Hopefully tonight I can spend a few hours keeping up with the blog, for now a small update.
California is "out of money" and will now pay bills with IOUs. The Federal government steps in to pay unemployment benefits. Before panic sets in, this has happened to many states before, just not recently. As I previously blogged many states will face financial shortfall that will "stop" the states in their tracks. As the state of CA is out of cash, some CA towns are bailing out Auto-dealerships? Insanity. What I find odd about this situation now is, the Federal Government is dumping hordes of cash to the private sector. There just won't be enough money for basic government services eventually, whether it be states of federal in the years to come.
Government services will be cut back. There is no choice. The only other choice is to raise taxes. In this environment, raising taxes will get a more severe reaction by the media and public than debt spending TRILLIONS of dollars by the federal government.
Funny how the government is mirroring people. No one "freaks out" for over spending on credit cards, buying houses over-valued. But everyone gets upset when the bills pile up and the creditors demand payments. In this aspect, the government truely represents the people.
And to show how dis-jointed the US society is, and how the US still needs a stark reality check, Wallstreet is unhappy with their bonuses! I am sure, that there are legitimate people on wallstreet that deserved every dime they get, and more. But as an aggregate industry, in a year like 2008, one of the worst EVER, take your bonuses and be quiet already! The US and the world is on the brink of FINANCIAL failure.
The point of this blog entry is to illustrate the USA cannot be near a bottom. A bottom in the markets will be marked by everyone giving up hope and having realistic expectations (or even overly pessimistic ones). States expecting to not cut back or raise taxes is not realistic. Wall street expecting huge bonuses in one of the worst years on record is not in line with reality.
For now, still looking to buy GDX as it weakens, getting tempted at 33-34, trying to hold out for 31-30. USO watching not buying, seeing where it goes. Wondering if the market can truely rally with the onslaught of news. From the articles above, seems like we are still in denial, so anything is possible.
UPDATE 1/29/09: Wallstreet bonuses SIXTH largest bonuses given EVER! Come on! Should be like 8th largest, maybe 10th....ok, how about 100th to match the performance?