In Case you Missed it, the Rules have Changed

I begin at 7:27 AM Pacific Standard Time. The Dow Jones Industrial Average is up nearly 6/10% from yesterday's close. Ye-haw. Can't wait for that quarterly report on my 401K to see how much retirement I don't have anymore. "Comrade" Paulson defended this week's continuous losses, with nearly 1,000 additional points shaved from the Dow's average, arguing that it's, "too early to look for encouraging signs." He might consider having the new temporary head of his bailout, a 35-year old from--you guessed it--Goldman Sachs, to look into getting some of that $85 billion back from AIG. Oh wait, the Fed's lending them another $38 billion.

It's 8:15 PST and the Dow is down over half a percent. . . .

I'm halfway through my lunch and the Dow has slid almost 3% since opening today. The Senate sweetened up the bailout (AKA "rescue") bill with tax cuts to get the House Republicans on board. How do they think we're going to pay for all of this? The "debt clock" near Times Square in New York had the dollar sign removed from it as another digit was added to our National debt--now over $10 trillion. The debt clock was first installed in 1987 when the debt was still just $2.7 trillion and when Reagan was still in office. Ah, the good old days of "don't tax and spend anyway" Republicanism.

In an oft quoted statement by Michael Hudson, Adam Smith said that no government had ever repaid its debts, and the same can be said of the private sector." For many, the free market system is more than just an economic strategy: it is the American ideal. The idea of the public seizing ownership of these banks which managed to fail--in spite of the hallowed doctrine of Milton Friedman, as espoused by Reagan, Bush and Bush--has the free market purists going insane right now. Most of them would like to let the market select which companies survive and which ones die out. The only problem is that, through a protracted war of attrition by the deregulationists, they managed to get what they wanted. And so, anti-trust violations went uninvestigated. Banks grew in size and dwindled in number. Suddenly we were faced with an ultimatum: rescue the banks--the ones that were allegedly too big to fail--or face a catastrophic economic collapse, the likes of which have not been seen for almost 80 years.

My lunchbreak is over. The market has fallen by nearly seven percent since this morning. My folks lived through the Great Depression. From the way the stock market keeps falling, it looks their kids get to live through one, too. I sure am glad we managed to save the banks though. . . .

It's 5:17 PM PST and I just finished working. The market dropped another 678.91 points (7.3%) today, closing at 8,579.19. An economist who was a clerk/pickup driver for the rental car agency told me that the market doesn't fall usually below the peak of the previous boom. I'm not sure, but I think the rules may have changed. The Dow last peaked at 11,723 in January of 2000 just before the Dot-Com bubble burst. Maybe I misunderstood him and he meant that it never dropped below the previous trough; if that's the case, we've still got another 344 points to go.

I'm optimistic. Those 344 points might just last me through lunch tomorrow.