Market crash: are we there yet ?

[sck5]

"pre clinton era calculation"?

what is that? If you are talking about the difference between u3 and u6 as far as I know they never did count discouraged workers which is what u6 has that u3 doesnt.

i really dont think these numbers are fudged. they are collected via huge surveys by career people who really dont have a political ax to grind. if anything, nowadays they give more information than they used to do because they calculate unemployment in several different ways and report them all. If the media are too ignorant or narrow to be able to focus on more than one number then that is their fault and not the fault of the people who collect the numbers.

[TropicCat]

The way I read what she means is that Until Clinton there was no "U3" number. that was invented for press releases.

I know they changed the system, but didn't think it was under Clinton. Actually, I thought this was changed during the Reagan Administration.

A better question to ask is why the Media uses the lower number. This clearly implies that fewer people are out of work. It's misleading. We could argue why the government publishes so many "numbers', but at least it's there if you look for it.

Windy, I'm not sure why you include U3 in your chart? The exercise is to compare with the '30's, right? U6 is the right number.

[capecodphyllis]

Originally Posted by sck5

"pre clinton era calculation"?

Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld the mega-millions of discouraged workers who had been factored-in up until that point. The Clintons also used statistical camouflage to manipulate-down the 'self-employed out of work' number.

Therefore, we must always reanalyze the faked government numbers using the pre-Clinton era methodology. Doing so finds that the current unemployment rate hovers between 13.5 per cent and 18 per cent (using two different data sets and formulae).

(The Clinton administration also reduced monthly household sampling from 60,000 to about 50,000 to make their numbers look better. With malice aforethought this move specifically eliminated significant surveying in the inner cities. Without the inner-city data, suddenly blacks enjoyed better economic health than before (surprise!), giving Clinton credit for a joyous renewed enthusiasm for the American Dream even as the reality hidden in the ghettos and barrios was quite different. Then, just prior to leaving office, the shifty and slick Clintons successfully set into motion reestablishing the full 60,000 survey for the benefit of the Bush administration's monthly household survey!)

[TropicCat]

I'm really "Teed" off at what passes for news these days.

First, there is this article...

"The number of U.S. households faced with losing their homes to foreclosure jumped 32 percent in April compared with the same month last year, with Nevada, Florida and California showing the highest rates, according to data released Wednesday......."
"We've never seen two consecutive months like this," said Rick Sharga, RealtyTrac's senior vice president for marketing. "It's the volume that's surprising."

Surprising? Why would the AP interview anyone who says this is "surprising" after having a 3 month moratorium on foreclosure filings?

But wait...there's more


"Retail sales drop unexpectedly in April
AP

WASHINGTON – Retail sales fell for a second straight month in April, a disappointing performance that raised doubts about whether consumers were regaining their desire to shop. A rebound in consumer demand is a necessary ingredient for ending the recession.

The Commerce Department said Wednesday that retail sales fell 0.4 percent last month, much worse than the flat reading economists expected. The April weakness followed a 1.3 percent drop in March that was worse than first estimated."

Retail sales drop unexpectedly? This by the same news organization which just published an article 4 days ago on how unemployment grew to 8.9%.

Does the AP think we are Morons? Is the country so out of touch that this actually passes for news analysis?

[PBzeer]

Not to worry Rick, the anti-Bush has proclaimed 3.5% growth in the 4th quarter!

[TropicCat]

Finally one of my economic priorities is about to be addressed.

Those who have read my posts will recognize this as what I call one of the real problems with the fundamentals of the American economy.

It's about time Congress address PROBLEMS instead of giving Fox News a sound bite as they hand our tax dollars and America's future to the Banks.


"US Lawmakers Introduce Legislation to Combat China Currency Policy

Published 05/14/09 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

On Wednesday, a group of bipartisan lawmakers introduced legislation that would address currency manipulation and provide the U.S. with the means to retaliate against the unfair practice.
Introduced by Sens. Debbie Stabenow (D-MI), Jim Bunning (R-KY) and Reps. Tim Ryan (D-OH) and Tim Murphy (R-PA), The Currency Reform for Fair Trade Act would define currency manipulation as illegal trade distorting subsidies and would provide U.S. lawmakers with the tools to redress the practice. If a country was determined to be guilty of the practice, U.S. lawmakers would then be able to impose countervailing subsidies and antidumping duties to neutralize the negative effects of currency manipulation.
Currency manipulation occurs when a nation purposely undervalues its currency, making its exports artificially cheap and foreign imports wildly overpriced. This distorts trade, allowing the nation with the undervalued currency to maintain consistently huge trade surpluses. The victims of the practice, on the other hand, are forced to compete on an uneven playing field, lowering production and leading to job loss.

While the legislation mentions no country by name, it is clearly aimed at China, a well-known currency manipulator and a source of cheap labor for American companies looking to outsource manufacturing.

"The time has come for Congress to stand up for American workers and not allow China to run roughshod over the American economy. With this legislation we will finally force China to stop cheating and level the playing field for America's manufacturers," said Murphy.
Recent estimates have assumed that their currency is undervalued anywhere from 20 to 40 percent vis-à-vis the dollar. That has led to China accumulating an astounding $1.4 trillion surplus since 2001 with the U.S.

In a letter to colleagues asking them to cosponsor the legislation, the lawmakers acknowledge this fact and claim that it has cost the U.S. millions of jobs."

