Seismic Economics

After an amazing five-year run when the world saw the Dow Jones Industrial Average (DJIA) increase in value fivefold, prices peaked at 381.17 on September 3, 1929. The market then fell sharply for a month, losing 17% of its value on the initial leg down. Prices then recovered more than half of the losses over the next week, only to turn back down immediately afterwards. The decline then accelerated into the so-called "Black Thursday", October 24, 1929 (From WikiPedia)

The Election of 1928 was a landslide victory for the Republicans, since they were associated with the tremendous prosperity of the 1920's; the current president (Coolidge) had decided NOT to run. Herbert Hoover, as President,

was a proponent of the concept that public-private cooperation was the way to achieve high long-term growth. Hoover feared that too much intervention or coercion by the government would destroy individuality and self-reliance, which he considered to be important American values.

Of course, those HAVE been traditionally "Republican" values. But in a last-ditch effort to preserve James Buchannan's spot as "worst American President" (lest #43 take over that title), George W. "CYA" Bush attemped to get conservative House members from small towns who were up for re-election in about a month to shore up Wall Street and the credit markets.

And in one of the most bi-partisan acts of her tenure, Speaker Nancy Pelosi gave House Republicans "cover" to bail on the bailout, by doing just what moms have been doing since the end of time--fussingly telling the truth!!! So the Republicans did bail--while, of course, blaming "mom" for making them mad!!

So now what? As expected, the stock market took an upswing as bargain hunters swooped in; how sustainable that will be is still anyone's guess. No one wants to do much this close to an election, for fear of being blamed; once the election is decided, it will be so much easier to simply unload the problem onto the winners.