In short: Things look promising, but hey, you never know.

People are angry, Trust me, I could tell.

While more and more media outlets may declare that the recession is over, do you agree with that statement? Even if you believe the assertion to be true, do you fear that we may be in for a “double dip recession,” or fear that it may be difficult for the government to create jobs and boost income without triggering inflation?

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“I don’t know when the term “pink slip” originated. The term is at least a century old. It refers to a “you’re fired” notice.

The American economy shows no signs of reversing its relentless increase in the rate of unemployment. Jobs are disappearing at a rate not seen since the 1981–82 recession.

Companies continue to cut costs by laying off workers. This is the main source of the increase in corporate earnings – not increased output, but decreased output. How is this profitable? Because of increased output per surviving worker. In the midst of recession, businesses are learning how to cut costs. Labor in most businesses is the #1 cost. Cut labor, and you cut costs faster than by cutting anything else.

Workers see what is happening. They are working harder because they are facing pink slips.

To understand how bad things are today, and how much worse they are likely to get, we need to survey some ancient history.

(snippet)
WHAT WE CAN EXPECT

The economy is not in recovery mode. The best news that the media can present is that the rate of contraction is slowing.

There is no good news on the unemployment front. The rate keeps climbing. The statisticians have this hope: the job market will get so bad that workers presently looking for jobs will drop out. If they stop looking for jobs, they are removed from the unemployment statistics. Unemployment refers to people out of work who are looking for jobs. So, when someone drops out of the job market, he lowers the rate of unemployment. If enough people quit looking, the statistic looks better.

Then there is the underemployment factor. This is getting some attention, but not enough. Businesses have cut workers’ hours. They don’t want to lose workers, since there are costs of firing, such as an increase in the firms’ state unemployment insurance rate. There might even be a lawsuit for discrimination.”

http://thecomingdepression.blogspot.com/2009/08/unemployment-is-new-recovery.html

The only difference between 2009 and 1929 is the wealthy walked away with a profit and laughing at us all. All average Americans have lost something and some their entire future. The FEDS think they can get away with it and we are letting them. Vote your conscience in 2010. Vote the incumbent and professional politician out. They are only concerned about perpetuating their stay in Washington and the heck with your welfare and concerns.

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“The Fed’s language shows it believes the economy is stabilizing, and that the worst is certainly over. Today on the Buzz and Banter, Mr. Practical gave his thoughts on the state of the economy.

* “Libor markets have returned to normal (we are guaranteeing this market).

* “Swap spreads have returned to normal (we are guaranteeing this market).

* “Housing starts and prices have stabilized (the US government is providing 15% tax credits, effectively paying the down payment for first time home buyers).

* “Car sales are seeing signs of life (the US government is providing cash for clunkers).

* “The US economy has stabilized because the US government has effectively become almost half of the US economy. But stimulus has been shown to have a zero multiplier: stimulus comes from either borrowing or transferring wealth from taxpayers, so every dollar eventually is taken back. Tax increases tend to have a minus 3 multiplier: tax increases eventually reduce growth by three times the increase.

* “”Green shoots” will wither away very quickly as the US government has effectively become a very large part of the economy. That is temporary. Without the ability to generate more credit, growth will turn negative. “

Mr. Practical made some great points. That being said, investors are still taking the market higher here. For the day, the S&P 500 closed higher by 1.15%, to 1005, off the day’s high of 1012. I would note that the majority of the market’s move came during the first hour of trading; post-FOMC, it was chop-and-slop.

One thing that stuck out to me about today’s session was the leaders of today’s rally lead the initial rally months back, Goldman Sachs (GS), Apple (AAPL), Amazon (AMZN) all had strong days. Could be something, could be nothing but another leg would fit with the Head and Shoulders pattern discussed last night.

As for tomorrow it will be a data dependent as the Export Prices, Import Price, Initial Jobless Claims, Retail Sales and Business Inventories are all reported before 10:00 am. Wal-Mart (WMT) also reports earnings before the bell.

I’m beat, have a great night!
”
Source
http://www.minyanville.com/articles/AAPL-GS-WMT-AMZN/index/a/24024

Related Posts:

• If there is a second downturn like in the Great Depression it will be a doosey.
• Economic crash: Dig into recession again as umemployment rate already hit 20%!
• Why the market should go up on this encouraging data
• The DEPRESSION.
• News from the UK 03/11/2010. Banks are preparing for a double dip recession.

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