Daily Investment Interpretations

February 3, 2009

2009-2-3    The U. S  markets rose today. The NASDAQ Composite added 18 (1.46%) to close at 1,516, the Dow tacked on 141.53 (-1.78%) to end at 8.078, and the S&P 500 annexed 13.07 (1.58%) to 839. Oil climbed slightly to $41.03, while gold gave up $14.70 to close at $892.50. The VIX fell 2.46 to 43.06. 
    We'll start with yesterday's and today's comments by Paul Krugman.
Permanent Link to Protectionism and stimulus (wonkish)
Permanent Link to Disappearing dark matter
Permanent Link to I do not think that word
Stimulus/bailout confusion
Permanent Link to Depressing economics
    I think that this comment deserves special attention. Dr. Krugman is concerned about the number of influential economists who seem to be ignorant of the lessons of the Great Depression and the Japanese "lost decade". He concludes, "
So yes, we can have another depression because those who refuse to learn from history may be condemned to repeat it."
Permanent Link to More on protectionism (wonkish)
Permanent Link to Housekeeping note
Permanent Link to Social Security hysteria lives
Permanent Link to Lemon credit
Permanent Link to Paradox of thrift
    This also deserves special attention. Dr. Krugman points out that our new-found thrift (Americans' saving more, spending less), praiseworthy as it may be on an individual basis, may be leaving household balance sheets worse than ever... like everyone selling their stocks at the same time, driving down the value of their remaining investments.
Permanent Link to Bipartisan bromides
    Dr. Krugman cites the "utterly different economic doctrines" of Democrats and Republicans, stating, "Republicans believe in a doctrine under which tax cuts are the universal elixir, and government spending is almost always bad."
    Dr. Krugman's Monday editorial is entitled Bailouts for Bunglers.
    I think it possible that we could see the stimulus plan thwarted through political gridlock over opposing economic philosophies. It would seem to me that the Republican party would profit if the Obama Administration fumbled an economic recovery, and that, shy of blocking fiscal stimulus programs, Republicans would have an opportunity to drive hard bargains in return for sufficient bipartisan support to pass the stimulus packages. I'm not saying that the Republican Party would put the interests of the Party above the interests of the nation. I'm only saying that there would seem to me to be some rewards for the Republican Party for playing "hard to get".
    Some other interesting articles are:
Chuck Jaffe: Government's stimulus plan won't arouse consumer spending
Kellner says Washington doesn't get it
Ashbaugh says S&P stuck    
    Mark Hulbert writes, Was that a Dow Theory sell signal?
    Ben Stein puts professional advice in perspective in Financial Gurus: They're Only Human.