Forgive my grammar in the title, but I couldn’t think of a better way to express what is going on with the market, and to a greater extent the economy.
Today, the Dow was down 290 points, bringing the average below 8,000. Not so surprising given what has been going on over the past year in the economy, right? Well, given the recent suspension of so-called “Mark-to-Market” accounting rules, as well as talks to reinstate the “UPTICK RULE“, this actually is a surprise. See, it becomes hard to bet that a company is failing when the bank (US Government) makes rules that say you can only bet on success.
Recently both of these practices have come under attack by the government. To solve the problem, the SEC, along with Barney Frank and ultimately Barack Obama have been working to change these rules to ensure (read: force) the market to go up. When this happened, the market had it’s best week since the first Depression. That was no surprise.
See, think of the market as a 100 yard dash. Each company is a runner, as are people who believe that the companies will fail. The officials of the race (the government) don’t like people to bet on negative outcomes, kind of like this guy:
So what they do is tell the runners who think the companies will fail to start 15 seconds later. And they have to run 110 yards instead of 100 yards.
So the idea that the market would still go down after these radical steps should frighten people. Wether the market starts coming back sooner rather than later, we’re screwed right now. We’re screwed, and the politicians out there are fiddling while America burns (through our children’s money).