BY PANOS PREVEDOUROS PHD – I am sure that my Obama loving friends celebrated well last night. I’m glad they did because it’s pretty much downhill from here. This market reaction is only a tiny harbinger of what’s to come.
Nothing personal with the President, but as Margaret Thatcher put it, Socialism lasts only as long as other people’s money last. The math is both simple and brutal.
I hope you don’t think that only the top 1% of income earners lost a bit of wealth overnight. Government and private company retirement funds, individual 401Ks, university endowments and most other savings and investments of the remaining 99% are in the stock market. (And in US bonds and T-bills that pay less than inflation so people’s savings diminish with time while pension under-funding is growing.)
Of course Californians voted for added taxation to themselves. The outcome of this will be none other than … Ross Perot’s “giant sucking sound…”
These days the world is running at the speed of the Internet. Trends develop and bubbles burst quickly. So all of us under 75 stand a good chance in finding what Greece is all about where, among other things, unemployment for people under 25 years old is at about 50%.
Celebration will quickly turn into sequestration. The Treasury has quietly informed the President that the debt limit will be reached before the year is out.