Last Monday, during his address to the American people, President Obama expressed his deep frustration that a small band of ultra-conservatives (i.e. the Tea Party) could prevent the passage of a bill to raise the U.S. debt limit ceiling.   In spite of the dire economic consequences of failing to take action, the Republican Party is prepared to let the U.S. government default on its debt before they will compromise on any provisions that don’t meet their strict ideological standards.   The very next day, on Tuesday, Speaker Boehner let it slip …

Unfortunately, the new mantra of the American business community is now “what’s good for the Chinese economy is good for America”. To that extent, the decision by Chinese authorities to slow down growth and tighten controls on lending has gone over like a “lead balloon” in the U.S. equities market. To show their displeasure with the Chinese for raining on their recovery parade, investors in U.S. stocks drove down the Dow Jones Industrial Average by going on a very predictable, selling spree.

The continued high unemployment rate, the weakness in manufacturing, and the tightening-up of Chinese monetary policy have all contributed to a feeling among investors that stock values may be too high.