We've already hit the bottom in terms of where the DOW is going to go. I'll break this down into three of the most important factors that reflect the health of the economy, the DOW, GDP, and the unemployment rate.
1) DOW - I think we have already hit the bottom. I don't see any facts that suggest to me we will dip back below 6,600. We do need to work on addressing the national debt very soon. But letting the economy stagnant could have potentially caused the debt to sore even higher if we had sunk into another depression. Sometimes you have to spend money to make money.
And frankly deflationary pressures on the dollar recently have been a much bigger threat than inflationary pressures. And I find it extremely disingenuous that many of the same people who are now complaining about the national debt were the ones who were just fine with the Republicans spending like drunken sailors in Congress since 2000.
2) GDP growth. We saw a pretty sharp drop in the 4th quarter, sharper than even a lot of the grim predictions. You are going to see negative GDP growth in Q1 too, but it is hard to say whether it will be as bad as the Q4 numbers. My guess is that in relative terms they will not be. Q2 remains to be seen, but I don't think the market as a whole is as jittery as it was. I don't think they will be as grim as the Q4 numbers even if they are in the negative. My reasoning is that consumer spending has risen slightly, which is a good indicator.
3) Employment. Employment we will probably see drop some more. Its hard to say when it will stop, as employment is kind of a different animal altogether. Its the first to go down and sometimes the last to go up. We may see 10% unemployment, or maybe even 12%. But then again we might not break 9 or 9.5%. This is probably the hardest to predict. Note: We are currently at 8.5% and lost 600,000 jobs last month.
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
