Dow

[Dr_Who]

U.S. Unemployment Rate to Reach 9.4% This Year, Survey Shows

http://www.bloomberg.com/apps/news?p...Ntk&refer=home

[lakedaemonian]

U.S. Unemployment Rate to Reach 9.4% This Year, Survey Shows

http://www.bloomberg.com/apps/news?p...Ntk&refer=home

I'll bet 2009 ends over 10% unemployment in the US.......and far closer to 20% by the end of 2010

[Dr_Who]

I'll bet 2009 ends over 10% unemployment in the US.......and far closer to 20% by the end of 2010

If your forecast is correct, then the global economy is heading for a depression. Why would you say 20% by 2010?

[lakedaemonian]

If your forecast is correct, then the global economy is heading for a depression. Why would you say 20% by 2010?

finance

insurance

real estate

construction

retail

leasure

tourism

...all are major employment sectors that already are, or soon will be, under extreme duress.

California already hit 10.1% in January...it's not rocket science

Hold on....the downward spiral ride is only getting started.

---------------------------

Here in NZ I'm most worried about access to overseas credit for that 30% we can't fund ourselves.....it could soon feel like living at 5000m and donating blood every other day

[lakedaemonian]

http://www.nytimes.com/interactive/2...NHARDT.html?hp


Keep your eyes out for politically expediant redefinitions of unemployment.....again

If the numbers don't add up...change the equation!

[ananda77]

Timing! 20% in day on GE and MS! 50% in GE in less than a week! Just beautiful! ... Stops adjusted accordingly tho.

One notes that the yield on the 10 and 5 year treasuries hasn't dropped back as it did in Jan following Nov 20th thrashing ... methinks the smart money is getting ready to move back into stocks. The timing would be about right ... 6-9 months before the end of the recission which would make the end between sept - dec. Feels about right. A long recession by recent standards.

Time to start looking long

...good one...

09/03/2009 ...consequently, the market could be in for a consolidating period (>675/725<) short term (couple of days) before trying to take out SPX500 *640; if *640 holds = multi-month bear rally possible and likely (considering quite a few positive divergences developing over the last few trading days)

Trading strategy: best option (safest): sideline until resolved (bottom in place); or short SPX500 *725;

...most likely playing out within the next 24hrs

Kind Regards

[ananda77]

Thanks A77 ... Burst my bubble why don't you. But yes - you could be right. Some brokerages must be creaming it in today. Huge volumes would suggest that Mrs Market (the market is a woman not a man!) is picking a bottom at these levels and will be happy to hold even if it drifts a bit lower. C's result is positive but the enthusiasm for C today I don't feel is justified given it's fundementals. Should be shorted tomorrow - watch out!

...OK, maybe the market will take a go at the SPX500 *640 coinciding with the option expiry sometime in March (very long nice tail trail after a very hefty downward move) and not within a 24 hr period;

...anyway as far as banks are concerned, this is still in the play:

...259000 call options (US$7 m) bought on the XLI (Industrial Fund Candidates: GE, UPS, UTX, CAT) last Thursday

...rumors have it, deal is based on:

>a House Financial Services subcommittee is planning a mark-to-market meeting; current mark-to-market rules forces banks to value assets at current market prices. forces banks to report billions in write-downs; write-downs will disappear if the mark-to-market rules are eliminated or put on hold for a year

Trading Strategy: safest >sideline till resolved or short SPX500 *725+

Kind Regards

[Dr_Who]

Ananda, where do you get the info you just posted from?

Do you have a link, cos it is very interesting. Cheers.

[frostyboy]

the put to call ratio at the end of monday suggested tuesdays rally.

if this is subwave 4 the spx shouldnt go above 800 and a rally to like 820 would clean out most shorts. some new traders got too bearish over the last two weeks and gave some money to the pros. hope this isnt the bottom and so i miss the multi month rally i am thinking about

[ananda77]

Ananda, where do you get the info you just posted from?

Do you have a link, cos it is very interesting. Cheers.

Dr.Who:

...it is something some people were advocating for a while back...

(Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand)

September 23, 2008
Has Deregulation Sired Fascism?
By Paul Craig Roberts

Washington has been slow to recognize the current problem. A millstone around the neck of every financial institution is the mark- to-market rule, an ill-advised “reform” from a previous crisis that was blamed on fraudulent accounting that over-valued assets on the books. As a result, today institutions have to value their assets at current market value.

In the current crisis the rule has turned out to be a curse. Asset backed securities, such as collateralized mortgage obligations, faced their first market pricing in panicked circumstances. The owner of a bond backed by 1,000 mortgages doesn’t know how many of the mortgages are good and how many are bad. The uncertainty erodes the value of the bond.

If significant amounts of such untested securities are on the balance sheet, insolvency rears its ugly head. The bonds get dumped in order to realize some part of their value. Merrill Lynch sold its asset backed securities for twenty cents on the dollar, although it is unlikely that 80 percent of the instruments were worthless.

The mark to market rule, together with the suspect values of the asset backed securities and collateral debt obligations and swaps, allowed short sellers to make fortunes by driving down the share prices of the investment banks, thus worsening the crisis. With their capitalization shrinking, the investment banks could no longer borrow. The authorities took their time in halting short-selling, and short-selling is set to resume on October 3 or thereabout.

If the mark to market rule had been suspended and short-selling prohibited, the crisis would have been mitigated. Instead, the crisis intensified, provoking the US Treasury to propose to take responsibility for $700 billion more in troubled financial instruments in addition to the Fannie Mae, Freddie Mac, and AIG bailouts. Treasury guarantees are also apparently being extended to money market funds.

All of this makes sense at a certain level. But what if the $700 billion doesn’t stem the tide and another $700 billion is needed? At what point does the Treasury’s assumption of liabilities erode its own credit standing?
http://www.vdare.com/roberts/080923_deregulation.htm

THE FED
Bernanke: We need improvements to fair value rules
Crisis has 'revealed some shocking gaps' in regulatory oversight, he added

Bernanke did not provide details about what kind of changes he would like to see to mark-to-market rules. Lawmakers on Capitol Hill will be considering alternatives at a House securities Subcommittee committee hearing Thursday to examine the regulations.
Proponents of eliminating or adjusting mark-to-market rules argue that changes could help restore confidence in the overall economy by propping up the value of banks, which would expand lending again as a result. However, supporters contend that keeping the methodology intact is necessary because shareholders deserve to understand the troubled state of financial institutions.
http://www.marketwatch.com/news/story/Bernanke-We-need-improvements-fair/story.aspx?guid={D596313D-1B4A-4CE7-AEA1-3F4F79DE504D}

Kind Regards