Well, it finally happened. The DOW has essentially lost half of it's wealth in the past year. Who'd a ever thunk it would fall below 7000? Isn't it amazing? This brings to light what I believe is a fundamental flaw in how our system works. We have an economy built on pure speculation.
What really caused the fall below 7000? Was it some unexpected news that scrambled the market once again? Who threw the traders into the pits and ordered sell, sell, sell? Then again, who actually bought anything? Think back to last summer when oil was at $150 per barrel. What changed then? Nothing. It was pure, unadulterated speculation. It drove the cost of oil and gas to record levels without so much as a hiccup in supply or processing.
Did some magical report of unemployment provide news they didn't see coming? I have listened and watched over the years as businesses made fundamentally poor decision after poor decision. Too often the health of a business has been sacrificed for the health of a stock price. It's all about what the investor craves; return on his investment. Cut back on this, make this cheaper, do with less staff because it is better on the bottom line. However, you must provide a better product and better customer service. I am all for cost control but at some point you start down a slippery slope from whence there is no return.
Why do you think there is no customer loyalty to virtually any business? It is more than just a matter of too many choices in the marketplace. I understand why customers surf the ads and ride from one business to the next. And, that lack of loyalty is just as evident in the big city as in the small towns of the heartland when a mega-giant shows up. Sure Walt, I'll be back, but ah, let me see what the mega-store has down the street. What does the investor have left when the business has failed do to decisions based solely on speculation, not good, solid business decisions?
This economy would be a sight better off if 'the experts' stopped making decisions for the rest of us with their wallet and started using their brains. Sure looks like retirement got a few years further down the pike.