A little more financial talk

Up on Montrose, a huge pipe burst causing a sink hole. If no one else is interested, I know Alexis will be as I believe she lived right around there some time ago. Quite the scene.

It was another crazy day in the markets today with the Dow starting down almost 200 and then ended being up 300. THAT's some volatility! While taking a look at various financial sources during these turbulent times, I came across the following info from the very respectable Lou Dobbs. The discussion is regarding the huge tax refund package in the process of being approved.

Courtesy of Lou Dobbs:

Bernanke endorsed the concept of a short-term economic stimulus package, but he cautioned that the money must be spent correctly: "You'd hope that [consumers] would spend it on things that are domestically produced so that the spending power doesn't go elsewhere."

Just what would you have us spend it on? The truth is that consumers spend most of their money on foreign imports, and any stimulus package probably would be stimulating foreign economies rather than our own. Imports, for example, account for 92 percent of our non-athletic footwear, 92 percent of audio video equipment, 89 percent of our luggage and 73 percent of power tools. In fact, between 1997 and 2006, only five of the 114 industries examined in a U.S. Business and Industry Council report gained market share against import competition.

Can you believe those numbers?? Good Lord, no wonder we're in such trouble economically.

Last year, my buddy SpringfieldSam contacted me after a rather precipitous drop in the Dow from around 13,500 to about 12, 700 or so over the course of a week. He was concerned about whether the market was in a free fall or if it was a buying opportunity. I told him, I don't know if it's either (if anyone says they DO know, they're a liar), but at the beginning of 2007 the market was roughly about 12,500. If it fell below 12,000, then I'd be a bit concerned. The market rebounded to above 13,000 again. Well, it went under 12,000 yesterday and then jumped to almost 12,300. Without any technical analysis at all, this feels like a good floor....at least given a certain set of economic data which seems to be changing. If we go into a recession, the floor could be something closer to 10,700 which is about 13% below the current level. If you're in the market, you have to be able to accept corrections in the 10-15% range periodically. Just don't sell!!