Mercedes Benz said it sold more cars last month in the US than it had in any July in five years.

Amid a generally blah spring for car sales, Ferrari just turned its best half year in history, with revenues up nearly 20 percent from the year before. Worldwide, it delivered 11.8 percent more cars in the first half of 2011 than it did in the first half of 2010. And the U.S., its largest market, is booming. Sales in North and South America (with the U.S. accounting for the overwhelming majority of sales) were up 23.9 percent in the first half, to 939.

And Obama says... "Lower payroll taxes Congress".

Almost magical, we are right at hitting 10% unemployment, and the President thinks lowering taxes, which hasn't worked for 10 years, is the solution.

Not to mention his inability to take any responsibility and subtly shift blame to Congress.

This is a classic Bush move.

Yes, this drop is due to many factors and blaming it all on our terrible elected leaders is not entirely fair.

The stock market has been FANTASTIC since around March 2009. It recovered nearly all of it's value in such a brief time that it represented the greatest extended rally in history. And yet that didn't reflect the American economy as it was -- weak and still hollowed out on the demand-side. There's been confirmation of that with a few bits of data over the past couple weeks, and phantom gains are getting recouped.

If the United States had implemented stronger demand-side stimuli for the American consumer, there'd be more demand, there would be more manufacturing, global sourcing of materials would be higher, economic liquidity would be higher, and overall the stock market would be less illusory. I don't think that's up for debate. There are only a tiny handful of people who could successfully push for demand-side stimulus. Rep. Kucinich and Sen. Sanders are not among them. The presidents of Italy and Spain are not among them. President Obama and Sec. Geithner are among that handful. They practically ARE that handful.

Just Happened, sure we filled our pockets and emptied yours, but who could have predicted any of it ?

Those ~500 people in Congress control the purse strings and essentially the the world's premier economy ?  

The debt ceiling battle badly damaged our economy. The world was bombarded with dire news on an hourly basis by politicians whose only objective was to score political points. When you have the Republican leader in the Senate state that he will allow nothing to be done that would make Obama look good, we have a major problem.

The other problem is that Obama steadfastly refuses to accept this fact. He stayed above the fray on the stimulus, HCR and now the debt ceiling. In each case he allowed the issue to drag on entirely too long before he stepped in. By the time he entered the debate, the battle had already been lost.

I think most sustained market declines are due to a number of factors.

If this one persists, I think there are a number of causes (in no particular order):

1. Lack of projected stimulus
   
2. Spain
   
3. Italy
   
4. Greece
   
5. Uncertainty over our ability to govern towards solutions
   
6. Housing softness

When we discuss the correlation between our government's actions and the economy, we rarely hear anyone factor in the outside influences we have little control over.

On your question-- I don't recall ABG ever suggesting that the debt ceiling business was the only thing that could negatively affect the stock market, do you?

Fundamentally our unemploment levels are tied to the banks.  And although we express outrage against them, their health is vital to us.   And they are interconnected in a way no other institution is. So although the US banks may be celebrating an uptick, it could all be erased by banks in the UK bottoming out. And it is a viscious circle. The banks are the largest holders of government securities in every country. If a country's debt becomes unstable or loses value, the banks lose capital and can't lend.  No lending, no economic growth. No economic growth, bank runs and no jobs.  No jobs and the country's debt becomes less valuable. And the cycle repeats.

That is happening right now in Spain for example. Bailouts are a bad word in both liberal and conservative circles, but it could be the only thing that saves them.

I would like Obama to come out this week and explain what is happening on a global level, but I don't think he can.  We are too focused inward and angry at all of our leaders to listen or care.

To tell you the truth ABG, I have been little concerned with Spain, Portugul, Greece, Ireland, and Iceland, based on their size relative to the global economy. I worry that Italy could be a tipping point, just the vast numbers of countries in the eurozone having difficulties.

But if France, Germany, Great Britain, or The Netherlands begin having more, deeper problems, I will join you in a heightened level of concern.

So Italy does have a legitimate point here. The only reason people give these credit ratings agencies any credence is because they don't know what all is involved.

Traditionally, an exporting country that is having problems selling their products outside their countries could lower the value of their currency, thus making their products more competitive.

I hope you are right because the currency markets are freaking the *}%[! out right now.

Oh, you can't get Sello Rojo quality up here...I'll buy it the day it's roasted, so it ought to be no more than 7 days old when I get to Ft. Lauderdale.