So January started lukewarm and ended in the gutter for the traditional read of what January means for the year.
Sounds right to us. Lots of little ups and downs, and whipsaws in tightly bound ranges, with no real increase. We’ll be lucky to see 3 to 5% portfolios, some say, and it is true that much now is “at stake.”
The real problem for most Americans is not the recession. It’s the real and more ominous fact that the average household income hasn’t budged for the past 10 year.
This is true in EVERY income quintile of the population, even the top. And for the bottom 60%, that stagnation has lasted twice as long. Most of the country has just been treading water over a period that spans expansions and recessions, bull and bear market, and Republicans and Democrats both in charge.
Many people appear to blame businesses for “causing” the recent recession, and this is short sighted. There is NO doubt that there were many businesses that were plain stupid, greedy, short sighted and risk takers. However, at this same time we had Democrats and Republicans TOGETHER encouraged and mandated risky lending, and millions of people took on mortgages they could not afford.
It was the betting…the cash derivative betting…..that prompted Bernanke and Geithner last fall to to see that the overall cash derivative bets were greater than all the money in the world. Read that sentence carefully.
We had let the Wall Streets of the world, and we “letting” is the key word, bet against a borrower, while loaning them the money, and AIG led it in the riskiest of the bets.
So…blame business? Sure, but hanging businesses from the rafters won’t do a thing to help.
It is not socialism to create defined laws that protect the American public from those that steal from them.
