Correction coming...

[AlterEgo]

When you have good news and the market doesn't react, or reacts negatively, that's signaling the market is overbought and we're due for a correction. Today seems to be that signaling day... it will be interesting to see how we finish August.

N.

[TheHipHopBillGates]

and for your next trick are you going to walk on water? anyone who took an econ 101 class could have told you that the rally the last couple months was unsubstiatied. there are still serious long-term economic problems that need to be fixed.

[jameznyhc]

When you have good news and the market doesn't react, or reacts negatively, that's signaling the market is overbought and we're due for a correction. Today seems to be that signaling day... it will be interesting to see how we finish August.

N.

um sorry a correction would have occurred if we let the free markets sink the crooks instead of rewarding theivery ...Like Mike said .. be prepared for double dip recession and stagflation .. as a dollar keeps weaking by the day .. stimulus was also a complete failure govt cant even create fuckin jobs and grow when it wants to ..

You cant have a true corrections by proppin up failed companies holding worthless mortgages that will below the cost by next year.. we got a long way to go

[AlterEgo]

I'm not calling for some massing 400pt decline in the S&P folks... I'm just talking about a bull market correction, not a turn to the bear market.

And HHBG, I think you're wrong. Market is 6 - 9 months forward looking and right now it has a full economic recovery within sight. On top of that inflows to hedge and mutual funds are back at pre credit crunch levels, boosting raw demand for debt and equity which is going to drive the market up well into an actual fundamental recovery.

N.

[TheHipHopBillGates]

I'm not calling for some massing 400pt decline in the S&P folks... I'm just talking about a bull market correction, not a turn to the bear market.

And HHBG, I think you're wrong. Market is 6 - 9 months forward looking and right now it has a full economic recovery within sight. On top of that inflows to hedge and mutual funds are back at pre credit crunch levels, boosting raw demand for debt and equity which is going to drive the market up well into an actual fundamental recovery.

N.

there maybe an end of a recession, but I don't think we'll see what we've seen historically as a recovery. With lack of job creation and the fact that by the end of 2010 50% of home owners underwater consumer spending won't be large enough the support substantial growth, in fact the only reason there will be growth is because the contraction was so severe. It maybe years before we get back to previous job levels, and that equity will never be replaced, even with the rampant money production. And bc of the printing if we do job creation and recovery we will also see hyper inflation bc of the artifically low rates.

LOL @ demand & equity, save your funadmental explanations for a fundamental recessed market, because its clear the problems we face aren't the typical cycliar causes.

[AlterEgo]

LOL @ demand & equity, save your funadmental explanations for a fundamental recessed market, because its clear the problems we face aren't the typical cycliar causes.

LOL @ I guess you don't really have any idea what you're talking about. The entire market dislocation that we've seen over the past two years is a result of supply & demand imbalance. When hedge funds started getting margin calls in the summer of 2007 b/c of the declining value of CDOs packed with subprime mortgages they began selling off "good assets", pushing down the prices of equities and bonds (this was a supply and demand issue, not fundamental declines in the value of the good assets). The cycle became vicious because as all asset classes began to experience overselling by the hedge funds assets prices across the board dropped due to continued margin calls, continued selling of assets to meet these calls and then eventually massive redemptions which required liquidations of portfolios. The fundamental decline in valuations didn't come until May / June of 2008 when the early signs / effects of the recession began.

N.

[TheHipHopBillGates]

LOL @ I guess you don't really have any idea what you're talking about. The entire market dislocation that we've seen over the past two years is a result of supply & demand imbalance. When hedge funds started getting margin calls in the summer of 2007 b/c of the declining value of CDOs packed with subprime mortgages they began selling off "good assets", pushing down the prices of equities and bonds (this was a supply and demand issue, not fundamental declines in the value of the good assets). The cycle became vicious because as all asset classes began to experience overselling by the hedge funds assets prices across the board dropped due to continued margin calls, continued selling of assets to meet these calls and then eventually massive redemptions which required liquidations of portfolios. The fundamental decline in valuations didn't come until May / June of 2008 when the early signs / effects of the recession began.

