It was a staggering picture on nightly news. A huge wall showing the 500 stocks that make up the S&P. Normally it’s a mix of green and red boxes. Today it was a solid mass of red. Not one stock had gone up.
Now you wouldn’t think the change in S&P credit reating from AAA to AA+ shouldn’t have been that big a deal. Japan went from an AA to an AA- without much effect. But it was the first time it happened to the US. Plus China publicly upbraided the US for “living beyond its means”.
The reaction on “the street” to the S&P downgrading was swift and cruel. US stocks lost 6% of their value.in one day the most since the darkest days of 2008. The Bank of America stocks lost 20% of their value. There were rumors that certain hedge funds that had been buying stocks on credit suffered huge losses.
But maybe the market is actually getting real. The US is in debt in every way possible, government debt, balance of payment debt, consumer debt, debt held by other countries. US political leaders belong to a weird religion, the Cult of No Taxes. They’re War Junkies and are suckers for Wall Street deadbeats. If China wasn’t already holding a trillion and a half of US Treasury Bonds, the US would long ago have been facing crippling IMF austerity demands in exchange for more loan money. Maybe the market is seeing the real value of US stocks.
Here’s Where We Can Cut
The stock market flaks explain the latest stock market dive as “the market” showing lack of confidence in government leaders to really do something about U.S. debts. We should have cut even more and then “the market” would be happy.
I partially agree. Let’s cut trillions of bloated unnecessary spending. Cut the wars, cut the bases and bring the war dollars home. How many wars are we invovled in? Iraq, Afghanistan, and Libya of course, the drone war on Pakistan and Yemen, war by proxy in Somalia and the Congo, Columbia. Probably some I’m missing. Are we safer? And how about closing military bases. Why the hell do we need between 662 to 1000 overseas military bases? (depending on whether it’s the Pentagon or anti-war.com doing the counting) Do we still need 268 bases in Germany to protect Deutsche Bank from a Soviet invasion?
Shrink imperialism till it’s small enough to drown in a bathtub, to paraphrase a very important small minded Republican thinker.