Monday, November 26, 2007

Stock Market Breaks 13,000 -- In the Wrong Direction

It doesn't seem that long ago when we celebrated the Stock Market breaking 13,000. We are doing it again, but it doesn't seem the word "celebrate" is appropriate. The market appears to be heading in the wrong direction.

We have been constantly told that the economy is in decline. Now we have the price of oil pushing $100 a barrel and mortgages in a crises mode for many. True reasons to be concerned. Now the Conference Board is likely to project a decline in consumer confidence -- an indicator of demand which largely drives the economy (or, at least, the Stock Market's view of the economy).

I believe the market may be due a time of adjustment, sub-prime loan corrections and the tightening of credit were necessary and bound to have an impact on the economy. It is time to think in terms of real stimuli to keep the economy growing. With the extremely low interest rates and a dollar that is considered "weak" internationally, cutting interest rates may not be a viable option. Instead, we should seriously look at making the tax cuts, which played a major role in our economy's growth, permanent. Most people don't seem to realize that, since permanence wasn't passed, we are operating with tax increases pending, and that will have a negative affect on the economy. With the current dominance of Democrats in Congress, such a reform will not likely happen without effort. The one driving that effort should be the President and he should take that message to the American people.
Kevin Price Hosts the Houston Business Show, Monday-Friday at 11 AM on CNN 650. Get weekly updates of the multimedia business content at that site through the Houston Business Review.

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