Compared to 5 and half years ago- we’re now back to where we started. Compared to ten years ago, stocks have averaged only a .6% increase in value. And for giddy investors there’s always this helpful MarketWatch headline: Legendary Hedge-Fund Manager: This Will End Badly.
What are the markets so exuberant about anyway? Unemployment at 8%? Adjusted for inflation, your take-home pay buys 8% less than it did in 2007. Last time we hit record highs on Wall Street your home was worth 26% more than it is today and that’s counting a recent housing rebound. Some 14 million homeowners still have property that’s worth less today than when they bought it. Mark Gongloff has all the stats in this piece in the Huffington Post.
Perhaps the markets are responding enthusiastically to that newfound spirit of compromise on Capitol Hill? Oh- that’s right, we’re still careening from one manufactured budget crisis to the next.
All these reasons for the stock market not to be happy worry me. It’s a nice fantasyland if you’re lucky enough to have a 401k or an IRA- but if you don’t- this little roller coaster ride means nothing except that a bunch of rich people are doing better than you…and even at that- they’re only standing still.
Hate to be the skunk at the garden party, as they say. And I’ll take the rally since the alternative really sucks. But careful out there…irrational exuberance has bitten us in the derriere before.
When the Dow drops 600 points, I get all depressed and panicky and want to come home and kick the dog. When it rises 423 as it just did today, I get all giddy and happy and skippy (that’s a condition in which you start skipping suddenly, rapidly and uncontrollably).
I’ve tried to wean myself off the market cold-turkey. It’s not working. I pass a TV and shoot a quick, secretive glance to see if there’s a red arrow or a green arrow in the corner of the screen. I actually now hate anything that’s the color red.
I’ve started enjoying long meetings at work because I have, as of yet, not loaded any market-alert apps on my phone and suddenly three hours go by and I remember what life used to be like before my life savings and supposed retirement evaporated before my eyes every other hour.
When the market goes in the crapper, I slap myself for not having taken my money out and invested in gold bullion. When it rockets upward, I congratulate myself for being so calm and level-headed when the truth of the matter is I am actually suffering from Bi-Polar Investment Paralysis, a secondary condition characterized mostly by extreme fear and uncertainty of doing anything remotely financial.
A friend of mine recently recommended Chart Therapy. This is where you pull out a ten year chart of Wall Street’s gyrations and realize these current antics are but tiny little blips even though they look like gigantic Swiss mountains when you’re monitoring them by the minute.
This I know. I am exhausted and weary and I trust those poor men and women on the floor of the exchange must be as well. I think by now we are all longing for the magic words, “The Dow Jones Industrial Average today, was unchanged on low volume and no particularly newsworthy events.”
Can we be realistic here? The debt ceiling “compromise” signed into law Tuesday fixes nothing and ensures continuing uncertainty in financial markets and more ideological warfare in the months ahead. But congratulations Washington for putting the matches away and not burning the house down.
As all sides hold their noses while they get a good look at this really ugly baby, here’s what has not been accomplished.
Deficit Reduction: A little bit- but not much. $2.4 trillion over ten years against a $14 trillion debt with most of the cuts still to be determined by a “Super” committee of 12 angry, feuding lawmakers who start meeting around Thanksgiving. This ought to give us that much more to be grateful for.
Reduction in Entitlement Programs: They’re responsible for most of the debt but even the draconian cuts that automatically take place if our angry, feuding lawmakers can’t come to an agreement- don’t address Social Security, Medicaid or Medicare recipients. Some think this a good thing with a reeling economy causing so much misery but for a so-called attempt to bring spending in line, not a smart move to ignore consideration of the major contributors to the national debt.
Revenue: Two major commissions that set about to solve deficit-spending in the past year both came to identical conclusions. It cannot be accomplished by cutting alone. This is not about partisanship- it’s about math. There were plenty of Republicans on both these panels who endorsed the concept of raising revenue as a part of balancing budgets. See this column in the Washington Post that discusses these commissions and their discoveries. Alan Greenspan, one of the last human beings on the planet you would expect to favor tax increases is now in favor of exactly that. Blogged about it a few months ago.
