“Great” News
Stocks soared again on the GREAT JOBS REPORT – read below, up 165 points.
Bonds and gold moved sideways.
The Dollar lost significant ground today, as the Euro soared.
Oil and gasoline continued their climb – locking in the probability you will be paying more for your gasoline very soon.
In the news today…..
Jobs Report – did you notice the subtle change in this title??? Jobs report – not Unemployment report!!!!!!! Is this deception or just a friendly positive attitude from your government?
Here’s the news. GREAT NEWS. Only 539,000 people permanently lost their jobs last month. This brings the unemployment rate from 8.5% to 8.9%.
Why is this GREAT NEWS. Because that’s the way the government wants it SPUN. For those 539,000 people, I doubt they would consider it great news, but your government wants YOU to think it is.
The number is less than anyone expected it to be, and shows a decline in the unemployment acceleration. This might be good news, and it probably is good news from that perspective, but we should wait at least one more month before we open that champagne (unless you lost your job – then just open a can of ginger ale.) Also, the unemployment rate will continue to rise into the future, and it’s only 4 months into the year with 8 more month to get us to the end of the year. I still stand by my prediction of a 10% unemployment rate by year end.
One year ago, this number of lost jobs would be called a catastrophe. Why is it called “good news” today??? You know the answer.
And, here is another fact. 66,000 jobs were GAINED by government hiring – mostly to perform the census coming up. If the government hiring hadn’t happened, this unemployment percentage would have been much worse.
Fannie Mae – needs to have an additional $19B cash infusion after 1Q 2009 losses. This is a bottomless pit that taxpayers will be filling for the foreseeable future. Oh, bwt, Freddie Mac will follow the example set by Fannie. Before the current request the government has placed $60B into these two companies. Now that the government owns these institutions outright, YOU are on the hook to pay the loss forever. You better start praying for a housing price bottom, so the bleeding stops soon.
Stress Tests – “ARE A BIG LIE!!!!” This according to a former bank regulator, William Black, professor at University of Missouri. Why is he saying this?
- The stress tests don’t qualify for being even “wimpy”. While banks are complaining that looking out 2 years is WAY too stressful, Congress had a look out period of 10 years for Fannie/Freddie – and they passed their stress test, but failed in the end – remember? So, how good are stress tests in the first place?
- The stress tests say the banks will have a $600B loss, and need to raise $75B in new capital. Isn’t there something wrong with the relationship of those two numbers?
- We are starting down the road already plowed by Japan, where there are “rolling recessions”. Japan is now in its second decade of rolling recessions.
- What will the US citizens say when they find out they’ve been lied to?
- 2010 and 2011 will have a large number of option ARM mortgages resetting. A whole bunch of people will be very surprised when their mortgage amount goes WAY up, and the foreclosure rate will start to climb again. This will be the “second wave” of foreclosures that is associated with our housing crisis. A lot of the people paying these loans are choosing to pay the minimum amount – meaning their principle amount is increasing each month – while their house price is going down in most cases.
I would say that Professor White’s position is fairly strong.
Here are the last numbers for today:
Dow Jones 30 Industrial – 8575 (up 165 points)
10 Year Treasury Bond – 3.29% (no change)
Euro – $1.3641
Gold – $915 (down $1)
Oil – $58.63 (up $1.92)
Gasoline $1.71 (up $0.04)
