Tuesday, February 27, 2007

It is not the end of the world as we know it

To listen to the major news networks, one would think that the dips in the worlds major stock exchanges today is the end of the world as we know it. It is not. This is what is called a market correction.

For far too long, due to China's currency manipulations, China's market values have been inflated. That change a bit last night, when China's markets fell. As a result, markets fell in Europe, and then the United States.

Is it good news? No. Is the end of the world as we know it? No.

The China bubble was bound to burst, and the European and American investors were bound to feel the consequences of that in the market place.

I believe this happened as a correction, but there were also two other factors to keep in mind. One factor was the political venerable bede of our time, Alan Greenspan, remarking on Monday that a recession was likely. That was worth a couple of hundred points down on the DOW. The other was the assassination attempt on Vice President Cheney in Afghanistan. Such things always make markets go bear.

In other words, people, relax. Yes, I know the news does not seem good. But, take a deep breath. Don't dump your investements. Just stay the course and take a deep breathe. The American, European, and yes, Chinese economies are very strong by historical measures. The events of today, and perhaps of the next few days will just be a hiccup.

The only way this could result in a recession or depression is if investors overreact and start selling at high rates.

If that happens, which I admit it could with President Bush's approval ratings so low and such an angst in America, then Katie bar the door.

But, it won't be the market's fault. It will be the people's fault for overreacting to a logical adjustment.

8 comments:

  1. This is the end of the dreams of one world government you and your lackies have, Mr. McCarty.

    This is the end of that farce. Soon, when the chaos hits, you will understand the order of the League of the South.

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  2. market was down 2-3%, but my 401K was up almost half a percentage point yesterday. i feel pretty darn good.

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  3. People who invested in China are suffering? Hot damn. They fired me for cheap Chinese labor three years ago.

    YIPPEEE

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  4. Anons 1 and 2, you are nuts, and probably have no investments. Earl, you have the right attitude. Stay the course right now. It might seem crazy, but historically, it is not.

    I saw where Japan's markets were tumbling so far, time will tell how crazy the media makes this.

    But, remember to think long term.

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  5. Brian, like a magnitude 7 or 8 earthquake, this was an overdue adjustment. Black helicopter fans may guess that it was a pre-emptive counterstrike to Chinese dumping of hoarded and whored dollars as an economic weapon to hit the US in a Tom Clancy-esque fantasy. If it was organized economic warfare, we might never really know, but I'd love to see an audit of the "blind trusts" of all the nabobs in DC and what gains a Pelosi may mave been bought off with in this process.

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  6. Yes, I agree Brian, they forget the precept, buy low, sell high.

    And since I obviously have the nice new strain of flu and feel terrible I guess the following tune applies;"It's The End Of The World As We Know It (And I Feel Fine)" but when I get this bug off me head to the nearest shelter.

    I know Earl, it is not metal, but still 80's I believe.

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  7. "lackies", who is the new slack jaw? darn brits. LOL

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  8. i choose Romney, because God wants me to.

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