N.

lol paging Gordon Gecko.....sure hedge fund commodity speculation sped up the process last summer but our current economic problems go back MUCH MUCH farther then that, I mean honestly you could start with the early 70's and the collapse of Bretton Woods, the late 70's to early 90s transition from pensions to 401ks, NAFTA in the early 90s, but I'll go with March 2000 when Greenspan jumped the gun on inflation so I don't lose you, obviously what happend with that and 9/11 was the long period of artificially low interest rates there was a huge transition of capital from "asset classes" and lots and lots of easy credit and debt accumulation, and the rampant consumer spending that led to that recovery isn't possible this time because people just dont have the disposable income, not to mention all that equity is being washed away, 24% of homeowners are underwater right now, and 32% have no equity whatsoever, and by YE 10 50% are projected to be underwater, now how much spending do you think these people are going to be doing, and how much do you think housing is going to rebound when we have more waves of foreclosures hitting the market? Not to mention we're going to face a new problem in the next 6 months of people's unemployment benefits expiring, and what do you think they're going to be spending, HUD??? you are aware that consumer spending is still 2/3 of GDP? And when there are no jobs and people are hemmoraging equity, they're not spending. Don't be so naive to buy everything piece of good news the media feeds you, so what Consumer Confidence is a little better, so what new housing starts are up 9.6% in July it's comparative, when you have record lows anything is +%, when there are no housing new starts and you build one house you have a 100%.

Like I said before, there maybe end of a recession after Q3(since Q2 still had a 1% contraction) but it will only be very small growth AND not like a normal cycular economic recovery. There maybe rallies like there has been the last few months but the longer we go without significant recovery the more correction we'll have of those rallies. But if you'd like to bring our rampant spending/money production, growing deficit, collapsing infrastructure, Medicare/SS, or god forbid universal healthcare into the convo......please by all means......

People should just get used to a lower standard of living, one less plasma tv, a hyundai instead of a beamer, a little less bling bling, a savings account instead of cc's and try to be better, less selfish human beings/family members so that we don't continue to strip our children's future of opportunities.

[TheHipHopBillGates]

Laid-off workers eye the abyss

With 1.5 million set to lose jobless benefits, many don't know how they'll get by

ELKHART, Ind.— Karen Inbody has just about three weeks to figure out Plan B.

The 58-year-old divorcee has been getting by on unemployment compensation since her layoff in early 2008, but she’s nearly reached the end of her benefits.

And even though she's applied for dozens of jobs, the former rental property manager has come up empty.

“I’d shovel horse poop,” she says wearily. “I haven’t even found one of those jobs available.”

Now, like many others whose unemployment benefits are running out, the Elkhart, Ind., native doesn’t know how she’s going to put food on her table and pay her mortgage.

Coming tsunami

Despite repeated extensions of the unemployment compensation program — up to a record 79 weeks in many states, compared to the standard 26 weeks in normal times — some 1.5 million people are expected to exhaust their benefits by year’s end.

In the first big wave, some 540,000 are expected to fall out of the program by the end of September, according to the nonprofit National Employment Law Project.

“Every state is going to experience a substantial increase in people exhausting their benefits,” says Chris Owen, executive director of the Washington, D.C.-based worker advocacy group. “That means more people who will not be able to pay their mortgages, and who will not be able to shop and buy things. It will be a blow for the national economy, and for state and local economies.”

For many in this situation, there are few obvious places to turn. Short of qualifying for another government program, most rely on family and friends, and draw on the help of churches and nonprofits that run food pantries and assist with other emergency needs.

Mowing for gas money

Elkhart resident Tim White, who was laid off from a $10 per hour job at a laminates factory last year, saw his final unemployment check in mid-July.

Now the 42-year-old father earns $25 a week mowing a friend’s lawn — enough to cover gas for his '97 Jeep Cherokee so he can drive around to look for jobs. He says he applies anywhere they are accepting applications – McDonald’s, Jiffy Lube, KFC, or Goodwill — to name just a few.
"I don't care if it's a minimum wage job,” he says. “It's better than nothing.”

For lodging, White and his wife, Prima, and their 13-year-old daughter, Kelly, have been getting by with the help of a relative who lets them live rent-free. The family also started receiving food stamps worth about $300 a month in August.

White’s wife is in poor health and takes medications for high blood pressure, diabetes and other problems. He is tormented by the prospect she could have a medical emergency with no health insurance.

"Health care coverage we worry about every day," he said.

Food pantry

Dean Preheim-Bartel, executive director of Church Community Services, which operates one of the larger food pantries in Elkhart, says he’s been seeing more and more people who have exhausted their unemployment benefits. It is one of the reasons, he believes, that in July, a record 345 new clients showed up to get free provisions for their families, compared to 179 new clients in July last year ago.

“There are a lot of people who are first timers who will readily acknowledge they have never been to a place like this -- never been to a food pantry of any kind,” he says.

Once laid-off workers exhaust their unemployment benefits, other sources of government assistance are relatively scant. TANF, Temporary Assistance for Needy Families, is available to very low-income or unemployed people with children. But the requirements are far stricter than those for unemployment compensation.

