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My market analysis

Posted Tuesday, August 9, 2011, at 9:43 PM

Monday was among the 10 worst days for the Dow Jones Industrials in the wake of Standard and Poor's downgrade of America's credit rating.

Tuesday was one of its 10 best on news that the Fed will leave interest rates low for two more years.

Tuesday's market comeback didn't do much to ease the anxiety Americans are feeling. While the immediate debt crisis is over, our country still has long-term debt problems. The balance just keeps growing on our national credit card.

I remember my dad telling me stories about "Civil Defense Drills" he took part in during elementary school fearful that communist countries could use nuclear weapons against the U.S.

In contrast, today, communist China practically owns us. China owns more U.S. Treasury bonds than anyone else.

We might not practice running into bomb shelters anymore, but fear still grips many--Fear of losing their job, losing their home, not being able to pay their utility bills.

S&P's reduction of the country's credit rating from AAA to AA+, is no doubt a reflection of our dysfunctional politicians, regardless of party affiliation, who seem more concerned with pointing fingers than proposing real solutions.

Tuesday's rebound shows that Wall Street was comforted by what the Federal Reserve Bank had to say. But I'm not sure the American people are.

By promising to keep interest rates near zero, the Fed must be banking on already slow economic growth slowing even further.

Our chief copy editor Spencer Cramer pointed out to me a few weeks ago, when I referred to "the recent recession" in a sentence, that our last recession in 2008 technically ended in 2009.

For many, it sure doesn't feel like it, especially the 9.1 percent of Americans who were unemployed last month.

But it's not all bad news.

If you have money to invest, consider the entire stock market as currently having a bargain basement sale. It's like after-Christmas clearance!

Another bright spot, oil prices are still well below the $100 a barrel they were fetching earlier this year. Oil's dropped 14 percent in the past month, at about $80 a barrel today. Enjoy the savings at the pump while you can!


Comments
Showing comments in chronological order
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Good article Melissa, very time appropriate. Many of us feel the recession did not in fact end in 2009. Like you mentioned, with at least 9 plus percent still unemployed, the 'real' end will not be in the foreseeable future.

-- Posted by electron312 on Tue, Aug 9, 2011, at 10:08 PM

Our democratic republic elects legislators to represent us. While they may have some leanings one way or the other on one issue or another, on average, they reflect their constituencies.

Like the floor in a teenager's room, what you see there is reflecting what's going on in their mind. What you see going down in Congress is a direct reflection of the voters' demands.

Don't throw the individual politician under the bus; it's us. We're demanding paradoxical solutions. We want everything from the government and we want low taxes. We want freedoms, and no responsibilities. Duh.

Our media have an opportunity to make sense of our hypocracies, oxymoronstrocities, and inconsistencies. Our politicians, who are doing their best with a bad hand from the voters, could use some help. SIGNED: T. ROBIN COLE, III

-- Posted by trcole3 on Tue, Aug 9, 2011, at 11:58 PM

"In contrast, today, communist China practically owns us. China owns more U.S. Treasury bonds than anyone else. "

The US Government owns more US Treasury bonds that anyone else. Social Security, Medicare & Military & Federal Employee pensions hold over half of our bonds. US corporations & individuals also own more US Treasury Bonds than China. For the specific category of US Debt owned by foreign central banks then China is indeed #1. However they own less than 8% of our total debt (Japan is #2 with 7%).

Of course "China practically owns us" drums up a lot more irrational fear than the reality of "China owns about 8% of our national debt".

-- Posted by Nil on Thu, Aug 11, 2011, at 4:00 PM


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Melissa Miller is business editor at The Southeast Missourian. A graduate of the University of Missouri Journalism School, she's worked as a reporter, photographer, editor and as the executive director of two not-for-profit organizations. After living in Michigan and then Indiana, she moved back to her hometown of Jackson, Mo. In addition to writing daily stories for The Southeast Missourian, Melissa coordinates editorial content each month for Business Today. Business Today is a monthly publication for southeast Missouri's business community. Monthly themes include health care, agriculture, women in business, technology and more. Business Today is direct mailed to business owner and managers throughout southeast Missouri and southern Illinois. Follow her updates on local business developments at www.twitter.com/semissourianbiz or on Facebook at www.facebook.com/MelissaMillerSoutheastMissourian

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