Tripped Circuit Breakers and the stock market

Good morning chums. As some of you may have noticed I haven't been around for a few days. To be truthful my political circuit breakers tripped and I did a road trip to restore some sanity to my world. After a few days off meeting some old friends and plying my avocation I am recovering nicely.

And may I say the Sheraton shown is a nice place to reset the breakers.

Now there was H's news conference, a glimpse of which on CNN caused me to slip into H shock, and then there was the dilberts of McCain's campaign staff who sought to get back on the media's A list by criticizing Governor Palin that sent me screaming to the hotel's anger management spa, aka bar, but all in all it has been a pleasant experience.

Of course the market went off about 12%, and when The Man With The Greatest Judgement In The World had the chance to give the market some reassurance he failed, waffling on taxes. Which tells he intends to do what everyone with more sense than a June Bug said he will do, raise income and capital gains taxes.

Why? Because he has some promises to keep to his minions, as well as those who intuitively understood that he was a socialist and would give them other's wealth.

And he didn't bother to deny the rumor that the government is going to take your 401k and put into the Social Security pot, supposedly giving you a gracious 3% return.

So the market is suffering from a bad case of the jitters and is being hit by a double whammy. With hundreds of thousands of people out of work, many of them are
having to take money out of their 401k's. If under 55 they will pay a 10% penalty and then ordinary taxes.

Now the government might wave the 10%. That would reduce the amount needed to be removed from the market and decrease the sell pressure. But they won't.

In addition, when people lose their jobs they are no longer paying into a 401k so stock demand is reduced.

And others, fearing that the government will take their 401k are getting out of the program, again reducing demand.

So it isn't over chums. I may be missing the greatest buying opportunity in 50 years but I have taken my wallet out, put it in my front pocket, backed into a corner and squatted down.

Cheers! Time for my anti-depression meds! Now where did I put that Stohly....