DOW 6000?

The DOW stock market index could be as low as 6,000 by the end of this year.  Sound preposterous?  Not from my perspective.  In fact, that might be conservative.  Right now we are in the worst stock market decline since – well, you know by now – the Great Depression.

Since the November 4 election of President Barack Obama the DOW has slide over 2,000 points, from 9,625 to 7,552 today, or a whopping decline of 21.5% in just two-and-a-half months.  Now, before all of you Obama-kins jump on me, I’m not suggesting he is the cause of such a precipitous drop.  However, usually – not always – but usually, how the market performs right after a presidential election is a good indication how Wall Street and the American investor feels about the incoming administration and their faith in it reconciling the financial difficulties we face.

The big question is:  Is the Obama presidency entering the financial melee toward the end, in the middle or right before it all falls apart?  We are, in many cases, in uncharted financial waters.  Year-to-date the DOW is down 16% and in the last 12 months it has declined 37%.  Since February, 1999, ten years ago, the DOW is down almost 19%.  For all those Baby Boomers who, ten years ago, were dreaming of a comfortable retirement, their dreams have been shattered beyond likely recovery.  Those already in retirement have been hammered as well.

Will it get better from here?  I don’t like being the pessimist serving up sour grapes, but we have a very long haul before getting out of this financial pit.  If you have had your ears on at all, you know by now that the Obama/Democratic “stimulus” package is much less about economic stimulus and more about funding pet projects that will not stimulate the economy or put massive numbers of Americans back to work.  If this effort fails – and most educated bets by economists is that it will – where will we go from here?

Already our chief sources of borrowing for this fiasco – China, Saudia Arabia, Japan and other Mid-Eastern countries are having second thoughts about accepting any more IOUs from the crumbling US of A.  If they shut the doors, the Great Depression will look like a “cake walk.”

So, will the DOW hit 6,000 before year-end?  I hope that is as low as it goes.  However, as the stock market continues its march southward, more and more investors – even the most astute – will be fleeing for the exits, thus causing a further decline.

Source: https://ampatriot.wordpress.com

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