Amid the stock market disaster:
- China’s skidding economy explains a big part of the market meltdown. Multinational stocks are getting crushed, not because of the S&P downgrade but because China has braked too hard.
- The S&P downgrade was a needed kick in the rump. But did President Obama feel the kick? His Monday talk sounded defensive and snarling. It hurt confidence, and hurt him.
Oil’s plunge will help consumers after they climb out of their bomb shelters. In a few months, Wal-Mart will tell us that consumers feel better, equipped with billions of dollars in gasoline savings. GDP will get a 0.5 boost from cheaper oil.
- The markets need good news from China and proof that Japan is rebounding from the earthquake.