‘In the end more than they wanted freedom, they wanted security. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for was freedom from responsibility, then Athens ceased to be free.’
From Barack Obama’s point of view, what’s the worst thing that could happen now? A big drop in the stock market. It will make people feel insecure…they’ll think something is wrong. And they’ll be right.
It was partly to keep stock prices up that Ben Bernanke launched his all-you-can-eat QE programme when he did. But wantin’ ain’t always gettin’.
‘Stocks fell on Tuesday, driving the Dow industrials to the biggest drop since June 21, as weak results from index members DuPont and United Technologies showed profit growth is slowing.
“This earnings season has so far produced a string of disappointments from companies falling short of Wall Street’s expectations. With results in from 29% of S&P 500 companies, 37% have exceeded revenue forecasts, far short of the 62% average, and just 57.2% of the S&P 500 names reporting so far have beaten earnings forecasts, according to Thomson Reuters data.
“That would be the worst percentage of companies beating earnings estimates since the fourth quarter of 2001 – should it stay at the current level, the data showed.’
Dear readers should be out of stocks completely. They may go up in price…or down. But there’s not enough real growth in the economy to justify the risk of owning them now.
Right now, a rising stock market favours Obama. Falling stock prices favour his opponent. When stock prices are going up, people figure all is well. When they are going down they get sour and vote for a change.
for The Daily Reckoning Australia
From the Archives…
China’s GDP Growth Ponzi Scheme
19-10-2012 – Greg Canavan
An Australian Property Boom and Bust all at Once
18-10-2012 – Greg Canavan
The Fed’s New Stooge
17-10-2012 – Bill Bonner
Discordian Religious Advice for the Investor
16-10-2012 – Nick Hubble
Electric Cars and Platinum Mines
15-10-2012 – Dan Denning