Reply #53: Freedom and the Forty Clueless Dingbats

[54anickel]

http://www.gold-eagle.com/editorials_05/rostenko012405.html

The stock market seems not nearly so ebullient as it appeared after the election. Perhaps it's growing a tad concerned with the potential expense of George W's plans to bring "freedom" to every nook and cranny of the globe, whether or not every said nook and cranny is interested. Imposing one nation's will on an entire planet is generally an expensive task as the Roman and British (among others) empires eventually learned. It's especially expensive to ram freedom down everybody's throat with a record budget deficit, but the inaugural address failed to mention that minor factoid.

For whatever reason, the stock market is beginning to waver. The November surge to new multi-year highs in the major indices pushed the S&P 500 to retrace more than half of its bear market decline, thereby churning the bowels of more than one nervous bear. But today the picture looks considerably less promising for the bulls.

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When new major highs fail to draw in buyers, the rally becomes suspect. And sellers grow bolder as last week's high volume decline makes clear. In fact, the four highest volume days of 2005 have all been declines. Nine days down, five days up, nearly 2:1 in favor of the bears. And the market finished at its lowest point for the year last Friday. Not a great start, to be sure.

Is reality finally catching up to the market? Let's get real here, folks. In the midst of the biggest budget deficit in all of U.S. history, George W's inaugural address lays down the mandate for some mighty expensive propositions. Freedom ain't cheap, particularly when it's delivered in the form of high-tech weaponry and U.S. soldiers.

Where's that money going to come from? The printing presses? In that case, say goodbye to the dollar even faster than you had planned. Taxes? That'll work. With Americans saving 0.2% of their income, where will increased tax payments come from? Consumer expenditures, that's where. Say goodbye to corporate profits.

How about from a "coalition of the willing?" Yeah, that'll happen. Even the UK's Tony "someone crept into my sleeping chambers and replaced my spine with a big gooey jellyfish" Blair isn't playing ball on the "let's stop Iranian nukes and if that doesn't sell we'll rehash it as the 'let's bring freedom to Iran'" idea. (It's expected that Blair will support Jack Straw's assessment that military intervention in Iran isn't a good idea.)

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