A few minutes ago MarketWatch published an article under the caption ‘Economic Report’ titled ‘Initial Jobless claims fall to 492,000, U.S. data show.  Almost concurrently, Yahoo News reported an article by Tim Paradis, an AP Business Writer titled ‘Stocks edge higher after drop in jobless claims’.  The titles of both article imply a ‘good economic event’ - the second title more strongly than the first.

In fact, when one carefully reads the title of the MarketWatch article and reads the article itself, it becomes obvious that jobless claims did not drop in the week ended December 27, only the number of new jobless claims made in the week then ended dropped from the new jobless claims in the week ended December 20.  At the same time the detail in the article stated that the:

• number of people collecting benefits rose by 140,000 to 4.51 million in the week ended December 20, the highest level since December, 1982;
• 4 week average of continuing claims grew in the week ended December 20 by 103,750 to 4.42 million, again the highest level since December, 1982;
• insured unemployment rate rost to 3.4% from 3.3% in the prior week, the highest level since November, 1983; and,
• 533,000 nonfarm payroll jobs were lost in November, the most for a single month since 1974.

I would have thought that was all very bad news.  Accordingly, it seems to me the title of the AP article is either ill-conceived, or just plain misleading.

In any event, Paradis attributed an increase of 18 points in the Dow Futures, which had been flat, to this jobless news item.  Assuming his assumption is a good one, which as amazing as that seems it might be, what is there to say except ‘more of the same’ from the Wall Street Sages.

Comments as to what readers think about the foregoing will be appreciated.

The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. See Legal Disclaimer.

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This morning Yahoo News published a Reuters Article titled:  ‘Paulson says U.S. lacked tools to tackle crisis: report’.  In this article Paulson is quoted as having said (apparently yesterday in Singapore):

• he was surprised by the ferocity of the (financial) crisis but believe he grasped from August how severe it was;
• we have been for some time in the frustrating situation of understanding much more than the public or even the Congress understood in terms of the magnitude of what we are facing; and,
• with respect to his successors “They have got a great team and they don’t need advice.  I really believe that.”

That he grasped in ‘August’ how severe the financial crisis was comes as no great surprise to me.  I said in posts in August and September that the fact of bail-out programs being introduced during the Presidential election campaign was a clear signal that the problems were far greater than the public then was being told or understood.

That the Congress was asked to pass legislation in circumstances where Paulson thought it did not understand the magnitude of the problems being faced speaks either to:

• ineffective communication on the part of Paulson and his team; or,
• an inability or unwillingness of U.S. senior elected representatives to grasp the magnitude of the problems when they passed the Bail-Out Bill.

In either case this does not auger well going forward from here.

To suggest the successor ‘team’ doesn’t need advice strikes me as either being a misquote, an incomplete quote, or just patent nonsense.  I can’t believe Paulson and his group will not give the best advice they can to the successor group based on the knowledge they have gained over the past few months.  For Paulson and his group to do otherwise (i.e. not convey whatever knowledge they have gained over the past few months and make recommendations based on that knowledge) is simply not how intelligent people behave, and again would not auger well going forward from here.

Comments as to what readers think about the foregoing will be appreciated.

The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. See Legal Disclaimer.

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Today it was reported that the U.S. Consumer Confidence Index fell to a record low of 38.0 in December from 44.7 in November, that the U.S. holiday shopping season has been the worst since at least 1970, and that U.S. single-family home prices fell a record 18.0% in October from a year earlier (see Yahoo News - ‘Consumer confidence and home prices hit grim records’ posted at approximately noon Eastern time).  62 economists had forecast a range of consumer confidence from 40.0 to 51.1.

The U.S. Government announced a $6.0 billion support program for GMAC - as a practical matter putting the U.S. National Debt potentially a further $6.0 billion in the hole.

The U.S. Consumer in recent years has accounted for approximately 70% of U.S. GDP.  The U.S. Consumer is not spending now.  What does this mean to U.S. Government tax revenues - presumably nothing good.

One would have every reason to believe that all the smart people on Wall Street would know the foregoing numbers and the likely consequences of them, yet as I write this at 2:15 p.m. the Dow is today up 119 points or 1.4% (now at 4:00 p.m. up 186 points or 2.2%).  I must be missing something.  Why would the Dow go up in the attendant circumstances?

If you have thoughts on this, please share them by commenting on this Post.

The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. See Legal Disclaimer.

