Really, should it be a surprise to anyone when this market crashes again?

Let’s see:

1) 3.5% GDP was garbage all supported by cash for clunkers(over 1.6% of grth for auto’s), housing expenditure as a result of $8,000 first home owner rebate, excessive govt. spending, restocking and implicit price deflator halved eventhough core inflation has not dropped. If the GDP was real there would have been jobs growth, anyone seen any jobs growth?

2) So called better than expected earnings is a mirage. Many company reports used one off extraordinary gains that have nothing to do with continuing operations and therefore should have been excluded. Examples include, SNDK selling previously written of stock which benefited them by 139 Million and millions of dollars of tax benefits. If you don’t believe me look at SNDK, CAT, UPS and YHOO, QTRLY reports.

3)500,000+ people filing for unemployment benefits weekly. Don’t look at continuing claims fall, the only reason this is going down is because people are moving onto other benefit programs or learning how to beg for spare change on a street corner somewhere.

4) Demand has artificially brought forward from Qtr4 09 and 2010 because of rebate programs such as clash for clunkers.

5) ALT A and Option ARMS start in earnest from middle 2010.

6) China wont’ have as much money going forward to fund US budget deficit because US and European consumers won’t be buying as much of their manufactured products.

7) Commercial real estate is about to implode.

Government manipulating credit markets, this is artificial and can’t last as the rest of the world is starting to raise interest rates due to inflation.

9) US govt. will eventually need to cut spending and raise taxes to fix deficits, this won’t be good for demand or markets but there will be no alternative. Other than crashing dollar or defaulting on debt, if this happens, who would then lend to US?

10) Jobless recovery? only a fool desperate to be parted from his/her money believes in this concept. With unemployment at almost 10% and really at 17% on old measures, the consumer will continue to retrench and deleverage. This is why all the feds interest rate cutting has done nothing to stimulate the economy, only bankers profits. This high unemployment and debt is why the Fed is pushing on a string and cannot get traction.

- Ozrealist

Related Posts:

• Any rise in interest rates will speed up the collapse.
• The UK economy is an accident waiting to happen.
• Forgive me for being a “doomer” but just exactly where do you see growth or recovery?
• The market is calling for a rough 2nd half to 2010.
• The cracks are beginning to widen in the EU experiment:

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