One of the nice things about being poor is not losing money in the stock market. I almost feel like a lucky ducky.
I take it the media are linking today’s stock market plunge to the S&P downgrade, which makes Professor Krugman crazy —
They really are trying to make my head explode, aren’t they?
Once again: S&P declared that US debt is no longer a safe investment; yet investors are piling into US debt, not out of it, driving the 10-year interest rate below 2.4%. This amounts to a massive market rejection of S&P’s concerns.
The S&P downgrade may be contributing to investor unease, but today’s plunge was more likely caused by “investors suddenly noticing just how weak the fundamentals are. Also, the mess in Europe,” Professor Krugman says.
I’d say S&P jumped the shark. Or maybe they did a few years back, when they stamped smiley faces on all that mortgage debt.
The reason the market is dropping is because people around the world are realizing that we Americans don’t make anything anymore – except for people who got into the previous market at $7,000 and out at $12,000, and into this market at $8,000 and started getting out at $12,600 a few weeks ago.
We make a fair share of those people. They don’t do anything. They don’t work anywhere. They don’t “earn” anything – they just get, or inherit, money. And all that they do, is speculate.
And I think it’s starting to dawn on people that while these people are buying low and selling high, the rest of us don’t have two quarters, let alone silver dollars, to rub together.
DOW – $30,000?
HA!
More like DOW – $3,000.
I’m kidding.
At least I think I’m kidding.
Someone help me out here – I am kidding, right?
Between Krugman and Nate Silver’s Fivethirty Eight blog today, S&P is in danger of being downgraded, I’d say. My vast holdings are in federally insured holdings, which is AA+, which is good enough for me.
http://youtu.be/-3DdNYga6A4
Somehow this seems fitting, if only by title. When I was young and struggling the middle class was tinged with condescension from above and resentment from below. But, the American middle class was a powerful economic engine, which seems to be sputtering, as the uber rich consider the proper method of disposal.
Now, I mainly see the middle class as the people I have known, like the sterling examples of factory workers who, by virtue of being represented by a union, made a decent living and sent their kids to college, back in the day when colleges were more than fancy trade schools. I suppose they formed the extent of my “faith in the system”.
I am still in the confused and numb mode. Krugman’s appraisal is disturbing, because it makes sense. My parents brought me up to live frugally, save for a rainy day and believe in America. It seemed like good advice at the time.
At least I may see the day when it suddenly strikes those self proclaimed “John Galts” that they were really someone else all along.