“You have to have very low wealth to get TANF benefits. So it’s not practical thing for most middle-class families,” says Gary Burtless, an economist at the Brookings Institution.

Childless people have even fewer options.

“If you have no kids, then you’re at the tender mercy of whatever state program there is,” says Burtless. “In a lot of places, it’s just not very much money, and they can deny people benefits for a lot of reasons.”

Likewise, food stamps are generally available only to the poorest of the poor.

Handywoman

Becky Cutter, who lives in rural Elkhart County, received her final unemployment payout on June 28. She was laid off in February 2008 from her job at Stallion Coach, a small company in nearby Bristol that converts horse trailers into living quarters.

Her unemployment checks were modest — an average of $182.50 a week after taxes — but they kept her afloat for 15 months while she looked for a new job. She says she applied for dozens of positions in customer service, restaurant management, waiting tables, even as a speedway manager — and was amazed when nothing panned out.
Now, she tries to maintain a can-do spirit and accepts whatever small jobs come her way.

“Basically, I’ve turned into a handywoman,” she says, picking up $25 here and $100 there doing everything from painting and cleaning rain gutters to dog grooming. “I’ve been amazed at the things I can do. I’ve learned to drive a scissor lift and got over my fear of heights.”

Cutter is fortunate that her landlord has agreed to let her remain in the farm house where she lives, doing maintenance instead of paying rent. She still has a horse that she says she’ll have to sell to raise a little cash.

In the meantime, it’s a shoestring existence as she continues to send out resumes. Trips to the food pantry and gifts from friends and neighbors have helped fill the gaps.

Positive signs, but few jobs

Despite some recent signs that the unemployment situation is improving, the odds of actually getting a new job are grim.

Federal statistics indicate that there were more than five times as many people seeking jobs in the United States in June as there were positions available. In especially hard-hit areas like Elkhart, where the unemployment rate is 16.7 percent — compared to 9.4 percent nationwide — the odds against job seekers are even tougher.

Vicki McGlinsey, who was laid off last year from a printing company that served the RV industry, says she was one of 10 people who made the final round of interviews for a security position offered at Wal-Mart in July. The manager who broke the news that she wouldn’t get the job told her they received more than 250 applications.

“I myself have put in about 100 applications and résumés since February … and have had three interview opportunities, including this one,” she says. “It boggles my mind when I hear people say we just need to try harder.”

To aid people like McGlinsey, political pressure is building for the passage of yet another extension of unemployment benefits, at least for the jobless in states hardest hit by the recession.

In early August, just before Congress left for a break, Rep. Jim McDermott, D-Wash., introduced a bill that would provide another 13 weeks of federally funded unemployment benefits to workers in states with a three-month jobless rate over 9.5 percent — likely encompassing about 20 states.

The bill is expected to be taken up when Congress returns after Labor Day.

Opponents of an extension argue that increasing the benefit duration will simply prolong unemployment, allowing workers to get “rusty,” possibly unemployable. Those in favor maintain that the help is essential to these individuals until the employment picture improves and that the jobless funds help stimulate the economy.

Weighing options

With the clock running out on her benefits, Karen Inbody is weighing her options.

She’s already borrowed some money from her family, and does not want to ask for more — two of her sons are receiving unemployment benefits after being laid-off from the RV industry, and two are working reduced hours.

Inbody owes $600 a month on her house, a simple gray bungalow on Elkhart’s historic Bank Street. She fears that without some new source of income, she will lose it.

“Sell my house, rent out my house?” she says, running through some scenarios. She adds wryly: “I could stand on a street corner, but those are all taken too.”

Laid-off workers eye the abyss - The Elkhart Project- msnbc.com

[eL FryEdo]

scary

[Gspot555]

sick prediction...get in line with the 30000000 that already said that...

you are just watching a bull cyclical move inside an overall bear secular cycle, IMO

[TheHipHopBillGates]

sick prediction...get in line with the 30000000 that already said that...

you are just watching a bull cyclical move inside an overall bear secular cycle, IMO

exactly. like james said above, it could be possible we have a double dip recession and you ll always have runs like this. a lot more risk but also this is where the real $ is made, it'll just be made by less people now.

[keemac]

Cut your September historical standard deviation to half and strike the S&P put contract 5 points lower. You'll have a strong valuation position by Sept expiry...

[Fat Man D]

it'll correct in Oct/Nov is my guess but it won't hit the march lows.....unless it doesn't correct in which case another ugly bubble will have formed.....ride the waves people, short oil ETFs were up ~10% today. short the bear market rallies yo....