I can’t claim that I ever understood the world of high-finance or what drives the stock market — and now I’m more confused than ever but I have a theory:

Since President Obama moved into the oval office the national debt has skyrocketed; unemployment is at a record high in many places; there is legislation pending that, by all indications, will eventually bankrupt the government (technically it already qualifies for bankruptcy) as well as the free-market; a judicial activist has just been appointed to the Supreme Court; the government is in the process of spending $3 billion to buy old cars and then, this morning, a story lead in the Washington Post informs me that: “Dow and S&P Close at New ‘09 Highs.”

Obviously, the current administration’s recession, compounded by its irresponsible behavior, has set the bar so low that bad news, that is not as bad as expected, becomes good news.

Here’s a paragraph from the article:

“Investors have been clinging to signs that the economic downturn is easing, and their hopes were stoked Friday by a Labor Department report showing that non-farm payrolls fell by 247,000 in July, compared with a drop of 443,000 in June. The unemployment rate dipped to 9.4 percent from 9.5 percent the previous month. Both figures were far better than many analysts were expecting.

Hey wow! Let’s celebrate! Unemployment has momentarily slipped by 0.1% and only 247,000 people joined the ranks of the unemployed. Well hold on to your noisemakers and bags of confetti for a while, Obama is promising us that unemployment will “top 10 percent” before it gets better; personally I believe the first part, that unemployment will go beyond 10% but I have serious doubts that it will get better, IF the current administration and the current Democratic majority have their way.

A perfect example of the reason for my skepticism is this August 7th article from the New York Times that tells how two Senate committees are still busily at work on cap and trade legislation that will, if passed, completely devastate the free-market and cause millions of more job losses. Oh don’t believe me; take it from Joel Kotkin at Forbes in this article or from Daniel Whitten’s article at Bloomberg both of whom predict very bad things for the economy — and for all of us — if this push for the “Green United States of America” continues.

But for now (a perfect example of how people will bet on ANYTHING) the stock market is rallying! But how low can the bar go before reality overwhelms even those high rollers?

LINKS:

Washington Post: Dow and S&P Close at New ‘09 Highs

New York Times: Boxer, Baucus Headed for Turf War Over Cap-And-Trade Bill

Forbes: Green Jobs Can’t Save The Economy

Bloomberg: Climate Bill to Raise Power Costs 20%, EIA Says