Rational Process: We will forever more be holding future extensions of the nation’s debt ceiling hostage to the ideological flavors and fights of the day. This has nothing to do with party. Other than whichever party is out of the White House will, from now on, be pushing the nation’s economy to the brink in order to extract whatever it can from perpetually horrified future Presidents, Democrats and Republicans alike.
The Current Economic Mess: The 1,000 point Dow Jones meltdown that would have been expected had the debt ceiling not been passed was replaced instead by a 265 point meltdown out of fears stoked by today’s weak and struggling economy that the debt ceiling agreement does little to address.
But in the end, was it a good thing the debt ceiling bill passed? Well, as Alan Greenspan put it so eloquently in September of 2010, “Our choice is not between good and bad but between terrible and worse.”
I heard the new populist version of President Obama at a Town Hall meeting in Ohio today. I remember this guy. Looks amazingly similar to a fellow I saw campaigning about a year and half ago. Just might work. He’s a very attractive candidate.
One favor though, Mr. President. Is there any chance you could give these fiery anti-Wall Street speeches sometime after 4pm, ET?
You see, everytime CNBC shows you talking about sticking it to the banks, those crazy guys on the floor of the New York stock exchange put in sell orders. Lots and lots of sell orders. The market has now lost 400 points in two days and it seems to coincide precisely to those moments you’re speaking live on cable TV.
I love you, but you’re killing me, man. My 401K is taking a beating.
Next passionate populist-guy town hall speech- 4:30pm. Please? No, seriously.
For the past several weeks, writers and editors at various media outlets, wire services, newspapers, magazines and web sites have been busy little beavers, compiling their lists of the big stories of 2009. As a helpful guide, I have superficially scoured the web for some of these lists, point out some of the highlights and offer a few links to make it all convenient for you.
The grand-daddy of them all is the Associated Press list of the top ten stories of the year as voted on by U.S. Editors and News Directors. The #1 story was the tanking and slow recovery of the American economy.
THE ECONOMY: Despite a $787 billion federal stimulus package, much of the U.S. economy continued to sputter throughout the year. The jobless rate topped 10 percent, scores of banks failed, the federal deficit tripled to a record $1.4 trillion, and stocks fell to their lowest levels since 1997 before rallying. Yet investment banks’ profits surged, triggering public anger and efforts in Washington to crack down on Wall Street bonuses.
For the kiddies, Scholastic.com puts the Obama inauguration at the top of the list:
A Historic Inauguration
On January 20, Barack Obama became the 44th U.S. President—and the country’s first African-American chief executive. Obama’s swearing-in ceremony drew a record crowd of 1.8 million people. That made it the biggest event ever held in Washington, D.C. The crowd stood for hours in freezing cold temperatures to witness the event. “We gather because we have chosen hope over fear, unity of purpose over conflict and discord,” the new President told the nation.
The Twitter World
Reuter’s rounds up the top ten “weird” twitter stories of ’09. Topping their list is one man’s compulsive tweeting- including this live, breathless account from his own wedding:
Standing at the alter with @TracyPage where just a second ago she became my wife! Gotta go, time to kiss the bride” is how Dana Hanna kept the world posted between “I do” and that kiss.
Politico.com offers an interesting list of top ten tweets of 2009. At the top, Newt Gingrich’s tweet for which he later apologized in which he called Supreme Court nominee, Sonya Sotomayor a racist:
“White man racist nominee would be forced to withdraw. Latina woman racist should also withdraw,” Gingrich tweeted. He was incensed over Sotomayor’s comment about a “wise Latina” being able to make a better decision than a white male because of her life experience.
But several days later, Gingrich hit the rhetorical “delete” button. “My initial reaction was strong and direct — perhaps too strong and too direct,” Gingrich said in a Web posting. He regretted calling Sotomayor a racist. Gingrich had done a 180 — within 140 characters.
And though not a tweet, Sarah Palin’s famous Facebook entry on health care “death panels,” simultaneously enraged some and caused others great glee:
Here’s the meat of Palin’s post on Facebook: “The America I know and love is not one in which my parents or my baby with Down syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society,’ whether they are worthy of health care.”
