Markets Sober Up

Oil heading back up, dollar continuing down, Greenspan warns about size of deficit, Bush signs $800 billion debt increase into law.

Democrats said the debt limit increase, the third in as many years, was necessitated by Bush's "irresponsible" fiscal priorities, including what House Minority Leader Nancy Pelosi of California described as tax cuts for the wealthy and corporate handouts.

Republicans say the 2001 recession and the costs of the wars in Iraq and Afghanistan as well as the aftermath of the Sept. 11 attacks are responsible for the fiscal shortfall.

Well, their both right, but isn't it a croque du merde that Pelosi won't blame Bush for the illegal wars' contribution to the deficit, and the Republicans seem to see three of the biggest failures of aWol's first four miserable years as legitimate excuses?

And with Greenspan saying that our deficit is too big just as Bush approves making it bigger, I think this analyst has the proper interpretation of what's going on:

The Fed chairman, "left little imagination to currency traders other than to sell the US currency," said Ashraf Laidi, chief currency analyst at MG Financial Group. He said Greenspan's comments warnings about future declines in the dollar unless the federal budget deficit is reduced were particularly telling to the markets.

"This last comment is crucial, especially when the U.S. Congress last night rejected restrictions on tax cuts and spending, and raised the federal debt limit by $800 billion, to $8.18 trillion," Laidi said.

The stock market went on an appropriately drunken rampage after aWol's "victory," with the Dow rising some 500 points, but even those bozos are sobering up--the Dow is down over 100 points today. It may be that moment on Wall Street where they go from "Woohoo! Bush got re-selected!! More tax cuts! Less regulation! More wars!" to "OH MY GOD; FOUR MORE YEARS of spoiled-child leadership? We're doomed."