BernieHund: The Political Watchdog

Monday morning Wall Street showed little promise that the Bernanke strategy had an immediate effect on the market.  In fact, not only did Humpty Dumpty fall off the Wall over the weekend, it seems that the Wall is suffering a few cracks of its own.

When the opening bell rang on Wall Street this morning, the Dow plunged almost 178 points.  But, as usual, after the dip, stock prices leveled off, leaving the market only 66 points down.

I have always been told that the real indicator of the stock market is the price of gold.  When stocks soar the price of gold goes down.  When stocks tank the price of gold soars.  Today gold hit a new high.

The events over the weekend, the Fed stepping in to salvage what is left of Bear Stearns, led other world markets to shake in fear.  Markets around the world took a dip as they opened.  But, as anyone who follows the stock market knows, Wall Street is about as fickle as a high school girl.  It’s too early to tell if the JP Morgan purchase of the big Bear will save the day or the week, but it’s not looking good.

Other big banks are going to be showing their hands this week and it could be the knock out blow for investors unless the results are better than expected.  But, that’s Wall Street.

The question is how will that affect Main Street? 

“The problem is bigger than the Fed,” said Meredith A. Whitney, an Oppenheimer financial services analyst. “Trillions of dollars of securities were underwritten on the false assumption house prices could never go down on a national basis. That falsehood has put the entire financial system in a tailspin.”