Thanks America

Well, there goes the old portfolio, at least for today... Market's only down 265 points and an hour left to go in trading. Don't hold out much hope for tomorrow either, but do hope there's not a bear run. Here's an interesting blog piece in today's Globe and Mail (Toronto):

Stocks breach technical level

DAVID BERMAN
Globe and Mail Update
Posted on Tuesday, August 2, 2011 11:39AM EDT

Well, so long 200-day moving average. With the S&P 500 down sharply in late morning trading on Tuesday and on track to post its seventh consecutive decline, stocks have crashed through a relatively important and straightforward technical indicator – suggesting to some technical analysts that equities could be in trouble.

Of course, some would scoff at such an observation, seeing technical indicators as nonsense. Still, the S&P 500 kissed the 200-day moving average in mid-June, only to bounce higher. It did the same on June 24, then gained 6.7 per cent in a strong rebound – making the moving average look like a line in the sand that investors weren’t willing to cross.

Now, though, the S&P 500 has fallen to 1,272, which is about 13 points below the moving average. Should the index end there, it will mark the first breach in a year. Recall that last August, stock markets were in a tizzy over the European debt crisis and a soft patch in U.S. economic data, before the Federal Reserve stepped in with another round of stimulus in the form of quantitative easing.

A year later, things look much the same, except that the U.S. government has taken big steps toward cutting back on spending. Paul Krugman, who is a big believer in the benefits of government spending at a time of economic weakness, has some very clear and interesting things to say about Washington’s debt deal on his blog in the New York Times.

His latest: “What we’ve witnessed pretty much throughout the western world is a kind of inverse miracle of intellectual failure. Given a crisis that should have been relatively easy to solve – and, more than that, a crisis that anyone who knew macroeconomics 101 should have been well-prepared to deal with – what we actually got was an obsession with problems we didn’t have.”

Meanwhile, Barry Ritholtz at The Big Picture is growing concerned by the stock market’s grinding and sees no solution to the economic sluggishness from policy makers in Washington: “I keep saying I am not a Democrat because I have no idea what their economic policy is, and I am not a Republican because I know EXACTLY what their economic policy is. That is our policy choices: Inept cluelessness on one side, and hapless fantasy-based lunacy on the other.”