market crashes after cash for clunkers joke, page-2

Obamanomics in the USA has been an unmitigated disaster. The focus should have been on the creation of wealth/jobs in the private sector. Obama concentrated on Marxist concepts of state control, that is why the debate in Washington for the last three months has been about State control of the Health sector which is 1/6 of the economy. This has been a pointless debate when unemployment / underemployment in the USA is calculated at around 18% at this time. Throw in all of the tax increases being proposed in Washington and you get a perfect mix for a revolt against Obamanomics coming from the Democrats who are now totally in control of Washington.

Goldman Sachs was an early backer of Obama because they could manipulate him to provide massive financial support to the banking sector. Thus Goldman made multi billions in profits while Main Street went in the opposite direction and continued to loose jobs. The stockmarket boomed because of massive liquidity injected by Obama's Fed.

Last weeks GDP "growth" news was a very distorted attempt by the White House to convince everyone that the economy is growing strongly because of State stimulated jokes like cash for clunkers. The market started tanking over a week ago and now many commentators are predicting a sharp correction. Robert Schillers PE studies going back over a hundred years of market action indicates a correction of 13% in the S&P other commentators peg the correction in the 5-25% range. The sharp increase in the VIX and the rise in the US$ is indicating that a correction is now certainly underway. How far will it go? no-one knows, but IMHO it will knock down the A$ and give the ASX a decent correction, the specs could get hit quite hard as liquidity tends to dry up very quickly in this sector on market corrections.