Index Percentage % Volume
Dow -1.09% up
NASDQ -1.14% flat
S&P500 -1.07% up
Russell2000 -2.68% -

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News

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Worried – Your Job/Income?

In about a week the jobs (unemployment #’s) will come out for the month of February. 598,000 was the number for January and the previous two months were about the same. Estimates for February are in the same ballpark. To understand the depth  of  “the great recession” lets compare the job loss with the last 2 recessions of 2001 and 1990 – How Bad Is It Now? (Link from Time & CNN)

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What Job Loss Means -

Almost Everything – Consumers (70% of the economy) consume a whole lot less when they loose their jobs. The unemployed are no longer able to afford their mortgages payments and more defaults will occur in the worst housing and credit crisis since the Great Depression. Add to this our media that over sensationalizes every major story and Americans who are very vulnerable to fear mongering. If not stopped, the  job losses create a vicious growing cycle 

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The Edge of the Cliff

The #1 Insurance Company (AIG), American auto Industry, the #1 conglomerate (GE – stock price dropping like a stone) and mega banks are on the edge of a cliff.  If all these were allowed to collapse like Lehman Brothers (a relatively smaller institution that had $400 billion in over  leveraged debt) imagine what would happen to the unemployment rate, increased debt, and the panic that would follow. Again see link - How Bad Is It Now?

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Solutions

Some on the far right want to do nothing, just let it all crash and burn. The following worldwide economic chaos would easily lead to wars, protectionism, and another Great Depression. Others believe we should act in similar ways that solved other recessions – Bailouts, stimulus packages, tax cuts, increased money flow, lowering interest rates etc.. The problem that exacerbates any active solution is that since 2000 our fiscal and trade deficits have mushroomed

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Who Pays for the Solutions?

This is along with what solutions to choose is the major questions confronting our government. So far lowering interest rates, Fed loaning/printing money, & foreign countries adding capital have been relatively less controversial ways of offering solutions.  But its not working nearly as well as we want it too.  So that leaves the following to pay – YOU (taxpayers), Shareholders, Bond holders, Employees (from CEO’s or gofor’s) or another Ponzi scheme.

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There is Hope

Obviously, not enough time and space to go over all the solutions. However, President Obama has outlined his plan and the vast majority of Americans have agreed to follow his general outline.  There is NO quick fix and its going to get worse before it gets better. See yesterday’s blog.

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AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

Stocks

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Technicals & Fundamentals

Another huge volume day. Stocks pulled back about 1%.  Our mother of all support levels has held - Benchmark S&P 500 area around 750 – the 2002/2003 low. Stocks are oversold so it looks like at least a short term technical rally off the support levels will occur. 

Two major fundamentals impacting markets. Jobs numbers for February announced next week and Treasury Secretary Geithner’s plan on how to fix banks. On the later, the more YOU pay to fix the bank the better it is Wall Street. 

Weekly jobless claims grew (announced 8:30EST) from an average of 633,000 to 667,000.  Bottom Line  - Worst than was expected numbers and gives you an idea how bad February will be.  

 

Long Term Outlook BEARS RULE

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See STRATEGY, POSITIONS, OVERVIEW  & ARCHIVES sections of blog for more

AS ALWAYS DO YOUR OWN RESEARCH BEFORE INVESTING!

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