by Jack Lee
The stock market had a nice climb on all the stimulus money fueling a false economy, but that money is spent. It’s effect is looking dangerously temporary. Now all the reports of unwise stimulus spending, mispending, waste and fraud is starting to sink in. Thats weighing on Wall Street. Also, the market doesn’t like these high unemployment numbers and our massive deficit. This is causing the sell off.
There is no Plan B if this bailout stuff doesn’t take hold. We’re really out of bailout money and interest rates are at record low, so there’s no place to run. If we don’t pull out soon the current rate of spending is more than enough to drag the market down even further.
The red flag has been raised weeks ago when this sell off began and this has now turned into a very sharp sell off and such things are of concern to money managers. So, if those guys are starting to worry, you better pay close attention to your portfolio! Be ready to cash in if we don’t see the sell off slow soon and level out.
Remember, it’s only been a year since we were starring total economic collapse in the face. We’re far from seeing a full-on recovery and many analysts are predicting big up and down swings in 2010. Fasten seat belts, it’s going to be a rough ride!
One bright spot is the overall growth of GDP which should be between 4.5 and 6% by years end. The DOW closed Monday at 9808 and thats a big drop in a short time from 10700!