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It has now been about a month since I posted a comment on the economy or economic condition on this Blog.  Mostly, that has to do with the fact that I don’t have an ego-need to post – and if I had commented on most of what has been going on I would have fallen into the typical ‘commentator trap’ of simply having repeated what I said before – albeit differently.

I am now posting because of today’s various disclosures (most recently moments ago ‘Lou Dobbs CCN show

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This is the 11th in a series of 11 Posts that will be published on this Blog. All 11 Posts are filed under the Blog Category ‘Gold as an Investment’ and can be accessed by clicking here. We hope you find this Post Series useful.

While preparing this Post Series, I found two recently published books I think particularly helpful: The Goldwatcher: Demystifying Gold Investing, John Katz & Frank Holmes, 2008, John Wiley & Sons, Ltd. and Guide to Investing in Gold and Silver, Michael Maloney, 2008, Hachette Book Group USA. I highly recommend both. Where I have adopted ideas from those books, I have put them in italics. Page references to The Goldwatcher and Guide to Investing in Gold and Silver are denoted by (Goldwatcher – page xx) and (Guide – page xx) respectively. I also recommend www.theGoldwatcher.com Blog and www.GoldSilver.com, websites related to those respective books, to those of you interested in gold. Subsequently I found a 3rd recently published book, Buy Gold Now, Shayne McGuire, 2008, John Wiley & Sons, Ltd. Like the other two, Buy Gold Now is available at Amazon.com. Again, I recommend this book to you. Page references to Buy Gold Now are denoted by (Buy Gold Now – page xx).

General Conclusions

My reasoning behind my conclusions with respect to Gold as an Investment are set out in this Post Series. Succinctly, they can be summarized as follows:

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This is the 10th in a series of 11 Posts that will be published on this Blog each Monday and Wednesday from November 3 to December 8.  All 11 Posts will be filed under the Blog Category ‘Gold as an Investment’.  For previously issued Posts in this Series click here.  We hope you find this series of Posts useful.

While preparing this Post Series, I found two recently published books I think particularly helpful:  The Goldwatcher:  Demystifying Gold Investing, John Katz & Frank Holmes, 2008, John Wiley & Sons, Ltd. and Guide to Investing in Gold and Silver, Michael Maloney, 2008, Hachette Book Group USA.  I highly recommend both.  Where I have adopted ideas from those books, I have put them in italics.  Page references to The Goldwatcher and Guide to Investing in Gold and Silver are denoted by (Goldwatcher – page xx) and (Guide – page xx) respectively.  I also recommend www.theGoldwatcher.com Blog and www.GoldSilver.com, websites related to those respective books, to those of you interested in gold. Subsequently I found a 3rd recently published book, Buy Gold Now, Shayne McGuire, 2008, John Wiley & Sons, Ltd.  Like the other two, Buy Gold Now is available at Amazon.com.  Again, I recommend this book to you. Page references to Buy Gold Now are denoted by (Buy Gold Now – page xx).

General Conclusions

My reasoning behind my conclusions with respect to Gold as an Investment are set out in this Post Series.  Succinctly, they can be summarized as follows:
Continue Reading »

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This is the 9th in a series of 11 Posts that will be published on this Blog each Monday and Wednesday from November 3 to December 8. All 11 Posts will be filed under the Blog Category ‘Gold as an Investment’. For previously issued Posts in this Series click here. We hope you find this series of Posts useful.

While preparing this Post Series, I found two recently published books I think particularly helpful: The Goldwatcher: Demystifying Gold Investing, John Katz & Frank Holmes, 2008, John Wiley & Sons, Ltd. and Guide to Investing in Gold and Silver, Michael Maloney, 2008, Hachette Book Group USA. I highly recommend both. Where I have adopted ideas from those books, I have put them in italics. Page references to The Goldwatcher and Guide to Investing in Gold and Silver are denoted by (Goldwatcher – page xx) and (Guide – page xx) respectively. I also recommend www.theGoldwatcher.com Blog and www.GoldSilver.com, websites related to those respective books, to those of you interested in gold. Subsequently I found a 3rd recently published book, Buy Gold Now, Shayne McGuire, 2008, John Wiley & Sons, Ltd. Like the other two, Buy Gold Now is available at Amazon.com. Again, I recommend this book to you. Page references to Buy Gold Now are denoted by (Buy Gold Now – page xx).

General Conclusions

My reasoning behind my conclusions with respect to Gold as an Investment are set out in this Post Series. Succinctly, they can be summarized as follows:
Continue Reading »

Email this Post to a Friend.