Imagine, if you will, a child. This child, for a myriad of reasons, has stayed up way past her bedtime several nights in a row. So, naturally, she’s a bit cranky and lethargic, and she’s been performing poorly in school.
She might not want to go to bed early tonight (Hannah Montana herself, Miley Cyrus, is going to be on TV tonight to, once again, explain she is not a prostitute despite the fact she is wearing only high heels and a scarf), but turning off the television and going to bed early is clearly the best thing for her.
“Not so fast,” shouts resident patriarch, Kevin O’Bama.
(Yes, it’s an Irish name. Why do you ask?)
You see, O’Bama has a better idea. Rather than make the young child, against her will, go to bed early, O’Bama chooses to give the child 787 billion bags of candy.
“I call it a candy stimulus package,” boasts the proud imbecile.
“By feeding the girl sugar, her energy level will skyrocket. Then she can stay up and watch that wholesome Miley Cyrus. Later, after her parents are asleep, she can watch Cinemax if she wants. And this momentum will surely carry over to her schoolwork tomorrow.
“I see no downside to this plan.”
The downside, of course, is eventually you are going to run out of candy. And then, inevitably, the sugar crash will happen.
Hi, I’m Kevin. Founder of this here blog and an all-around swell guy.
When the stock market was crashing in late 2007, all of 2008 and early 2009, I decided to be greedy. As Warren Buffet advises, “Be fearful when others are greedy…be greedy only when others are fearful.”
And that’s what I did. I saw the declining stock prices as giant, neon “For Sale” signs. As others were selling, selling, selling; I was buying, buying, buying.
And then Barack Hussein Obama stepped into the White House.
I knew, based on his teleprompter-aided campaign speeches, the man had plans that would be horribly, horribly, horribly bad for the stock market (and the economy as a whole). Still, while stock prices continued to slide, I continued to buy. All the way up to March of 2009.
That is when the market began to turn around. Heck, it didn’t just turnaround. It skyrocketed upward.
In short, others were becoming greedy. And that was my cue to become fearful.
I knew, as many others knew, the turnaround wasn’t natural. The economy hadn’t recovered! No, it’d simply had billions and billions of government (i.e. taxpayer-funded) dollars pumped into it.
Had unemployment improved? No, it had not. Had consumer confidence improved? Nope. Had consumer spending gone up? Not so much. So why did the Down Jones go up almost 5,000 points from March 2009 to April 2010?
Because it had been fed giant bags of candy.
People began buying houses again because an $8k-tax-credit carrot was dangled in front of them. Other stimulus programs pumped government money into the economy. The result? Things, on the surface, seemed to be getting better. And, since the stocket market is packed with Chicken Littles, the market leapt upward.
Alas, the giant bags of candy are running out.
The $8k incentive for home buyers ended on April 30. What happened in May? Well, naturally, the sales of new homes fell to an all-time low. Anyone who believes this is an aberration is coo-coo for cocoa puffs.
Slowly but surely, other stimulus programs are ending. Others had already ended and their effects are just now beginning to wear off. The economy is running out of giant bags of government candy and the stock market has recently begun reflecting this reality. The sugar rush is over. It’s time for the crash.
I foresee this going one of two ways:
The stock market will go down again. Possibly way down. Experts would call this a “double-dip recession.” It will be hard for everyone, but eventually we’ll get through it. And as a result people will learn the hard life lessons they need to learn. They’ll become more fiscally responsible. They’ll begin to curb their spending. They’ll start emergency funds. They’ll stop relying so much on credit. They’ll stop buying houses too big for their needs and too expensive for their budgets. They’ll stop expecting the government to save them when they make stupid, idiotic, inexplicable decisions.
Or, the government will give us more giant bags of candy.
I’m predicting the latter.
I'm a cypher, wrapped in an enigma, smothered in secret sauce. Also, my name is Kev and I own this here website.
















;-) 7.6.10 at 11:11 am:
Bravo. Sad, but true. Someone said to me the other day it seems the economy is doing really well and it seems to be turning around. My response? “That’s what they WANT you to think…”
;-) 7.6.10 at 2:37 pm:
Seriously, I love how you made this process so understandable. I wish everyone would read this because maybe then they’d realize what’s really going on. For someone (like me) who has been trying to sell a house for a solid year, these developments have been not only financially devastating, but emotionally destructive as well. There is no telling what the long-term outcome and outlook will be for families as a result of the irresponsible actions of our government. I know they will answer to God for what they’ve done, but in the meantime ordinary Americans (like, those who will never be even one-fiftieth as rich as Barack Obama) who actually LOVE America, must suffer the fallout.