It is difficult to decide which better describes the leadership tactics of Washington these days. Is it a Broadway performance of Samuel Beckett's play Endgame with Hamm, Clov, Nagg & Nell fighting for decades & never getting anywhere; or is it a Stephen Sondheim's musical Send in the Clowns?
Isn't it rich?
Are we a pair?
Me here at last on the ground,
You in mid-air.
Send in the clowns.....
Between July 26 and the market close on Thursday (8/18) $6.8 trillion in US investments (the majority of it retirement accounts of millions of Baby Boomers) was erased from global markets. The US debt was downgraded; riots erupted in the UK & Europe's debt crisis spread from Italy to France. Unemployment is now at 9.1% (totally understated) & the postal service announced it would have layoffs in the region of 120,000 over the next few years. The Federal Reserve stated they would not increase interest rates until 2013. Whoppi dee! I don't see this translating into easier credit for the majority of would be buyers out there!
Is the dog wagging the tail or is the tail wagging the dog? How did Roosevelt get such results in the 30's and with the Dream Team of 2011we have created a world crisis? From 1945 to the mid eighties there were very few financial crises. With deregulation the world has become a more volatile place. Banks have now become so powerful that they can call the shots & know that if they fail they will be bailed out. They have become the financial crack houses of the twenty first century & have earned billons of dollars from Federal loans that is not being pumped back into the system so no growth can occur. In the meantime congress is too busy squabbling to pay attention. If only all our gambling debts were so easily forgiven it would be a shorter road to paradise for those who have had all their resources sucked into these buying frenzies forced upon them by over enthusiastic lenders. There is equal blame here so the lender needs to be accountable also. By forcing the taxpayer to pay all the debt we generate too much skepticism, which was not the intent of the bailout in the first place.Enough of the blame game and let's have some leadership! The market is crying out for confidence & we are getting skepticism and fumbling with no direction or guidance.
The roller coaster ride will continue next week. In the meantime don't bother sending in the clowns. "Don't bother they're here".