Today the Dow closed below 10,000 for the first time since February 10, when it finished at 9,908. Trying to figure out which way this thing is headed has proven difficult.
Such high volatility is often a feature of tops and bottoms.
Again we find that the markets were trading as the inverse of the dollar, which had another strong day.
Money sloshed this way and that way. Etcetera and so forth.
I don’t necessarily want to diminish the psychological importance of closing below a ‘big round number,’ but it hardly has any real significance at all.
The real problems remain firmly in my view.
There are four truisms that form the core of my near-to-intermediate-term outlook:
- You can’t ‘solve’ a crisis rooted in too much debt with more debt.
- Never confuse a solvency crisis with a liquidity crisis. The former is what we have; the latter is what the central banks have been vigorously attacking.
- You can’t print your way to prosperity.
- Real wealth and paper wealth are not the same things.
To these I would add a few corollaries, such as:
- If you punish the prudent and reward the failures, eventually all you’ll have is failures.
- Doing the same thing that caused the problem but expecting a different outcome is the definition of central banking.
by former_user 
