The Dow is a form of Numerology.
Question: Why Are The Screw-Ups Still in Charge?
Christmas Club: Much of the impetus behind the Dow's recent fall comes from the forced liquidation of hedge fund assets. As their customers want out, the funds will be forced to dump holdings as they try to raise upwards of $500 billion in cash by the end of the year.
Run Away, Run Away: Three of Australians largest financial funds "suspended withdrawals", forcing retirees to turn to Centrelink, the welfare agency, seeking temporary income support.
End? Which End? CNBC & friends are claiming that down has turned to up because new home sales are 2.7% above the August level. Not really, sales are down 33% year to year, prices have fallen 9% and the current year is the worst on record.
Apples and Oranges: There are two problems: Banks are broke; worse, customers are broke. Factories, stores, restaurants - the 'real' economy - don't need credit near as much as they need customers.
Out Pattern: A few years ago T. Boone Pickens gave Oklahoma State's athletic program a $165 million donation, in a hedge fund, where it grew to over $300 million. The Okies used it as collateral on a $300 million loan. Now the entire $300 million has been lost to margin calls, and the school still owes the $300 million it borrowed. And they lost to Texas, 28 - 24.
Throw a TARP over It: $5.2 billion of Paulson's purse has gone to finance PNC's takeover of National City Corp. Certainly is a flexible thing, this TARP.
Fair Game: Some say the solution to the global financial crisis in global cooperation via some sort of global regulation of financial markets. It may be nice to think people (and corporations) all over the world will suddenly see the wisdom and value of cooperation, but human nature and millions of years of evolution have yet to be repealed.
Sugar coating: Doctors in the US regularly prescribe vitamins, painkillers and antibiotics as placebos. Now the PC crowd wants doctors to explain that these measures are placebos, which would unmask the ruse and call for increasing the dosage to the new and improved double-strength placebo.
Nearer: Markets around the world crash, yet the Dow plays on. "The biggest currency crisis the world has ever seen" (Bank of New York Mellon) is spreading across Central Asia, the Ukraine, Russia and on into Europe, and the Dow plays on. Didn't they get the memo ?
Ponzi Schemes R US: The US has to borrow all the money Paulson's throwing on the fire, so it markets ever more Treasury bonds. As people - and nations - become leery of ever getting paid back, interest rates will rise, for it is obvious the US will never be able to repay those trillions of dollars. Unsustainable things do not last forever.
Time Fries: The IPCC's 2007 report is now out of date, as discouraging data keeps being reported. The first 'tipping point' that has apparently been reached is the melting of Arctic sea ice, which has reached the point of no return at least 30 years before previously predicted and may be gone within 5 years - for the first time in a million years.
Business as Usual: There is $11 trillion in outstanding corporate debt. Loose lending terms have allowed many troubled companies to postpone a day of reckoning. The terms let borrowers delay payments, issuing IOUs as payment or adding the interest to the loan balance. Worked well in the mortgage field, right?
Porn O'Graph: New new home data!