Dec 20, 2010
For what may be the best look at the future of the world’s most recent Banana republic entrant (the U.S.S. of A. for the confused) has to look forward to, we need to merely shift our attention at another one, which has had the privilege of experimenting with its Banana status for far longer: Bangladesh. After the stock market plunged on Sunday by 552 points or 6.72%, hundreds of angry investors took to the streets, “threw bricks at police, marched in the streets shouting slogans, and staged a sit-down protest.” These very same “investors” which have and always will be better known as momo investors, which chase returns only to end up with the live grenades, “chanted slogans against the government and the regulators, and marched through the busy roads in the Motijheel Commercial area, halting traffic. They also staged a sit-in at the SEC building.” The reason for the recent mass hysteria in chasing stocks: pretty much the same as what the Fed is trying to do right here in the US: “The rising value of the stocks in recent years has attracted hundreds of thousands of small-scale or retail investors in Bangladesh, says the BBC’s Anbarasan Ethirajan in Dhaka. It became a popular investment for ordinary people, often providing higher returns than bank deposits and savings.” Well, with the USA today posting an article with the following title on its cover page: “Experts agree: Get over your fear and get back into stocks “, and more incredulously, when one of these so-called experts is none other than David Bianco, the same utterly irresponsible creature who in October 2008 cut his 12 month S&P forecast from 1650 to 1500, well there is nothing much left to say: Bernanke has succeeded in converting America into a third-world subcontinent country.
The index ended the day down by 552 points or 6.72%. It has been on a rollercoaster ride in recent weeks, hitting a record high on 5 December, having climbed 80% since the start of the year.
But on 8 December it nosedived, prompting protests in Dhaka and towns elsewhere.
On Sunday, at least 500 investors hurled bricks at law enforcement officers near the Dhaka Stock Exchange and the Securities and Exchange Commission (SEC) offices, said local police chief Tofazzal Hossain according to AFP news agency.
Analysts say Sunday’s index fall was triggered by a central bank interest-rate hike.
And yes, ladies and gents, all this is coming to a very cornered Chairmen close to you, who now faces the biggest dilemma of his pathetic career: let monetary policy be loose in perpetuity, bringing the price of oil to triple then quadruple digits (and so on) shortly thereafter, or tighten, watch the stock market plummet, and destroy his much desired, and even more imaginary, wealth effect.
This article was posted: Monday, December 20, 2010 at 5:36 am