2-11-08 by Court
Looks like the Dow Jones is looking for some
speculative boost to the topsy-turvy, overall-sagging fortunes of Wall
Street. Altria (aka Phillip Morris) and Honeywell are off of the Dow
Jones Industrial Average. Chevron and Bank of America are
in. The Wall Street Journal alert says, "The change is the
first in four years and reflects the index’s continued shift away from
industrial firms and into other sectors such as energy and financial
services." Odd, isn’t it? The "industrial average" moving away from
"industrial firms." Hmmm.
What do banks and oil companies
have in common? Profits from speculative, virtual activity, not
real production. Oil and gasoline are both commodities pegged at
artificially high values, leaps and bounds above actual production
costs. The subprime crisis is proving the fallout goes well
beyond a sector of the economy when the bubble and bad bets are big
enough. Big Oil’s bounty comes from a secretive, open-to-manipulation
speculative market that reminds us of the Enron-era accounting.
In with the oil and banks, out with the folks who really make
something. Hold onto your nest-eggs, shareholders, any short term
inflation in the Dow is prone to a big Kaboom.
We are still waiting for the answer to the question Dugan asked about the cause of $100 per barrel crude oil. When will the regulators step in?