Mar 22 2018

Dow 23,000

So the Dow closed down 724.42 (or 2.93%)

First of all the Dow Jones Industrial Average is only 30 Stocks and a terrible Economic Indicator, it doesn’t even relate well to the general Stock Market. Most professional traders look at the S&P 500 which, as the name implies, includes 500 firms (that is down 68.24 points or 2.52%), or the NASDAQ, an even broader measure of equities (that is down 178.61 points or 2.43%).

Second, Stocks bear almost no relation to the overall Economy. Nobody has any money invested in them except the wealthiest 10%, and the wealthiest 1% holds 80% of that. Since these people are Millionaires I wouldn’t cry too much Argentina.

Another observation is that Stocks are experiencing a HUGE bubble, think Tulips. With the interest paid on T-Bills and other Bonds at near record lows (indeed only experiencing any rise at all as a result of arbitrary Fed decisions that yes, they like paying people to give them money to hold as opposed to charging them for the privilege which the Market would be perfectly happy to do) there are few places to invest except in fake Leonardos.

The sad truth is the Investor Class has decided that they are permanently entitled to 10% or better annual returns without actually making anything or doing any work. What you are seeing is Asset Inflation as large sums of money chase small real returns.

The Dow should be hovering to the scant side of 10,000 because that’s how much the Economy has grown since the Financial Crisis. Instead Investors are speculating, gambling in the BIG Casino and wailing and gnashing their teeth when the roulette wheel comes up double zero (European Casinos, being more gentile, have but a single slot where everybody loses- the extra one is an example of United States “exceptionalism”, U.S.A.! U.S.A.!).

It is of course Neo Liberal policy to inflate these bubbles as hard and fast as they can to create the illusion of dynamic growth while simply robbing the peasants of their hard earned Coppers to add to the already groaning coffers of the Ultra Rich. This is the entirety of Barack Obama’s Economic program with the side benefit of immunizing the thieves not only from the consequences of their criminal acts but the loss of their assets.

So don’t expect anything except cackles of glee from me as this bonfire of vanity vaporizes the “notional” value of Billions of electronic bits on the balance sheets.

To be predictive you can expect this wave to move through the Asian and European markets overnight until we see if there is a dead cat bounce tomorrow or if Investors have finally wised up and there is a real reckoning (I’d bet against the latter, Investors are stupid).

The irony is that Donald John Trump who’s been trumpeting (see what I did there?) Stock Market valuations as validation of the Chicago School Supply Side Voodoo Economics that is Republican Orthodoxy (in a very religious and faith based sense) has suddenly had that prop kicked out from underneath his fat ass because, and remember- Neo Liberal Policy can not fail, it can only be failed, he wants to start a Trade War with anybody and everybody whether it makes sense or not in order to distract from his Russia/Hookers/Corruption problems.