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WN: Wall Street sinks after election as "fiscal cliff" eyed -


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The Dow industrials lost more than 300 points in a sell-off on Wednesday that drove all major stock indexes down over 2 percent in the wake of the presidential election as investors' focus shifted to the looming "fiscal cliff" debate and Europe's economic troubles.

http://www.worthynews.com/top/reuters-com-article-2012-11-07-us-markets-stocks-idUSBRE89T0LN20121107/

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weren't we expecting that???

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So what do you do when one of the very few economic analysts to predict the financial crisis would strike in ’07 or ’08 says another, even more catastrophic economic collapse will hit the United States economy in 2013 or 2014?

The Solution: “You know, rather than the recession being resisted, it should be embraced, because the disease is all this debt-financed consumption. The cure is that we stop consuming and start saving and producing again, and that’s a recession. And sometimes, you know, medicine tastes bad, but you’ve got to swallow it.”

http://ivn.us/2012/10/28/peter-schiff-who-predicted-the-financial-crisis-forecasts-the-worst-to-come-around-2013/

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I expect the stock market will rebound within the next couple of days, if not a few weeks. Why? Not because of anything positive financially, but because we now live in an an alternate, fantasy universe. Look for it to go up 500 points or so, at least.

Let's say the mastermind, Wall St. designers - along with their government cronies - set out to design a better car engine temperature guage. First - they would have to decide what was wrong with the old style temperature guage. You know, the kind that actually showed the temperature of the engine - and alerted the driver that the engine might be over-heating and in danger of destroying itself.

It would then be encumbent on the driver to address the situation. He would likely a) shut off the engine, to prevent further damage, and b) set about finding a mechanic to fix the problem.

The mastermind Wall St. designers - along with their government cronies - say "that's no good, as it causes the driver undue stress" - so their improvement might be to make a guage that never goes above halfway. Now while this sounds silly (as it defeats the purpose of even having a guage), it DOES prevent the undue stress to the driver of having to see a guage that's in the red hot zone.

Unfortunately, it DOES NOT prevent the stress to the driver of having a blown engine - due to its overheating.

Technically, the Stock Market was never designed to serve as the "temperature guage" for an over heated economy - but that IS the purpose it ended up serving when the economy crashed in 1929. Had people been better at reading the signs in the stock market preceeding the crash, perhaps the effects might have been blunted (or eliminated.)

My point in all this is that financial "geniuses" have put layer upon layer of "protection" in the stock market, supposedly to prevent catastrophic crashes. The down side however to all this (and I'm certainly no financial wizard - just a layman) is that I do not believe it can reliably be an indicator of the actual health of the economy.

The alternate reality I referred to earlier reflects that the way I see it, news that SHOULD make the market go down - sometimes makes it go up. And news that should make it go up - sometimes makes it go down. Or vice-versa. It's just not a reiliable predictor any longer.

Which would be fine, I suppose . . . if we could remain in an alternate universe. The only problem with alternate, fantasy world universes is they inevitably end - and the real universe appears.

Blessings!

-Ed

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If the economy was a car, they've already driven it off a cliff. Gravity will do its job sooner or later. Oh, the car and the gasoline were bought with borrowed money. Huge portions of our taxes go to pay interest on our debts. UM?, so many things no longer belong to us. Trying to make the overall economy smell rosy is impossible. I find it insane that our country doesn't even have a budget. There's talk of reducing the deficit, but all that means is they plan to spend less of what we don't have. In other words, the debts are going to continue to rise and sink us into a deep, dark hole that we probably can't climb out of. It's like having $10 a day and spending $15. And, part of the $10 is borrowed. This type of silly math obviously won't work for long.

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