Postscript After the Close:Today is the last trading day for January. If we go out near the current lows of the day, this will be the worst January for US equities in the last 92 years.
The Dow Jones Industrial Average finished January down 8.84% on the month. Previously, the worst January for the Dow had been that of 1916, when it fell 8.64%. Friday, the Dow dropped 148.15 points to 8000.86 after briefly dipping below the 8000 mark. The Dow has fallen five straight months and in 12 of the last 15.
There will be no sustained recovery in the economy until the median wage improves. Allowing the banks to lend again to support consumption is a complete waste of capital. The purpose of not allowing bank failures, as in the 1930's, is not to save the banks, but to preserve the funds of private savers.
We should back the pensions and the savings of individuals one hundred percent. Government support should not be given to banks that are insolvent. They should be restructured first, and then recapitalized.
