Mama said there would be days like this…

 
The predicted demise of the American Economy again has proven the soothsayers wrong.  Fannie and Freddie were handed “get out of jail free” cards by the Fed on Sunday, with extended credit lines they can access anytime they want.  (I can’t even get my bank to reinstate my $25,000 home equity line of credit) The SEC put a choke hold on “short selling” of Fannie and Freddie stocks.  Short Selling is when a trader does not own the stocks.  The trader bets that the value of the stock will decrease.  So they sell the stock at today’s price and then buy it back when it decreases in value. And they never really owned the stock. When the rumors start flying the stock hags start selling short
 Citibank and J. P. Morgan Chase both reported billion plus dollar losses but they were not near what analysts had predicted and Wells Fargo reported better than expected second quarter results. The stock market loved the news and recovered some of its losses over the past two days.  The news was not interest rate friendly, though. The Fed wants us to feel their pain with the decisions that will be forthcoming: leave the Fed rate alone to sustain economic growth or raise the Fed rate to ward off inflation and breathe some life in our dollar. Now back to my credit line….
 
FYI:  The American Economy is the strongest Economy in the world.  Over the past 50 years it has sustained catastrophes that individually could have undermined our greatness.   In the 1960’s we withstood the assassination of our President, John F. Kennedy, his brother and Attorney General, Bobby Kennedy, our civil rights leader, Martin Luther King, rioting in the streets, the Viet Nam War.  Each decade since has been full of intrigue, wars, scandals, greed, presidential impeachment (“I am not a crook”) and near impeachment ( “I did not have…. “well, you know what I mean), gut wrenching high interest rates (18%, anyone?), Black Monday (in 1987, when the stock market fell 22.6% in one day), terrorist attacks beyond any Stephen King horror story, Savings and Loan’s debacle, oil busts, tech busts the list goes on.  We are strong and evolving.  This too, shall pass.