The Insanity of our Stock Market

Welcome to the insanity of the United States stock market.

Yesterday the Dow fell more than 1,000 points on news of the Fed cutting federal funds interest rates a quarter of point along with the promise of making fewer than expected cuts in those interest rates.

And why precisely is this bad news?

Why is showing fiscal responsibility bad news?

There has to be a cost to money.

Quite frankly, interest rates should’ve been jacked up far higher than they were three years ago.

4.25% is nothing.

When I first borrowed money for my house and  office 30 years ago, I paid 10 to 11% interest, and I survived just fine.

The current prime rate, what we borrow at,  is at 7.75%.

So I must laugh at the doom slayers who believe that interest rates are too high .

They are not high at all.

And as I’ve stated there has to be a cost to money. We can’t go back to the days of zero to one percent interest rates.

It allows far too much money to be printed which in turn causes the severe problem with inflation we have all experienced in the past few years.

Two weeks ago, I took my staff out to eat at PF Chang‘s for lunch. There were six of us; the  bill including the tip was $250.  None of us had any drinks which would’ve jacked up the bill even more.

$250 for six people? $40 a head for lunch?

That’s ridiculous.

Where are we going to be in 10 years if Wall Street has its way ?

$100 a head for lunch?

What Wall Street would have us do is engage in another wave of rampant inflation so that they the greedy on Wall Street can make a ton of money on the stock market

No thanks. 

You see, our traders and financial people on Wall Street are junkies. They’re addicted to easy money.

Jerome Powell runs a methadone clinic to get junkies off the high of free money.

He’s having a tough time doing it.

Whenever he even remotely suggests that easy money (heroin) might not be available, the financial people on Wall Street begin to convulse.

Thus the dip in the stock market.

Well, if you are an investor, you should not panic at the latest free fall.  It has to happen.

In time, if Powell and the Fed can stay the course, the junkies will be able to get of their drug and the stock market will return to sanity.

Until then, the ride will be a little bumpy.

Copyright 2024 Archer Crosley. All Rights Reserved