Blowing in the Wind
The Federal Reserve was set up originally as an independent body to so that it would be free of being influenced by the winds of political opinion. Robert Reich made the point recently in his blog that the Federal Reserve has committed 2.5 trillion dollars thus far to rescue our financial system from its credit seize up and from the black hole in the housing market. Most of the Fed's actions are being done behind closed doors. This is all in the name of the "monetary ease" to which Fed Chairman Bernanke referred in a speech on February 18, 2009. I agree with Reich that the bailout process is hardly transparent, as the true eventual cost for which taxpayers may be on the hook is unknown.
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Would You Rather Be a Trader or an Investor?
Many people who place their money in the stock market are really traders rather than investors. In fact, I do not think that there are too many long term investors left after what has happened to the market in since September 2008, when the Dow Jones has fallen 6,000 points to 7,500. Long term investing has been somewhat discredited and both a well known financial commentator and an often interviewed hedge fund manager have declared end of such an investing style. See my article to the contrary: Why Long Term Investing in the Stock Market is not Dead.
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Why the Stock Market May have Collapsed Months before Barack Obama was Elected President
Background: I remember in February 2007, the Shanghai market cracked, and ours followed sharply downward the next day. However, both our markets and the Shanghai Exchange snapped back shortly thereafter as quickly as they had fallen.
This was a wakeup call for me, and the first time that I questioned the American bull market in stocks that began in 2003. I wrote about this in my article, Are Stocks Still Worthwhile Investments? A Reconsideration: The Odds of a Panic, posted in April 2007, where I wrote that there may have been an "unsupported speculative fever" underlying the stock market.
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