The 7,000 Club

We have rallied the markets for a full week, and all of a sudden people want to believe that the worst is over. Well, it isn't, and here's why...

Nothing seems to have truly changed anything:

1. AIG announced over the weekend a plan to pay over $160 million in bonuses to management. Nice work, guys! Thanks for the top notch performance!
2. CitiGroup stock closed Friday afternoon under $2 per share, meaning that it is cheaper to buy their stock than it is to use one of their ATMs.
3. Tax reports just now being submitted (the corporate filing deadline was March 15th) will give everyone final confirmation of the 2008 train wreck. Expect government agencies to hit full panic in the next few months as tax revenues drop further than expected.

We can't tax our way out of this mess. We need to cut government spending or the deficit will explode, and China (who buys most of the U.S. debt) has already started signaling their lack of excitement about another trillion dollars of new loans. Where will we cut expenses? I have no idea, and the proposed $4 trillion budget doesn't hint at less, instead it screams MORE!!


Dangerous Rumor:
Obama's health care plan is rumored to include a new tax for those of us with health insurance. The idea being that those with insurance should pay even more to help those without. If true, I fail to see how that helps small businesses and individuals struggling to maintain coverage. The idea of taxing our way to safety stresses me out, I just hope I don't get sick from it!