Dow Sets Another Record–This Time It’s Good

Well, I don’t know what you did over the weekend, but it was obviously the right thing. Wall Street rebounded today in a big way.  Posting the biggest single day increase in history, the Dow ended the day up 936 points, nearly doubling the previous one day record.  Way to go!

Speaking of the weekend, this past Saturday was a glorious day here in the midwest.  We had clear skies and summer-like temperatures.  It was such a nice day that the lovely and talented Mrs. B and I decided to pack up a picnic lunch and head to "Missouri Wine Country", an area that begins about a half hour west of here.  There are a number of wineries that offer tasting and wine for sale along with outdoor areas and usually live music.  Of course, you pay a premium for the wine. 

Now, I think you’ll agree that wine is not a necessity.  Most of us may enjoy a glass now and again, but in a tough economy, you might think that vino would be one of the first things to go.  If your investment portfolio had gone in the tank last week, you might be expected to be drinking cheap wine right out of the bottle, rather than dining al fresco with a $25.00 bottle of Norton.  Wrong!

Traffic was backed up along Highway 94 waiting to get into the more popular wineries.  One had a sign posted, "No Parking, We’re Full".  Another, open just two months, was running a shuttle from a remote parking lot to their tasting/sales room and had set up a card table as an additional selling station.  Every single winery was filled to overflowing with customers enjoying the nice day.

How can this be?  Didn’t we have the biggest single-week loss ever in the market last week?  Didn’t the government have to step in, not just in the United States, but in a number of countries, to bail out their banking systems?  Isn’t everyone waiting for the other shoe to drop?  Aren’t we supposed to be cutting back?

Here’s the thing.  The middle class, the ones that are supposed to be having such a hard time, may not believe the hype.  They have a job.  They have money.  They may not have gotten the message that they shouldn’t be using their charge cards.  Or, if they have, maybe they think there’s value in spending the day in the sun, enjoying some food and wine with their friends, not thinking about what may be coming down the economic road.

Today’s big gain in the market may be a continuation of the roller-coaster ride we’ve been on, or it may mark a turning point in the world economy.  After all, other markets which are open while we Americans sleep, had big gains overnight.  World leaders have shown that they can work together to get things done.  In twenty-four hours we’ll know what tomorrow holds, but not before.

Meanwhile, as someone (besides Sean Hannity) once said, "Let not your heart be troubled."  Should we all be cautious?  Absolutely!  But life (and business) goes on.  I’d say cautious optimism is the way to go.  Another cliche is "Expect the best but plan for the worst."  It’s hard to argue with that one.

How about a glass of wine?

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