First, some notes about today's market ....
- At its low today, the Dow had shed more than 3700 points, or 26% from its high last October. That's roughly what the entire index was worth in Jan. 1995.
- The S&P was off 430 points or 28% from Oct '07 high.
- The average bear market decline in the past 50 years is -32% ... so clearly history would suggest there's plenty more downside risk — specifically — about 800 points for the Dow if this bear market is simply to be an average one.
- We have officially been in a bear market now since early July — or about 90 days — and stocks have been declining for almost a year (Oct 9, 2007 peak).
- But again — both durations are below average — with average bear market lasting 14months of which about 5 months occur AFTER the 20% breach .
And now, consider this ...
"A mediocre idea that generates enthusiasm will go further than a great idea that inspires no one." - Mary Kay
Anything come to mind when you read this?
For me, 700 billion things come to mind, foremost of which is the bi-partisan failure to properly sell this banking system rescue plan (by any name) to the American people. Even as Congress prepared to vote, citizen complaints were being acknowledged — but ignored — under the guise that, ''the risk of doing nothing would be even worse''... which in itself left John Q. Taxpayer with the horrid option of chosing between bad and worse. Is it any wonder most people have chosen to walk out of the proverbial car dealership in the face of that choice? I mean, Congressman John Boehner politely refered to the bill as a ''mud sandwich'' — and he was for it!
I also bristle at the inference that people outside the financial industry don't really understand the complexity of the issue.
Again, a huge sales pitch error was made since virtually everyone earns, spends, saves, invests and borrows money within our financial system — not just the ''fat cats'' on Wall St. And I think Americans of all walks largely do understand the inter-connectedness and importance of the national/global economy. But if people really don't understand what's at stake — make them, educate them and as Mary Kay said, inspire them!
Although Hank Paulson tried, his gravely-voiced testimony probably brought fewer converts into the tent than his knee-delivered plea to Nancy Pelosi.
Where was Ben Bernanke's expertise in the Great Depression when a vivid portrait of a fianancial meltdown was really needed?
If this plan is ever going to get sold — than somebody better start enthusiastically selling it... and maybe throw in a guarantee too.