1) The Dow has tanked. It was above 12,000 little more than a week ago; now it's below 9,000. The bailout--which was supposed to prevent a market meltdown--failed to prevent a market meltdown.
2) Gas prices have tanked. I'm having trouble with this one--how much of the price of gas is due to futures, anyway? Unless demand stopped dead, I fail to see how gas could have dropped more than forty cents in less than two weeks--yet it has. When I filled up the Jeep on 9/28, gas was $3.74 per gallon. Yesterday evening it was $3.28. I've never seen such a precipitous drop in gas prices.
The price of oil has dropped below $80 per barrel, yet as far as I can tell the economy hasn't slowed down yet--so what happened to demand? Or is it speculation?
3) Apparently GM and Chrysler are in merger talks. Jalopnik cites the New York Times and CNBC, so it's not just fluff and rumor.
Are we screwed? I don't think so. The US still has an enormous amount of money and other capital; we can easily weather this if we all keep our heads.
Problem is, the press is fanning the flames of panic.
It's true that investments which rely heavily on the Dow retaining its value are now less valuable than they were last week. If the press continues to beat the doom-drum the Dow will go lower. But it has a bottom: eventually people will realize that the Dow has become undervalued and go on a buying spree...and when that happens, the slide will stop and reverse itself.
The problem with the "Dot Com Boom" was that the Dow was overvalued--that our economy was not large enough to support a Dow at that level. But the reverse condition exists now; the Dow we've got isn't big enough for our economy. It will go back up.
(Understand that I am speaking theoretically here, and that you should not risk money on my predictions. I work at Target and live with my mother--WTF do I know about investing? You've been warned. If you invest your life savings and end up broke, it's not my fault. Don't bother suing me; you won't get anything useful or valuable.)
Fear is driving the current economic climate--people don't know which way to jump and it's putting the brakes on investing and risk-taking. This environment--left to itself--can result in another Great Depression; it'd be different from the last one but that's what it would be. Unemployment would spike, spending slow, yada yada. Who said that our economy was depression-proof? Did anyone say that it was possible to prevent an economic depression from happening?
Meanwhile, the US is poised to elect a tax-and-spend Democrat liberal socialist who not only wants to socialize medicine, but also wants to start a new "national service" organization and wants to take 0.7% of the US GDP and give it away. Okay, a vote for Barak Hussein Obama will prove to be a vote for a kind of super-Carter, but the Democrats don't give a rat's ass about the economy or the American people as long as they are in power. Electing Barak Hussein Obama would be a serious, serious mistake. Carter's "malaise" would look like a birthday party.
Don't believe it? Check this out. ACORN--one of those "community organizers"--is being investigated for massive vote fraud in eight states. Barak Hussein Obama is an ACORN alumnus.
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The good thing about the US is how much inertia our politics have. Even assuming that Barak Hussein Obama wins the election--which is not a sure thing, even though the Democrats would like us all to believe it is--and that the Democrats carry the House and Senate, the people of the US are still going to be upset if the Democrats try to get too frisky. Remember what happened when the Clinton administration tried to shove "Hillarycare" down our throats? That (among other things) handed the Republicans control of the House of Representatives for the first time in forty years. You've got to have faith in the American people because although a voter is stupid, the voters are usually less so.
Besides, the economy might cough up blood for a few years, but eventually it will recover, given the chance. The best cure for the "doom and gloom" is to shut off the damn TV and go have dinner at a nice restaurant. Maybe go see a movie afterwards. Believe me, if everyone in the US did this just one night this week, it would help a lot.
A hell of a lot more than the stupid "bailout" did.