Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19
Stock Market S&P 500 Negative Expectations Again - 13th May 19
Why Rising Living Standard in China Offers Global Hope - 13th May 19
Stock Market Anticipated Correction Starts On Cue! - 13th May 19
How Chinese Trade Issues Will Drive Stock Market Trends - 13th May 19
Amazon SCAM Deliveries for Fake Verified Purchaser Reviews "Brushing" - 13th May 19
Stock Market US China Trade War Panic - Video - 13th May 19
US Stock Market Leading Macro Economic Indicators Update - 12th May 19
SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks - 11th May 19
US Increases Trade Tariffs Against China – Stock Markets, Gold, and Silver - 11th May 19
Who Has More To Lose In A No Deal Brexit? - 11th May 19
Gold at $1,344 Will Start Real Fireworks on the Upside - 11th May 19
Make America’s Economy Great Again - 10th May 19
Big US Stocks’ 2019 Fundamentals - 10th May 19
Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - 10th May 19
Stock Market Shake-Out Continues – Where Is The Bottom? - 10th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Financial Doomsday for All Asset Classes

Stock-Markets / Credit Crisis 2009 Jan 10, 2009 - 11:41 AM GMT

By: Anthony_Cherniawski

Stock-Markets Best Financial Markets Analysis ArticleEmployment situation… grim. Nonfarm payroll employment declined sharply in December, and the unemployment rate rose from 6.8 to 7.2 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employment fell by 524,000 over the month and by 1.9 million over the last 4 months of 2008. In December, job losses were large and widespread across most major industry sectors.


To add insult to injury, the Bureau of Labor Statistics added 70,000 “hypothetical” jobs in December. Could it be that the real employment numbers fell by 594,000?

“This was the most rapid deterioration in the labor market over a six-month period since 1975,” said Michael Darda , chief economist at MKM Partners LP in Greenwich, Connecticut. “Policy makers will go full throttle” until “the labor market starts to turn,” he said.

No surprises here.

Consumer credit decreased at an annual rate of 3-3/4 percent in November 2008. Revolving credit decreased at an annual rate of 3-1/2 percent, and non-revolving credit decreased at an annual rate of 4 percent.

Washington creates a “financial doomsday” for small retailers. 

A new government regulation scheduled to take effect next month has thousands of retailers, thrift stores and small businesses worried they will be forced to permanently close their doors – and destroy their merchandise. Even Goodwill Industries told the station it may be forced to stop selling clothing and other children's items if testing is too expensive. The move could affect consumers who donate items for tax write-offs if the stores are not able to sell them.

What's next for equities?

-- U.S. stocks stumbled under the burden of an employment report that showed monthly job losses in line with analysts' expectations but also highlighted the longer-term struggles of the U.S. economy.

While the numbers were not as bad as the dire predictions of 700,000 or more new unemployed workers, the numbers are preliminary and subject to revision, just as the November numbers were revised upwards in this morning's report.

 

 

Bond holders are near the exits.

-- Treasuries are off to the worst annual start in more than two decades on concern debt sales will swell to unprecedented levels amid efforts by the U.S. to spur economic growth with spending increases and tax cuts. The expectation is that the proposed new stimulus package on top of the existing ones may create a supply of bonds greater than the demand for them. The huge fiscal deficit in Washington will also cause risk premiums to go up, even in the most conservative class of income securities.

 

 

 

Gold pattern may mimic that of stocks and bonds.

Gold fell as the dollar gained against the euro and after oil declined, curbing the metal's appeal as an alternative investment. Bullion fell as the prospects of a European Central Bank rate cut pressured the euro, bringing the dollar's gain to 2 percent this week, as the precious metal declined 2.3 percent.

 

 

 

 

Japanese stocks face reality as “window dressing” period is over.

-- ( Bloomberg ) -- Japan stocks slumped today as earnings prospects for automakers took a turn for the worse and a stronger Yen takes away the competitive edge for Japanese exports. “As we enter the earnings season, no good news can be expected,” said Yoji Takeda , who manages the equivalent of $1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. “Actual numbers and forecasts are likely to be even worse than investors expect.”

