It's the Economy, Stupid...

So that's a famous quote by Bill Clinton's campaign in 1992. And I totally agree. No need for these personal attacks by the McCain campaign involving Rezko and Ayers. It's just stupid and unnecessary. Negative attacks have shown to historically work, if only for the fact that people are sheep and the vast majority are too gullible for their own good. But right now, it doesn't work. There is one thing that is necessary to talk about now: the economy. I'll do that now.

I'd like to start with a year ago with Jim Cramer form CNBC's Mad Money. He basically foresaw this calamity that we're in now while talking about the Fed:




Now we've got the Dow, the Nasdaq, and the S&P 500 declining for the last 8 days. The problem now is that the credit markets are frozen. Ali Velshi from CNN, who makes a shitload of sense said on Larry King this:

"But, Larry, I can't believe I'm saying that the stock market is sideshow here. It's not even the one that matters. What matters is your connection to these frozen debt markets, the fact that companies can't borrow money, in some cases, for operations. And that could affect your job and your salary -- the fact you can't get a loan if you needed one right now, a mortgage, and the fact whoever is going to buy your house, if you're trying to sell it, can't get financing for that."

Now that the bailout passed, which I'm not too sure about yet because it still has to yet work, and the highly volatile market is so emotional that it HASN'T worked, it continues to decrease.

Now I've been telling everyone I run into not to panic because it just adds to the fervor that eventually reaches the market and goes round and round and round again until we're in 1929 again and an another Great Depression looms on the horizon. Apparently 6 in 10 Americans believe that last sentiment. I feel sorry for that fact. Let me put it in to perspective with the aid of Phil Town, who like Warren Buffett has made his shitload of money in the stock market.

http://www.philtown.com/phil_towns_blog/2008/10/djia-estimates.html

He explains that the market is overvalued right now, and that's why it's on the decline. Since the credit market is frozen, stocks are heading to their correct values. According to historical prices and price/earning values, we've been expecting this problem and it's been a long time coming since the 1980s. Basically, I must reiterate the Hitchhiker's Guide to the Galaxy: DON'T PANIC. There is a natural ebb and flow to this thing, and it's unfortunate that deregulation and predatory lending brought us to this place.

But, guess who's not talking about the economy? You guessed it, Fox Noise Channel:



Please, please, please, get this bitch off the air. Along with Sean Hannity.

I'll have more on the economy in the coming days.