Not much time to write this morning…gotta rush…
The Dow was up 9 points on Friday…following a week of big news.
Congress passed a bill permitting the US government to take over the health sector…about 17% of US GDP. Let’s see. The feds don’t have any money, right? They’ve got the biggest deficits ever, and will have to borrow $2.4 trillion this year just to keep the lights on.
And now comes news that Social Security has gone into deficit for the first time ever…and 7 years ahead of schedule.
The feds took over the mortgage finance industry last year. Practically every single mortgage written last year was underwritten by the US government.
And they took over the auto business too. They should be able to do for autos what they did for passenger trains. That is, they should turn Detroit into an Amtrak…which is to say, a Zombie City, if it isn’t one already.
Then, there was the bailout of Greece. And not only that…there was a weak auction of federal debt. A few years ago, any one of these bits of news could have walloped the stock market.
But investors didn’t seem to know what to do with the news. The Feds had taken over another big chunk of the economy. But what to make of it? Was that good news or bad news? The stock market seems unable to make up its mind. Finally, it ended the day with less than 10 points of movement.
for The Daily Reckoning Australia