Wednesday, November 19, 2008

Job cuts: the vicious cycle

Every business in the nation is trying to cut back on their overhead. The easiest and quickest way to do this is to fire as many employees as possible. These unemployed reduce their expenses by cutting back on shopping and anything they can do without. The vicious circle is on. As consumers cut back, industry suffers and in turn tries to eliminate more employees. This is the death spiral that can lead to depression. I think it's starting to happen.

The quest for physical gold continues. I was told this morning that some dealers are now adding an 80 dollar premium over the gold price for gold coins (if you can find any coins). Yet the hedge funds, who are receiving redemptions, continue to be sellers of "paper gold" (GLD) in order to raise cash, thus holding the price of gold down.

The Selling Pressure Index is at new highs for the bear market, and the Buying Power Index is at new lows. This is obviously a bearish combination.

The primary bear market was re-confirmed today. The direction of the market is to lower levels.

From: DTheory

Thursday, November 06, 2008

Obama and taxing the rich

Welcome to Wall Street, Mr. Obama. What you're seeing is an 915 point down-Dow salute. You say you're going to raise taxes and spread the wealth from the rich to the poor? You're going to be a modern Robin Hood? I don't think the markets are going to like your plan. In fact, I'm damn sure they don't. You see, the markets aren't concerned with racial progress. The markets are interested in possible future prosperity, and they don't give a hoot about a new president who talks about distributing the wealth, assuming that there is any wealth.

Your prize, Mr. Future President is a full minus 8 on my PTI and (gulp) what looks like a second 90% down-day in a row. Wow, talk about a NYSE cheer, you're seeing it, Mr. Obama. And today, the VIX was up 9.12 points to close at 63.68. Ye gads, it looks like tomorrow is going to be a wild one. I thought the market might test the lows, and it looks like it's going to happen.

From: RR