NEW YORK (CNNMoney.com) -- Stocks tumbled Monday, with the Dow and S&P 500 falling to 12-year lows after insurance company American International Group's huge quarterly loss added to worries about the financial sector and the economy.
The Dow Jones industrial average (INDU) lost almost 300 points, or 4.2% to end at 6763.29, its lowest point since April 25, 1997.
May you be right. This country needs more optimists.
By the way, this was a pretty good discussion of the "green" aspects of the stimulus (although fairly wonky), and gives you a sense of how Washington types are thinking. I put it on my iPod:
I have heard Roubini say that 5400 is the floor. Not that it will get that low, but that it is very unlikely to go below that.
P/Es for stocks are still too expensive by 70s standards.
Could go lower than 5400. But as Yogi says, "It's tough to make predictions, especially about the future." Eventually we have a recovery, then what? Don't forget that there is an energy crisis that is only temporarily on hold, which (to make a prediction) will come back with a vengeance during recovery. Nobody here seems to question that, beyond the proximal cause of the financial crisis, we are still dealing with a economic system based on growth that is ill-suited for a finite world. To that extent, Barack Obama and nearly everyone else is working within an unsustainable paradigm.
CBS Evening News on Saturday covered the economic situation at Toyota. It is not encouraging, and by the time the story aired, it made on mistake. At least one Toyota dealership in the San Francisco area has closed down.
I think that the observation of a Rockland, NY dealer is telling. He said that people are no longer coming in because they want a car, they only come in when they need one. That change from buying to you want to buying only what you need could last a generation. The last time it happened in America as just before I was born (1940). That lasted a lifetime for those who lived through the Great Depression.
If this is a similar bedrock change to Amercian Consumerism, the bottom of this market in not on anyone's charts and recovery may not be completed in Obama's presidency.
But, such a change may just save the planet from climate collapse.
I am certainly no economist, but looking at the position the economy is currently in I am not certain the people that call themselves economists are actually anything but very short sighted tea leaf readers. I suppose that's why it all seems rather simple to me - there has to be a radical change in the way we spend our money. We clearly rely too much on credit (myself included) for purchases we don't NEED (again, myself included, but I like to think less so now). Of course, the problem lies at the root of the system, a system built on ever increasing consumption of good by an ever increasing population. Throw a little profit incentive into that mix and you get rampant production, superfluous advertising, and a climate that blindly accepts both and we get where we are today. I can't see how that path can be sustained, and I hope that someone with some clout points it out so that we can get to the business of changing habits completely. Companies shouldn't be so much about making ever expanding profits as they should be about making solid products and taking care of their employees. Priorities should go to environmentally sound ideas and what's best for the common good, not what's going to make the most money.
Just don't put me in charge of it, because I have no idea how to make it all work.