It’s good to keep right away from financial markets when on holidays – but sometimes it can be impossible.
Last week it was absolutely impossible – the Dow Jones fell 500 points on Monday, rose 140 on Tuesday, fell another 449 on Wednesday, then up 380 on Thursday before lifting another 500 on Friday.
I’m okay, I think, with many years before retirement, but those already in the draw-down stage have the right to feel nervous.
However, in the US, it’s again an interesting situation. There are two very ambitious men who have the White House in their sights.
They are being tested at the moment with their economic policies.
They each started by being vague, then both said they do not believe the Fed should intervene to save companies and stave off disaster in the economy.
Democratic candidate Barack Obama says these companies enjoyed upsides, why should they now need to ask for help.
He has gone further, saying the economy will profit more from a middle class enjoying tax cuts as it doesn’t make sense to expect high earners’ tax breaks will trickle down the line.
Republican John McCain is having to offer more than a female running mate and is attempting to distance himself from current policies, saying he would fire the head of the Securities and Exchange Commission (SEC). Obama says why stop there.
The new rules invoked by the SEC on short-selling are a boon to ordinary investors and the market responded as such.
Similar rules in Australia should be received in much the same way.
However, the rules will need to be clarified and confirmed within the next month as they are temporary measures here at the moment.
Skyrocketing oil prices are the next addition into the volatility mix. Share prices have responded negatively to the news. In the next week we will see how much.
