"An era can be said to end when its basic illusions are exhausted." - Arthur Miller

Tuesday, February 27, 2007

Dow Jones Take A 416 Point Tumble

The Dow Jones took a 416 point tumble, the biggest one day loss since 9/11. The cause seems to be related to various inconsistent economic reports such as a drop in housing prices, but increase in consumer confidence. This despite a recent report that more then 16 million Americans are living below the poverty line. The highest number in US history. Oil is going up, but gold is going down. Then there is a possible recession coming towards end of 2007 according to former Federal Reserve Chairman Alan Greenspan.

Another factor, for reasons I don't understand, is the failed attack on Dick Cheney by a suicide bomber during a visit in Afghanistan. Why this would have an impact isn't explained. Best guess is because Cheney has instrumental in the military spending and funds that are going to multiple military contractors he is friendly with. His death would more then likely hit their bottom lines hard.

Frankly I am surprised it took this long for the Dow to take a hit as the US market is in some odd bubble where the rich and large corporations are benefiting but pretty much everyone else isn't. Considering its the lower and middle class that do the spending that keep the economy engine going, the growth of the Dow Jones hasn't made much sense. The stock market is saying the economy is strong while every other indication is saying there is a problem. Something had to give and it looks like it was the stock market first.

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