The rest of it is at:

Economyincrisis.org - America's Economic Report - Daily

[TropicCat]

Apparently the 'big Guns' in economics are beginning to speak out. Writing in The Wall Street Journal former Under Secretary of the Treasury and Stanford University economist John B. Taylor argues that the Federal Reserve is largely responsible for the financial crisis. He writes that Greenspan's low interest rate policy was in fact the cause of our almost depression. (big surprise)

That's true as far as the logic goes. But to leave it here is like playing 1/2 a game of chess. What Taylor didn't mention was that Greenspan had little choice. 20 years of off shoring jobs had left our economy with no place to put new workers. Let me clarify what I mean by the term 'workers'. I mean everyone. Kids graduating from college needed jobs just as much as the blue collar folks. Greenspan's low interest rate policy stimulated the only sector he could still effect change in, and provide jobs for millions of people. You might say that he was in a Catch 22. As we can all now see clearly, there was no way he could win that game.

However, in the process he created America's dirty little secret. Greenspan's loose money policies caused America's Banking Industry to grow to 33% of GDP, creating a Goliath that the American public was told could not be allowed to fail. We all see how well that's turning out.

Unemployment continues to grow. Housing prices continue to drop and foreclosures are at an all time high. So much for spending $700 billion on TARP. The only people happy are Wall St investors who apparently went shopping en mass at Macy's and bought themselves some very fashionable blinders. When the fundamental problems of our economy are ignored, the market rally will reverse. It has to. Consumer spending can not power our economy. They tried it. It failed. So far, no one has come up with plan "B".

Let's hope Democrats do much better. They had better get plan "B" done, as it's reported in every publication that Boss Limbaugh is leading his party into permanent exile. Personally, I feel after what they have done, that's exactly where they belong.

[camaraderie]

Originally Posted by TropicCat

It's about time Congress address PROBLEMS instead of giving Fox News a sound bite as they hand our tax dollars and America's future to the Banks.


"US Lawmakers Introduce Legislation to Combat China Currency Policy


While the legislation mentions no country by name, it is clearly aimed at China, a well-known currency manipulator and a source of cheap labor for American companies looking to outsource manufacturing.

I guess since they are not buying our T-Bills...we don't need em anymore eh?
I would also point out that having a law that SAYS we can take action is quite a bit different than TAKING action.
The DEMS appear to be quite good at posturing and making grand gestures without substance while they accelerate the slide into oblivion.

[wind_magic]

I've started to move back into cash.

I still like djia 9-9.5k june/july, but that high 8k number was enough for me.

I'll be watching over the next month or two for a good spot to pick up some winter 2009/10 puts.

Originally Posted by wind_magic

I am starting to look for the exit so I can get out of these long trades I have been in. I am still long at the moment, but I am getting out of all these April calls I have been holding, for example. The next few months I think we might keep rallying, these things can continue longer than you ever believe they will. If I had to guess again, and again I'd never trade this because you only trade what the market brings you, not what you think is going to happen, ...

* They keep buying off that 7k bottom into the high-8000's, possibly as high as 9500, advancing faster as the rally gets to its highest levels, bumpy until then - I think probably June/July will be a critical time for the longs.
* The exit will be a nice rally that heads for the sky for a number of days in a row, when they are all talking about recovery and missed opportunities to buy, when Kudlow is aglow and basking in his own greatness and can't stop bobble-heading the words "mustard seed". The bulls will be talking about how wrong all the bears have been, they'll even start talking about the buy-and-hold strategy again, talking about how people should have bought the bottom, about how there are still good stocks to buy and good prices, and all the rest.
* People will be talking about how the stimulus is working, how the acceleration in unemployment isn't increasing as quickly, housing numbers aren't as bad, blah blah blah, and they'll be talking about how the treasury bubble is going to burst, the $us will take a hit against other major currencies and commodities, people will even be talking about how strong spring home sales have been and season employment and all the usual non-sense, Obama the savior and Geithner isn't so bad ...
* Somewhere near the long term downtrend line when it looks like the bulls have it under control again and people are dog piling back in for a repeat of previous buy-the-dip "V" bottoms, I'll quietly get short again for the next leg down. It will again become time for treasuries, $us, and to sell everything else, but at that time it'll look like they are sounding the all clear and it'll be hard to get short (as usual) because it looks like the rally is so strong.
* Then I think equities will take a huge hit again, fast off of the rally highs, nearly straight down as people who got long at about 10k again realize that they are missing their chance to get out without losing everything, it'll be like a mass revelation all at once, and they'll panic sell it back into the 8000's and then try to save it by trading in the low to mid-8000's for a while. They'll remember how all they wanted was the chance to get out without losing everything, they'll remember how they felt during the first leg down, and plenty of new people will learn the hard way what a bear market rally is, and what it means to say that bear market rallies are stronger than bull market rallies.
* Then it'll sell the lows and once it breaks about 7000 again it won't find another floor until 5500 or lower, and the end of that leg down will be even more dramatic than the end of the first leg, and more people will finally settle in for the long dark bear market to come ...
* And people won't be amused.

Like I said, I'd never trade it, because you trade what comes, not what you think will happen ..

[TropicCat]

Originally Posted by camaraderie

I guess since they are not buying our T-Bills...we don't need em anymore eh?

I think that about covers it. Things are getting interesting.