 

 

 

Chinese stock rise on subsidies, not profits.

-- ( Bloomberg ) -- China's benchmark stock index rose for the first time in three days, led by power producers on speculation they will get subsidies from the government. The market has perceived the aid to power companies as a signal that more favorable policies will be worked out to help them,” said Wang Peng , chief investment officer at First Trust Fund Management Co. in Shanghai, which oversees the equivalent of $2.1 billion. “There won't be aggressive buying in the near future as investors are still concerned about the first-quarter earnings that may fall sharply.”

 

 

The Dollar hesitates on falling stocks.

( Reuters ) -- The U.S. dollar weakened against the yen on Thursday, as falling stocks worldwide and weak sales at top U.S. retailer Wal-Mart tempered the market's appetite for risk and reignited worries about the global economic outlook.

The greenback also fell against the euro after the latest weekly data showed the number of Americans on unemployment benefits rose to a 26-year high.

 

 

 

Housing kept aloft by “weak hands.”

As the U.S. housing recession enters its fourth year, there's no sign of a recovery because speculators account for most of the rise in sales. The repossessed properties offer opportunities for investors, who typically buy homes at auction and rent them out until prices increase and they can sell. “You don't have it in strong hands, you have flippers,” said Shiller, who helped create the S&P/Case Shiller real estate price indexes . “These speculators are preventing the market from crashing now, and when they get out it could fall again.”

 

 

 

Change of trend…or a bump in the road?

The Energy Information Administration reports that, “For the first time since September 15, 2008, the national average price for regular gasoline increased. The price jumped 7.1 cents to 168.4 cents per gallon. Despite the increase, the price was 142.5 cents lower than a year ago. Although prices rose in the East Coast, Midwest, Gulf Coast and West Coast regions, prices slipped slightly in the Rocky Mountains and the Central Atlantic portion of the East Coast.”

 

 

Natural gas prices decreased for the week in the lower 48 states.

The Energy Information Agency's Natural Gas Weekly Update reports, Natural gas spot prices increased at most market locations in the Lower 48 States, posting increases of 10 to 41 cents per MMBtu since Wednesday, December 31. Factors contributing to the climbing prices included cold winter weather prevailing throughout most of the Lower 48 States, and the increased crude oil prices.

 

 

More Doom Ahead?

Here's an article by Nouriel Roubini.

Last year's worst-case scenarios came true. The global financial pandemic that I and others had warned about is now upon us. But we are still only in the early stages of this crisis. My predictions for the coming year, unfortunately, are even more dire: The bubbles, and there were many, have only begun to burst.

The prevailing conventional wisdom holds that prices of many risky financial assets have fallen so much that we are at the bottom. Although it's true that these assets have fallen sharply from their peaks of late 2007, they will likely fall further still. In the next few months, the macroeconomic news in the United States and around the world will be much worse than most expect. Corporate earnings reports will shock any equity analysts who are still deluding themselves that the economic contraction will be mild and short.

Severe vulnerabilities remain in financial markets: a credit crunch that will get worse before it gets any better; deleveraging that continues as hedge funds and other leveraged players are forced to sell assets into illiquid and distressed markets, thus leading to cascading falls in asset prices, margin calls, and further deleveraging; other financial institutions going bust; a few emerging-market economies entering a full-blown financial crisis, and some at risk of defaulting on their sovereign debt.

We're on the air every Friday.

Tim Wood, John Grant and I are back in our weekly session on the markets. The market has been a real roller coaster ride this week. You will be able to access the interview by clicking here .

New IPTV program going strong.

This week's show on www.yorba.tv is packed with information about the direction of the markets. I'm on every Tuesday at 4:00 pm EDT . You can find the archives of my latest programs by clicking here .

Please make an appointment to discuss our investment strategies by calling Claire or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .

Anthony M. Cherniawski,
President and CIO
http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules