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Wednesday, April 7, 2010 as of 11:14 AM ET

The Casone Exchange
  • August 18, 2011 01:52 PM UTC by Cheryl Casone

    Here We Go Again

    The markets are once again selling off on concerns about government debt and the effect on the economies of both Europe and the United States.  It’s been another roller coaster, but it’s one we have ridden before and will ride again.  The problems on both sides of the pond are different than what we faced in 2008.  Three years ago the consumer was stretched too thin and unable to pay the bills.  In 2011 it is governments around the world who are stretched too thin and can’t pay their bills!  What has many analysts I speak with concerned about today’s selloff is that it signals to them we may be entering a bear market.  I think this could be a correction, and the market today is simply retesting the lows it was searching for last week.  So if we head back to 10K territory, it’s a short term bear market, but I saw this last summer when QE1 was ending, and the S and P was down 16%.  Now the S and P is down 18%.  Yet, in the Fall of 2010 we were back and  kicking!   The other factor is the Federal Reserve.  I believe “Helicopter Ben” is thinking about taking action, and when President Obama returns from vacation, he will convince Ben it’s time to make a move.  Initial jobless claims were rough today, and the Philly Fed Index was -30.  Negative 30! I almost fell off my chair.  That means in that area of the country they are not making much, not hiring much, and it’s a report the markets watch as a clue to the overall economy.  Last thing that hurt the markets today was July Existing Home Sales.  Down again, and prices fell. 

    We just can’t catch a break!



Government is sized right now for a GDP of 4. However the GDP is steady at "the new normal" of 2. You have to walk before you can run. The first step for getting a steady upward slant on the Recovery is to cut the size of Government in half. Housing starts aren't going to budge soon. Wage size is set right now at a level that requires a new home to be sold at 40% above the price of a comparable already in inventory.

August 21, 2011 at 2:28 pm

dana swan

From world War 2 to 1978 working wages in the USA grew faster that the cost of living. From 1978 to 2008 the CPI grew 3 times faster than wage growth. The offset was that personal debt grew 5.5% per year and public debt 7.8%. The debt is now unsustainable and working wages are falling. We need some extreme leadership to create the environment for new innovation to create good paying jobs and the confidence to believe that we as a nation can fix this mess.

August 21, 2011 at 8:30 am

dana swan

The velocity of the money in the economy that creates jobs, wages and taxes is slowing because money is pooling in Banks, corporations and the super rich. The risk trade is off and carry trade is on. Debt is pooling with individuals and government. The only way out is for the leadership to instill the perception that they can handle the economic problems and restore confidence. Only then will the economic engine start again...where is the leadership and the confidence?

August 21, 2011 at 8:20 am


So, I wonder when someone will say "you Know America, we've made some mistakes here in Washington since our huge stimulus plan and promises made.... We are sorry and we are going to start listening to some of the republican ideas, dump this fantasy healthcare for the world idea and get off the backs of small, medium and large businesses and stop "coddling the unions (yes Mr buffet, the unions and not the rich). Folks, I am not the smartest out there but until this happens, it'll be ugly.

August 20, 2011 at 8:08 pm

dana swan

After World War 2 the USA was the only industrialized nation not destroyed in the war. Since then, The USA has been using about 25% of the worlds commodities with only 5% of the world's population and using the strength of the world's reserve currency dollar to keep prices low. Today the rest of the world is industrializing rapidly and we will have to share the shrinking supply of commodities. The increased costs will mean less of everything, energy, products & jobs.

August 19, 2011 at 10:33 am

dana swan

The United States whent through it's debt crash in 2008 and 2009. Europe is going through theirs now. the perspective is that in the last century, the USA won many wars and then gave those countries our financial system. This system allowed the use of money from the future to be used to grow the economies faster that sustainable organic growth could allow. They borrowed money from the future and we are now in the future.....follow the logical outcome...

August 19, 2011 at 9:46 am

dana swan

the Federal Reserve is the largest holder of treasury Debt. Does the Treasury pay full interest on that debt to the Fed? The Fed created the money from thin air to buy it. If the interest is being paid, the owners of this private corporation are literally getting money for nothing.

August 19, 2011 at 8:50 am

Sherri B.

I just don't know what to think anymore..I don't have much hair left to pull out..The only way I can explain how I keep feeling is, when you know you are coming down with a nasty cold and it is kind of dragging it's feet, you know it's going to slam you so you just want to take the medicine, do the bed time with the kleenex and chicken soup and then bounce back and tackle the world again...PLEASE! Thank you for all you do to keep us informed!

August 18, 2011 at 8:25 pm


Cahone - I hope the U.S. does not throw bailout money at Italy. I want our President to ever so sparingly spend the new cap money he got on August 2nd. To me that means pay existing bills, military pay, Social Security, Medicare, and Medicaid. That's it. Let the country take care of it's economy on its own. Keep the government out of it. Whenever possible reduce the size of government. Most of government is unnecessary overhead. Let the ups and downs of the market fall where they may.

August 18, 2011 at 5:46 pm

about this blog

  • Cheryl Casone joined FOX Business Network (FBN) in September 2007 as an anchor. Prior to FBN, Casone served as a correspondent for FOX News Channel’s (FNC) business unit and was a regular guest on FNC’s Your World with Neil Cavuto. Casone brings years of experience covering finance, business, and consumer news to FBN.

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