For months now, we’ve watched the Dow plummet. As I mentioned, last week I met with my financial adviser and predictably, the news was bad: essentially a 50% loss across the board. The Dow was flirting with the low 8000s and I asked, “What do you think–is it going to go under 7,000?” “I hope not,” he replied. “I’d hate to see it go there–the emotional reaction would be tough.”
Today, it happened. For the first time since 1997, the Dow closed under 7,000.
“The first trading day of the month was a rout, dragging the Dow down to another misery milestone: It has lost more than half its value since it hit a record high above 14,000 in October 2007. On Friday, stocks ended February with six straight months of losses.The Dow closed down about 300 points at 6762.98 Monday, on a preliminary basis, its lowest finish since April 25, 1997.”
The absence of positive financial reports is particularly problematic as consumer confidence continues to sag.
What does it mean? I think tea leaves would be as useful as expert analysis at this point. We’re in uncharted waters. It’s a global economy now and we’re not alone. We sold our poisonous notes to banks across the planet. It’s tough all over. Look at Norway, Japan and even China.
For detail, CNBC’s “House of Cards” is worth a look. I watched it again last night and it’s far from reassuring but does get behind the jargon and mumbo jumbo. Our financial institutions, blinded by greed and lacking any government intervention whatsoever have led us to the darkest of places.
If you have money, it would sure help if you’d let go of some of it to take advantage of this to buy up some real bargains. But for the rest of us, time to circle the wagons.