Rull Bulls, Run! (A Short Chorus By Corey Thompson and The Elephant & Donkey Choir)
By Corey Thompson, filed in Corey Thompson, General on Mar.12, 2009
“Run Bulls, Run!”
By: Corey Thompson, “The Thirsty Quill”
As I sit here staring at a blank Microsoft Word document, not knowing what I intend to write for today’s ‘Quill,’ I can’t help but reflect on the positive news coming from Wall Street the past couple of days. Whether you are Republican or Democrat, Liberal or Conservative, you really have to give pause for a moment, take a deep breath, and let out a collective “whew.” It’s good to see the color GREEN replace the blood RED we’ve become used to over the past several months.
I know, I know, it’s only been a couple of days in positive territory. I get that.
Yet, I think psychologically, something has started to shift here in the past 72 hours. Now I’m no financial expert, and I’m not saying that we’ve reached “the bottom.” I certainly hope that we have, and that we’re now on our way back to the surface…so we can all start to breathe a little easier again.
So, all-together now, Elephants, Donkeys, and Independents alike…
“RUN BULLS, RUN!”
March 12th, 2009 on 1:20 pm
I for one believe this market has been been oversold for some time now. We are at levels on the S&P 500, that basically represent a time period of economic history that didn’t have the power of the internet as we know it today. (I for one don’t believe our economy is worse of now than in 1996.)
One thing that still looms out there is the enormous amount of debt in our system. Back in 1996 the Debt in the system was 260% of GDP, which was the peak level that debt/GDP reached during the Great Depression. In 2007 the amount of debt in the system was above 350% of GDP. (For those of you wondering what the average level of Debt is…it’s around 150-200%, on the high side) All of this debt was accompanied by a negative savings rate (2007).
If you have been paying attention to the savings rate now, it has skyrocketed to ~5% in January. (A higher savings rate is good for the economy, however it will not stimulate a quick recovery.)
I for one do hope that the Obama bank will help out the economy— after all they are borrowing money at extremely low interest rates 1-2%…putting that same money into banks which are paying 8-10% on that money…and hopefully stimulating the economy with the rest.