CHESSNOID

The stock market took a hit the last couple of days. The excitement of the federal reserve rate cuts and the realization that the sub prime bail out are both not real long term solutions to our economy’s problems.

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I know we talk about and read many headlines now that we have a major credit crunch and a spiraling foreclosure epidemic out of control. According to Bloomberg:

“We’re only halfway through the housing shock,” said Ethan Harris, chief U.S. economist at New York-based Lehman, the fourth- biggest U.S. securities firm by market value. “It’s just a matter of time before the weakness spreads to the rest of the economy.”

The housing market collapse has been anything but the “soft landing” that Federal Reserve Bank of San Francisco President Janet Yellen and David Lereah, former chief economist at the National Association of Realtors in Chicago, predicted for real estate at the start of 2007.

Median home prices declined in the U.S. this year, the first annual drop since the Great Depression, according to forecasts from the National Association of Realtors.

The federal reserve has actually made great attempts to try to get our economy jump started again. Last week there was even an impressive united front of Central banks from many countries. That makes it a little more obvious how bad this recession is going to be and how far reaching it is. For me, this is a confirmation of a global recession.

Usually at about this time we head off into the infamous January effect where the stock market goes up from investors and institutions selling stocks to make their returns look good, lock in profits, and get rid of bad stock holdings for tax purposes. Also, since this is an election year, we really should have a strong start as all the candidates promise new programs and reforms to take our country financially in the right direction.

I think one of the problems that our economy is experiencing is due to the fallout of the War in Iraq. Not too many people have mentioned it in fear of being labeled as being unpatriotic, but it is obvious the War in Iraq is hurting our economy. This is actually a greater problem than our sub prime debacle. This useless war is sucking up all our resources and diverting into the hands of the War Profiteers. Whenever I hear the president ask for more funding I become disgusted because I know the money is not going to our troops. They are going to defense contractors stealing tax money with overcharging of goods and services. I have written about this and many movies have already been made addressing these issues. Do you see the connection of all the money leaving our country and the state of our economy? If you don’t, read this old post: Opportunity Cost of the War

Is it possible for our country to financially recover while we are wasting away our resources? This administration has wasted away our wealth in record time and have indebted future generations not yet even born.