Once again, I was on another forced hiatus from blogging and what a week for me to be unable to post.
Let us start with the stock market:
Monday Aug. 8: Down over 600 points
Tuesday Aug. 9: Up over 400 points
Wednesday Aug. 10: Down over 500 points.
Thursday Aug. 11: Up over 400 points
Friday Aug. 12: Up over 100 points.
A historic week in the stock market, but don’t be fooled. The S&P downgrading America to AA+ with a negative outlook, did not have much to do with this volatility. The market began its decline at the end of July when the Dow was at a high of 12,724 on July 21.
What caused all this?
Would you believe this is how the market works. It is called a correction and yes corrections can have greater than ten percent dips. The difference now is thanks to a more automated system it just happens faster.
Are there unsettling factors?
To be sure.
The whole world got to watch our government struggle with the debt ceiling. It was ugly and the solution leaves much to be desired. I’m not going to point my finger and blame any one group, not this time. The fact is the next national election will decide how America is going to handle its debt situation.
More unsettling than America’s debt problem is Europe, you know what we are trying to avoid becoming more like.
Okay, so I took one political shot. I’ll try to refrain.
The numbers coming out of Europe are not good and it looks as though they are clearly going into a recession. Combine this with America’s anemic GDP numbers and we are seriously looking at a double dip recession.
I know, I know there are many who feel we never came out of the last recession. I’m not talking feelings right now just actual stats.
Even if we manage to avoid another recession, America’s economy is not going to grow significantly. So now the money managers need to restructure their portfolios to reflect all this turmoil.
I hear you asking.
Don’t be afraid. This is not 2007 – 2009 being replayed, even in Europe.
Okay that ends my nonpolitical section of this post!
Now back to the fun stuff.
The Republicans had another debate last Thursday and I am sure it was watched only by us crazy political wonks.
Who won the debate?
Does it really matter?
For my money, Newt won the debate. It won’t have any affect on his campaign but he won.
As far as affecting one’s campaign Romney won. No harm was done to him that makes it a win for him.
The disaster of the debate was Ron Paul. While his cult was prominent in the audience, any candidate who says emphatically Iran is not a threat and should be allowed nuclear weapons, should be eliminated from any presidential contest.
While the debate was interesting it had absolutely no effect on the major political event of the weekend, the Ames Straw Poll in Iowa. Michele Bachman won in a state she claims her birthright and Ron Paul’s cult gave him second place as they always do well for him in straw polls. Shall we look at the past non-incumbent winners of this straw poll since its inception:
1979: George H.W Bush
1987: Pat Robertson
1995: Bob Dole and Phil Gramm (Tie)
1999: George W Bush
2007: Mitt Romney
Only twice has the winner or joint winner gone on to win the nomination.
Does the Iowa Straw Poll matter?
Just ask Tim Pawlenty who dropped out the day after his third place finish. While you are at it, ask Lamar Alexander and Elisabeth Dole whose poor results forced them out in 1999 and four years ago Sam Brownback dropped out after his third place finish. While the straw poll may not be prescient regarding the final nominee, it does a great job of weaning out the weaker campaigns.
On the same day as the Straw Poll Governor Rick Perry announced his bid for the Presidency.
I’m sure America can’t wait for another Governor from Texas to be President.
Maybe Jeb Bush will run.
This has nothing to do with their credentials, it’s just optics do matter.
Finally, this leaves us with President Obama, whose approval rating just keeps dropping. Down to 39% in Gallup’s tracking poll and tying his low of 43.3% in RealClearPolitics.com average. He is not concerned. He is doing a tax-payer funded bus tour to go talk to the people.
What is he telling the people?
Besides his usual “Not my fault” routine he is telling the people:
I’ll be putting forward a very specific plan to boost the economy, to create jobs and to control the deficit, and my attitude will be, ‘Get it done.’ If Congress fails to pass the legislation the choice [in 2012] will be very stark and the choice will be very clear.
It would appear the President has forgotten the last plan he actually presented on paper was voted down 97-0 by the Senate. What can you expect from a man who also told the people:
Lincoln … they used to talk about him almost as bad as they talk about me. So democracy has never been for the faint of heart
Really, Mr President?
They talked about Lincoln almost as bad as they talk about you?
Yea, I just hit my head again.