On the Medical Front
The Harvard Medical School’s top story for 2009 is about a story that has turned out not to be a story- the H1N1, Swine Flu pandemic:
After the first several weeks of uncertainty, most of the news about the 2009 H1N1 “swine flu” pandemic has been reassuring. Much of that has to do with the nature of the H1N1 virus itself, which spreads easily and makes people sick, but so far rarely in a life-threatening way. And the word pandemic is misunderstood: a disease is considered pandemic if it has spread globally and affects a larger-than-usual proportion of the population. The disease needn’t be severe.
But a major reason for the calm has been the measured public health response. Plenty of information has been made available (this is the first Internet-age pandemic). A vaccine was developed and put into production, although shortages are a serious concern. Health officials gave us simple, concrete things to do to protect ourselves and others: cough and sneeze into your sleeve, wash your hands often, get vaccinated with both the seasonal and H1N1 flu vaccines, stay home if you’re feeling sick.
This wasn’t the flu pandemic that the experts were expecting. For years, they’ve eyed the H5N1 bird flu virus circulating in Asia to see if it would mutate and become transmissible among humans. Instead, H1N1 emerged in Mexico with a complicated quadruple pedigree: two strains of swine flu, a human strain, and a bird one. Hospitalization and death rates from the new virus have been high in healthy young adults and quite low in people older than 60. One explanation for that pattern is that older people may have some immunity left over from exposure to a previous version of H1N1.
In the World of Sports
The Los Angles Times’ #2 sports story of the year was Tom Watson’s improbable bid for another British Open title, which really was a nearly-great moment in sports history:
Jack Nicklaus was home watching — for the first time in his life, he says — an entire round of golf on television. Tom Watson was watching the flight of his eight-iron land right where he wanted it to on Turnberry’s 18th green . . . and then inexplicably keep rolling and rolling until it eventually trickled off the green. He putted down the slope from the collar and was left with a putt that would have made him the oldest player to win the British Open . . . by 11 years. He missed and lost a playoff to Stewart Cink. “It tears at your gut,” Watson said, but quickly told crestfallen reporters, “This ain’t a funeral, you know.”
The New York Daily News’ top three sports stories were Tiger Wood’s infidelities, Alex Rodriguez’ steroid admissions and, of course, the New York Yankees 27th World Series title.
Computer World’s #2 story is Microsoft’s launch of Windows 7, the new computer operating system that replaces the atrocious Vista OS:
Microsoft launches Windows 7 — we can all move on now
On Oct. 22, Microsoft CEO Steve Ballmer took the stage in downtown New York at the lead event for a somewhat — for the software giant — soft-edged launch for Windows 7. Ballmer presided over a day of speechmaking and sales promotions in cities worldwide. But the events were on the whole smaller than the usual major Microsoft launches. The scaled-back hoopla and the marketing mantra of “simplicity” fit Microsoft’s characterization of the new OS — above all, faster and more straightforward to use than its predecessor, Vista. That much-maligned OS was plagued by hardware compatibility problems, slow performance and annoying system alerts. The older Windows XP, as of the Win 7 launch, was still being used by more than 70 percent of computer users. Microsoft, no doubt happy to turn the page on an embarrassing chapter in its history, says Win 7 is being adopted faster than Vista.
Celebrities and Wannabe Celebrities
E-online has a first place tie for its entertainment stories of the year. It’s Tiger and the death of Michael Jackson.
Something called TVSquad.com has a list of the top TV reality show scandals of the year. Balloon Boy was #1 and coming in 4th and how could anybody’s list be complete without them- the notorious White House party crashers, Michaele and Tareq Salahi.
Special Bonus List
Saving the best and most lascivious for last, HuffingtonPost.com lists and has a gallery (that shows nothing, by the way) of the top sex tapes of the decade (excuse me- but how 1990’s):
Paris Hilton wins top honors.
Tomorrow…helpful links to lists of the best stories of the decade of which the above item was but a mere tease.