Stocks Finding Bottom

After the 2008 Meltdown stock market plunge, I figured that the 30% drop might have identified the real bottom. I thought our real GDP was about $11 Trillion worth of goods and services the US consumed to survive and pay the bills.  This didn’t include bubble-making from QE or excessive federal spending. But Obama turned on the bubble machine and ran up the debt to $19 Trillion. 

Now the stock market is at it again, looking for bottom. We watched all governments blow $Trillions and now the myth of the global marketplace is cracking and global recession is at hand.  Most indebted European countries are scrambling to reduce their debt, but not us and not Japan. 

The Dow peaked at 18,000 in 2015 and settled back to 17,500 and now has been flirting with the 15,000 mark. Stocks have traditionally been expected to keep a price/earnings ratio of 14:1, but now they don’t.  Stocks have also traditionally factored in inflation in their pricing, but our decimated global consumers are not spending what little they have, so we are enjoying a bit of deflation. The dearth of jobs has killed demand for homes, millennials are not getting married or setting up households and college grads are continuing to do minimum wage jobs to remain barely self-supporting. Our welfare ranks have swelled and more immigrant welfare customers are on their way to our welfare state. 

Some have said, we just finished the first 7 years of a 25 year long global depression and it looks like they may be right.  Governments need to stop spending on everything that isn’t critical; that would be about half of what they currently spend.  But rather than finding a way to send refugees to camps near their own countries for 10% of the cost, they are still bringing them in despite citizen protests.

The “happy talk” we get from government, corporations and the media should be tempered by the layoffs these liars are planning to implement. Government needs to get out of industries that need to be in the free market.  We won’t come out of this depression until we begin to cut government spending and pay down government debt.

Also in play is the fact that the stock market will continue to go up so active investors can take profits and it will go down so active investors can buy stocks.  Institutional and personal investors will tend to buy and hold.

Norb Leahy, Dunwoody GA Tea Party Leader