It is like watching a train wreck in slow motion.
For many people the reality of the situation with our economy is all but surprising. I personally find it more surprising that the economy is still doing as well as it is given the regulatory weight the Obama administration has put on it. I believe that serves as proof of the resiliency of capitalism combined with the American workforce, but the economy has its limits.
President Obama sees this all as a “run of bad luck.” That statement alone can go one of two ways: 1) Obama is absolutely clueless about why the economy is struggling and how to fix it or 2) he didn’t expect things to turn as bad as it has before the elections – or in other words he is lying. In either case America suffers.
Watch the red. The DOW dropped over 400 points today!
Stocks tumbled amid growing fears of a global recession, as investors confronted a grim mix of U.S. economic data and fresh concerns about Europe’s banks.
The Dow Jones Industrial Average ended down 419.63 points, or 3.7%, to 10990.58. The Standard & Poor’s 500-stock index dropped 53.24 points, or 4.5%, to 1140.65, while the Nasdaq Composite lost 131.05 points, or 5.2%, to 2380.43.
Jobless claims continue to rise:
Jobless claims climbed by 9,000 to 408,000 in the week ended Aug. 13, the highest in a month, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a rise in claims to 400,000, according to the median forecast. The number of people on unemployment benefit rolls rose, while those receiving extended payments fell.
Treasury yields at record lows while gold soars:
Stocks plunged while Treasuries rallied, pushing yields to record lows, amid growing signs the economy is slowing and speculation that European banks lack sufficient capital. Gold climbed to a record, while oil led commodities lower.
The Standard & Poor’s 500 Index tumbled 4.5 percent to 1,140.74 at 4 p.m. in New York. The Stoxx Europe 600 Index lost 4.8 percent in its worst plunge since March 2009 and Germany’s DAX Index slid 5.8 percent, the most since 2008. Ten-year Treasury yields fell as much as 19 basis points to 1.97 percent as rates on similar-maturity Canadian and British debt also reached all-time lows. The dollar gained versus 15 of 16 major peers, strengthening 0.6 percent to $1.4336 per euro. Gold futures rallied as much as 2.1 percent to $1,832 an ounce, while oil slid 5.9 percent.
You can rest easy though, because Obama is working a recovery plan now. Wait, he’ll get back with us in September after spending some time in Martha’s Vineyard. Mitt Romney’s comments on that are right on the money:
“Now, Martha’s Vineyard is in my home state of Massachusetts, so I don’t want to say anything negative about people vacationing there. But if you’re the president of the United States and the nation is in crisis – and we’re in a jobs crisis right now – then you shouldn’t be out vacationing. Instead, you should be focusing on getting the economy going again.”