Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

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