Global No Confidence Vote: Bush Boom Kaboom

October 9 is a very important date in the recent history of the Bush Economy.

On October 9, 2002, the Dow hit its lowest point so far during the President's two terms: 7,286.27.

On October 9, 2007, the Dow hit its highest point in the Bush Presidency: 14,164.53.

Stocks drifted higher through the morning, flattened out in the early afternoon and then began to rise as investors digested the minutes from the Sept. 18 Fed meeting, released at around 2:00 p.m. ET.

"The market had a desire to keep going up and there was nothing in the minutes to prevent it," said Paul Mendelsohn, president and chief investment officer at Windham Financial Services.

Mendelsohn said that investors were a little cautious leading into the minutes but once they saw that there was nothing particularly surprising in the minutes, they redoubled their efforts to move stocks higher.

The Dow and S&P 500 carving out fresh all-time highs will give the stock market more ammunition in the short term, he said, provided that the earnings don't derail the momentum.

Investors already know that third-quarter earnings growth will be at the slowest pace in more than five years. But outside of the financial and homebuilding sectors, there may be expectations for results to beat, particularly in the case of multi-national companies that should benefit from the weak dollar, Mendelsohn said.

The period is called the "Bush Boom", the greatest economic story ever told if you ask Sean Hannity or Larry Kudlow. (You know, despite Bill Clinton taking the Dow from 3,500 to 10,500 during the course of his Presidency, tripling its value.)

Today, one year later after the Bush Boom, we have the Bush Kaboom. Today, October 9, 2008, the Dow closed at 8579.19...a loss of 39.4% in one year.

In the five years of the Bush Boom, the Dow gained 6878 points.

In the year since, we've given 5585 of those points back.

By January 20, 2009 I'm betting 7286.27 would be a really great level for the Dow to be at. I'm convinced we may be looking at Bush ending where Bill Clinton started on January 20, 1993...

3241.95.

We've lost over 2500 points in just 9 trading days...37% of the Bush Boom has vanished in the space of two weeks. We'd set a new low in Bushonomics sometime next week.

At that pace the Dow is gone well before January. Hell, it doesn't even make it to December.

The credit markets are still clogged. The housing market is still in freefall. The derivatives are still crushing the lifeblood out of companies. The cardiac arrest is now global.

The Great Reset Button has been hit. Things are accelerating now at a pace that even my wildest nightmares couldn't birth.

Tomorrow's G7 meeting is the last stand of the Alamo. Whatever comes out of this meeting is the world's last bullet in the gun.

This weekend's G7 finance ministers meeting will focus discussion on the current market turmoil as 'global phenomena,' Treasury Undersecretary for International Affairs David McCormick said today.

'We are all affected by it, and strengthened international collaboration is needed now more than ever to find collective solutions to achieve stable and efficient financial markets and restore the health of the world economy,' McCormick said today in a pre-meeting press conference.

McCormick noted that he and Treasury Secretary Henry Paulson have been in regular contact with the G7 and other international counterparts, but Friday's meeting 'will provide us with a timely opportunity to further strengthen our collaboration.'

The Undersecretary said that the US will not seek a 'one size fits all' global approach dealing with the current economic crisis, but would instead favor a framework in how to address economic strengthening. McCormick said that inflation is something the finance ministers will be 'mindful of' in their discussions this weekend, but is unlikely to be the focus as it was in their last meeting.

Don't fool yourselves. Inflation is very much on the minds of these ministers. They are wondering just how much hyperinflation it will take to "save" the global economy. That's the last magic bullet.

And should that magic bullet fail, as every other bullet has failed, then we get front row seats to the end. Even if it succeeds...we still get front row seats to the end.

The end is the final Bush/Cheney October Surprise. What does it entail? Who knows? My nightmares aren't talking much these days...they're too busy watching their 401(k)s become 911(doa)s. But any way you slice it the GOP is across the board dead. All the power Bush and Cheney have taken for themselves will be given to Barry and Joe in a matter of months.

Or at least, that's the plan on paper. The reality...well the last 3 weeks shows that reality can hit a snag every now and then.

Given what this President and Vice President have done in the last 8 years, do you honestly think they will sit back and allow John McSame to lose this election?

Do you think there will even BE an election? I'm not sure we won't be under martial law by then.

The next 3 weeks is the end of one story.

Who will write the next one? I don't know. I don't think it will be Obama, but I have hope.

But whatever that story will be, it will be a horror tale that will make your soul curdle and your blood boil. Whoever gets to write it, the poor miserable schmucks in the tale will be us. We will be hurting. The only question is how long and how deep it will be...a two or three year vicious recession and a lesson learned, a generation humbled...or a ten-year global depression and the resource wars that will come with it...or something in between. I don't know.

But be prepared. This time, I mean it. Be prepared...for anything. We're in uncharted parts of the map, folks. Tectonic plates are moving in our history. The new order that emerges from this will not be the same as what we have lived with so far. America will be radically different...and soon. Those standing near the edges will get smashed.

A wise man knows that the Chinese symbol for crisis contains the symbol for opportunity.

An even wiser man once said that "any man who can hitch the length and breadth of the galaxy, rough it, slum it, struggle against terrible odds, win through, and still knows where his towel is is clearly a man to be reckoned with."

Be prepared. Have a towel on hand. Things will get messy shortly.

Kaboom!

Cross-posted at the Frog Pond.