Don't expect the bad news to end any time soon. As long as politicians continue to try to sweep things under the rug, both in the US and in Europe, markets will swoon from time to time.
But, the markets have priced much of this in. The markets are not fooled by the politicians. The truth is that Europe and the US have both put their economies in straight jackets for the foreseeable future. The desire to do good has accomplished what sworn enemies could never achieve -- the decline of the Western economies. We are watching that unfold before our eyes. This means periodic slamming of markets.
But, the larger companies will survive this onslaught. They are in cahoots with the politicians in any event. It is the small companies and the middle and lower income groups who will bear the brunt of the unwinding of the European-US pipedreams.
All of this protection for minorities, for the disenfranchised, etc., simply entrenches the wealthy, like Warren Buffett and Bill Gates. None of this really affects them and their wealth will survive this. Obama will live to a ripe old age and will be worth hundreds of millions of dollars, if not billions, in the late stages of his life. They've got it made.
The ones that lose are those trying to make their way in this sea of red tape and mixed signals. Anyone who wants to start a business or build a career starting from ground zero has no real shot in the world that is now the Eurozone. The US is rapidly becoming its twin. The real losers will be the minorities, the low skilled, the poor and the middle class. They have no future in the world that their great champions have created for them. That's why Buffett likes this and is its most visible cheerleader. He and other rich folks have nothing to lose in this brave new world.
Economist Thomas Sowell wrote a great book entitled "The Vision of the Annointed," where he describes in detail the process by which do-gooders destroy the opportunities for poor folks. Now we are seeing Sowell's vision play out on the world stage.
But, stocks will do fine and so will Warren Buffett.