Stock Market Sick and No Medicine Available
No one needs to panic on Wall Street or Main Street and a correction is needed. The rich folks of America just don’t get it yet and soon they will the hard way. The 700 billion dollar bailout plan was described as something needed to help the stock market and they also told us that Main Street needed Wall Street. They forgot to mention that Wall Street needs Main Street and until they look at things as a two way street, things won’t be fixed. The financial institutions that are struggling right now need to fail. They obviously don’t have a product or service that we need and that is a way of weeding out things. AIG was not too big to fail! Let me repeat AIG WAS NOT TOO BIG TO FAIL! They just had investors from all over the world heavily invested in their business and most mutual funds owned a percentage of AIG too. So to bail them out would keep a lot of folks from losing money. However this is only for the short term and eventually it will just catch back up with them again and another bailout would be needed. This goes with Fannie Mae and Freddie Mac too and these companies need to fail if they don’t offer a product or service that is profitable for our economy. This is how business works and it’s a way of rewarding the companies that do provide a useful service or product to our economy.
JP Morgan Chase was in trouble and they needed help. They are one of the reasons our credit and lending practices are frozen right now and they reported a profit for the quarter today? How is that possible? I’m sure a lot of investors want to know that and the taxpayers won’t be happy with that either!
700 billion dollars is said to be 10,000 dollars for each household in America. That is how much taxpayers is expected to pay for the bailout plan and if divided equally amongst taxpayers, the results would be in the 10 thousand dollar range per household. They really thought it was best to give this money back to the failing financial institutions? Why not give 10,000 dollars to each household in America and the government would get back a big chunk in sales taxes? If each household in America got back 10 grand, they wouldn’t need a loan. It would be ok for the credit markets to freeze. It would be ok if some employers couldn’t make payroll for a week or two. Americans wouldn’t need money with a check like that in their mailbox and then the money would truly get distributed all over America and this money would be spent on products or services that we wanted and not the ones that we don’t currently need.
The stock market isn’t going to get better anytime soon and that number of 6,800 is creeping up on us. If the DOW falls below 6,800, it will be a freefall and the stock market will crash! Hold on to your money and cash-in what you can in terms of stock. Keep a healthy amount of cash on hand and be prepared to ride out one big mess that the government and our banking systems have created. The Market is sick and it’s going to stay sick for a long time and might not pick back up until the housing industry goes back up and this won’t happen until June 30th of 2009.