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Seven reasons the market is not going up any time soon: #7 The government is gasping for air

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Yes, Uncle Sam is going to continue buying stuff and stimulizing (a new word for the new economy) with money it prints. And -- getting back to pure Yogisms -- it ain't gonna work.

The net decline in wealth -- including the stock market, housing, private equity, etc. -- plus the withdrawal of credit now totals $415 trillion or more. You think $700 billion for concrete and a fat guy holding a "Go Slow" sign is going to help?

Roosevelt calmed people by spending a fortune in and on the Works Progress Administration (WPA) -- great buildings and better murals, but not a lot of long-term economic impact.

We are a bit too advanced for that kind of naïve reaction. Not to mention the government is going to need many more trillions to fix the financial system.

And that's the rub -- even Uncle Sam cannot help too much, long term, as the world kicks its addiction to excess credit. And with that goes a big drop in fundamental demand, from the United States to China.

Be sure to read all 7 reasons the stock market isn't going up any time soon.

Michael Shulman is a contributor to OptionsZone.com.

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Symbol Lookup
IndexesChangePrice
DJIA-17.2410,433.71
NASDAQ-6.832,169.18
S&P 500-0.591,105.65

Last updated: November 24, 2009: 11:09 PM

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