. They went shopping, too. Unfortunately for us.
Look as I can, I see no good economic news anywhere. The ability to ship out inflation is hitting a wall now because it takes more and more a bite, the energy costs of transporting goods, compared to when oil was $20 a barrel. This is translating into inflation. The rich will continue to bid up top properties and art work and other things they want, their mega-toy spending spreee will go for another year but the economy can't float on that boat.
Mr. & Mrs. Middle America won't be able to access their Home ATM machines anymore. This will cause a collapse of spending. There is no soft landing. Like any thing that is flying high, when it stalls out and begins to decline, that isn't the point of most pain! From Boston.com:
The Gulf Coast has not rebounded from Hurricane Katrina's blows. It had 12 casinos before the storm made landfall in August and a 13th was about to open. But the coast is on its way to recovery. As it turns out, it was holding the ace card all along. Now, perhaps more than ever, people want to gamble.And this is where it all ends. A debased economy, everyone gambling their last bucks hoping to rake in the loot. Despair and fear feeding the frenzy. Casinos are a blight on an economy. They are totally nonproductive. They sap the soul, they eat family financing, they weaken the will to work. Get rich quick and do it having fun! This is a con game, a rip off that should be outlawed. And it is now the fastest growing segment of our economy, another deadly sign.
''The numbers have been off the charts," said Larry Gregory, executive director of the Mississippi Gaming Commission. ''I was absolutely in shock when I saw the numbers. It was absolutely amazing."
Gaming in Mississippi is typically a $2.8 billion industry, and even with 12 of its 30 casinos out of commission for nearly four months after the storm, gaming revenues still topped $2.4 billion last year. Inland casinos that were spared actually saw double-digit percentage increases in revenue in the last quarter of 2005. Then came what Gregory called the real shocker.
The three casinos that opened in Biloxi -- the IP Hotel & Casino on Dec. 22, the Isle of Capri on Dec. 26, and the Palace Casino Resort on Dec. 30 -- took in $14.5 million by year's end, more than seven times what the entire Gulf Coast casino industry typically makes in a week.
Our economic plane is at the stall point. The way down is very far and we won't feel too much pain-----Until we plow into the earth. This particular flight might end up with many of our cities being destroyed in a major war which our rulers might desperately wage as things fall apart. Like, a nuclear with with China and Russia or bin Laden gets his paws on Pakistan's nukes.
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