Today, international markets voted on Bush and Bernanke's stimulus package. Apparently, they don't like it. Markets from Taiwan to Frankfurt dropped by 5% to nearly 8% - in a single day. This represents trillions of dollars in wealth that disappeared into the same place as yesterday's temperatures. This is sad news for investors who've already lost about 10% of their portfolios in just the first few weeks of this year - a reversal of all of last year's gain.
Why would investors across the globe be so unimpressed by the plan? Well, to put his stimulus plan in perspective, Bush is spending $100 billion a year in Iraq - a country whose economy is about $90 billion. He wants to pump about $150 billion into the US, where annual GDP is about $13 trillion. His annual "stimulus" in Iraq is more than 100%. To avert a recession, he wants a stimulus of about 1% for the US. If this sounds inadequate to you, don't feel alone. It failed to impress thousands of investors.
2 comments:
The only folks in this household who have a portfolio are my kids and they took a big hit yesterday. Just a week ago I was asking My Better Half if we should sell off their stock and put the money under a mattress. He laughed at me. Hindsight is 20/20 but with Bush at the helm its easy to feel clairvoyant. His stupidity is crystal clear.
cce,
Actually, at your age, it's best to look at this as a huge discount. Seriously. In 20 to 30 years, this will look like great discounts on already low prices.
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