As I predicted quite accurately, the stock market sank like a stone this morning, dropping 1000 points before stock buybacks and the plunge protection team went into high gear raising the Dow almost into positive territory. Then of course reality set in and the Dow is dropping again 564 points down and dropping fast. I will post real time estimates as I finish. If there were any idiots who bought stock today thinking the worst was over and bargain hunting was available, they are certainly getting burned right now. By the time this article is written it is entirely possible all gains made up from the 1000 points loss, the worst in US history, may have been given back.
This is all happening for several reasons. One, the Chinese stock economy is imploding. The reforms they have made have been too little too late and 20% of their market has evaporated in just the last week. Their real estate holding s have been uber-shaky, think US 2007, and a crash was inevitable. And the Dow is now down 660 and dropping because of this.
There is also the fact that salaries are far too low to keep a consumer economy afloat and that is reflected by the collapse of the retail industry last month in which no one bought anything anywhere. People are starting to notice that companies like Sears, JC Penny, Kohl's and Macy's keep having their stock go up as the profits crater. This is the same thing the Chinese are doing with the exact same results. In other words this can only go on for so long.
Trillions of dollars have been wiped out and the increasing decline in oil shares may affect the derivative market and send banks who own them into a tailspin. Some investors are hitting the panic button today, with Gordon Brown's former economic adviser telling people the end is coming and they should stock up on water and food for when society collapses. This is not some fruitcake but a high level economic expert who helped guide the English economy.
Plunge protection team back at work as Dow now risen to 572. What a roller coaster ride. This is blatant attempt to change the last hour of the Dow and keep some illusion of stability. It will not be sucessful.
Meanwhile, two terrorist attacks were thwarted this weekend, one in Boston and one in Paris. The Paris attack on a train was committed by some Muslim extremist douchebag who made the mistake of trying to do this while several US Marines were on board. Guess who got his ass kicked? USA! USA! I have never been more proud of our armed services than this which showed bravery, self sacrifice and compassion, as they aided a injured passenger even as one of them was bleeding from a knife wound. Needless to say these heroes were congratulated by the French President, Obama and every single American in this country. The goodwill something like this commands cannot be underestimated and for once, this country looks like the one I want to live in, and not some vicious parody of it instead. We need more people like these three heroes: Tony Sandler, Spencer Stone, and Alex Skarlatos. The world needs more like them. My favorite part of this story is that the terrorist tried to say that he was only intent on robbing the train, but failed to come up with a good reason why he had eight extra magazines for his AK-47. This ass is going away forever.
Dow is dropping again, down 624 points. Ouch!
The Boston attack was the most laughable attack I have ever seen, and I mean that literally as I cannot stop giggling about even now. Two of the dumbest people on the face of this Earth brought a trunk load of guns to, wait for it, a Pokemon convention at the Hynes Center here in Boston which they threatened to shoot up on Facebook. They even took a picture of the guns they planned on using. Kevin Norton, 18 and James Stumbo, 27, were at first barred from entering after the plot was told to police and then arrested later at the hotel room when the cops realized guns were in the car with them. A lot of guns. Who wants to shoot up a Pokemon convention and why? These two brain powers are in a lot of trouble and they basically asked the police to arrest them. Stupid.
Dow is now down 662 and falling. How low will it go today? Stay tuned dear readers because we may be headed into uncharted territory. Wednesday's column will almost certainly be about our economic situation unless something else Earth shattering happens first.
687 and falling. Look out below.