'09 Q3 SHORT-TERM SENTIMENTS

[rffrydr]

Short View: Great Recession

By John Authers, Investment editor

Published: June 25 2009 20:26 | Last updated: June 25 2009 20:26

After deep confusion, elements of agreement are emerging. Official economists and investors in different countries that have been affected in different ways by the crisis agree on some points.

Wednesday’s economic forecast from the Organisation for Economic Co-operation and Development expressed the emerging orthodoxy as well as any.

Anyone reading a year ago what the OECD had to say would have been horrified. It said the nadir for the developed world had not been reached and a recovery would be so weak that unemployment in the US and western Europe would exceed 10 per cent and stay there.

Yet anyone reading it during the worst months of the crisis late last year would have been relieved. The OECD is arguing that a Great Depression induced by a banking collapse has been averted; we will have a Great Recession instead.

The OECD said that extremely aggressive policy centred on cheap money should stay in force. Only a few weeks ago, this was contentious; now it is accepted.

A disparate group of central banks with different priorities seem to agree. The US Federal Reserve this week refused to offer any guidance on when it would exit from its loose monetary policy; the European Central Bank added liquidity to money markets much more aggressively than had been expected; and it seems the Swiss National Bank pushed down its own currency.

So there is the consensus: disaster averted, no strong recovery as the developed world relies on China for its growth, and no quick end to extreme policy measures.

This consensus is consistent with another consensus, that the nadir for share prices in March was “the” bottom. If the consensus is right, the March bottom should hold. Let us hope it is right.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Way ahead of you:

http://www.bloomberg.com/apps/news?pid=20601109&sid=akCaYx29BrI8

Beware that other "debt trap": debt is not immutable. Though a mortgage on an underwater house wears like mill stone, it doesn't have to be a tombstone. In the end, a mortgage is just a contract and, like all business, contracts are made to be rewritten.
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Today is the Tomorrow you worried about Yesterday!

[goldbug]

With these debt levels, the American consumer, who does not produce as much as he consumes, cannot recover. Going further and further into debt abyss everyday. Things are not getting better. They are getting worse at a great pace. We need to pay off debt and use savings for productive capacity growth. Not for granite countertops.

[rffrydr]

Not enough. The ol' "sell on news" -cept this really, really wasn't priced in. Just when we stick our heads up good ol' RBS has to come along and smack us down.

http://www.ft.com/cms/s/aeb960ee-8317-11de-a24e-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Faeb960ee-8317-11de-a24e-00144feabdc0.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus

They "see" no recovery until 2011 and look for their investment bank to languish. I expect we'll overcome this and build strength over the next couple of days but next week is that wacky week before expiration with alot of call writers hanging their asses out.

Bigger picture, the chase is on and 10,000 beckons.
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Both the stock market and the US dollar likes this:
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Job losses slow to 247,000; jobless rate dips
Employers cut just 247,000 jobs in July; jobless rate dips, strong signal recession ending
By Jeannine Aversa, AP Economics Writer
On Friday August 7, 2009, 8:48 am EDT

WASHINGTON (AP) -- Employers throttled back on layoffs in July, cutting just 247,000 jobs, the fewest in a year, and the unemployment rate dipped to 9.4 percent, its first decline in 15 months.

It was a better-than-expected showing that offered a strong signal that the recession is finally ending.

The new snapshot, released by the Labor Department on Friday, also offered other encouraging news: workers' hours nudged up after sinking to a record low in June, and paychecks grew after having fallen or flat lined in some cases.

To be sure, the report still indicates that the jobs market is on shaky ground. But the new figures were better than many analysts were expecting and offered welcomed improvements to a part of the economy that has been clobbered by the recession.

Analysts were forecasting job losses to slow to around 320,000 and the unemployment rate to tick up to 9.6 percent.

The dip in the unemployment rate -- from June's 9.5 percent -- was the first since April 2008. One of the reasons the rate went down, however, was because hundreds of thousands of people left the labor force. Fewer people, though, did report being unemployed.

All told, there were 14.5 million out of work in July.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included the unemployment rate would have been 16.3 percent in July. That's down from 16.5 percent in June, which was the the highest on records dating to 1994.

Since the recession began in December 2007, the economy has lost a net total of 6.7 million jobs.

Also heartening: job losses in May and June turned out to be less than previously reported. Employers sliced 303,000 positions in May, versus 322,000 previously logged. And, they cut 443,000 in June, compared with an earlier estimate of 467,000.

The job cuts made in July were the fewest since August 2008.

The slowdown in layoffs in part reflected fewer jobs cuts in manufacturing, construction, professional and business services and financial activities -- areas that have been hard hit by the collapse of the housing market and the financial crisis. Retailers, however, cut more jobs in July.

Those losses were blunted by job gains in government, education and health services, and in leisure and hospitality.

Still, the worst of the job cuts have passed.

The deepest job cuts of the recession came in January, when 741,000 job disappeared, the most in any month since 1949.

Slower job losses are occuring because companies aren't cutting investment and spending as drastically as they had been during the depths of the recession which came in the final quarter of last year and carried over into the first quarter of this year.

With companies feeling a bit better about the economy's prospects and their own, they boosted workers' hours in July. The average work week rose to 33.1 hours, after having fallen to 33 hours in June, the lowest on records dating to 1964.

And, employers bumped up wages. Average hourly earnings rose to $18.56 in July, up from $18.53 in June. Hourly earnings were stagnant in June. Average weekly earnings, which fell in June, rose to $614.34.

Other recent barometers have shown some improvements in manufacturing, housing and construction activity.

The government reported last week that the economy shrank at a pace of just 1 percent from April-to-June, the strongest signal yet that the recession may be ending.

Many analysts predict the economy could start growing again in the current July-to-September quarter. And, the Fed recently observed that the economy is finally showing signs of stabilizing in some regions of the country -- especially in parts of the Northeast and Midwest -- bolstering hopes of a broader-based recovery this year.

[rffrydr]

Insana has gone to cash today:

http://www.thestreet.com/story/10561422/1/insana-a-global-melt-up.html?puc=_tscrss

A bit early considering none of his republican friends is even in yet.
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Today is the Tomorrow you worried about Yesterday!

[nodoodahs]

[rffrydr]

If the Senate comes through this week look for a head-busting 16million SAR for August. Nissan is up 7% tonight with the release of its electric and Ford making the bizarre roadtrip from 1 to 9 (tomorrow, I predict).

If it's one thing we know, cars cut across the economy and put us on an outlook far different than cost-cutting productivity yield-spread rally we've been on. Unlike houses, cars always take their owners back to the showroom. New twist on "cost-push"
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Morningstar now looking for higher-than-expected GDP growth for the 2nd half of the year:

http://news.morningstar.com/articlenet/article.aspx?id=302122#

[rffrydr]

"Cash-for-clunkers" sells out in a couple of weeks, 250000 cars.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Shaking off china contraction will put the ball back in the home court--the bull too.

From the broker:

[rffrydr]

Brother Frank has come around to our way of thinking:

http://financialsense.com/Market/barbera/2009/0728.html
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

The vomit flowed up this last quarter: to take that kind of credit/currency imbalance and wipe the M&A off the map and still come out of the hole like russia did..... But we forget that for all their inefficiencies and blatant thievery Russia is the Saudi Arabia for the rest "of us." They rival the production capacity and willingly lean against cycle.

The great gas blackmail was doomed to fail: either high or low prices guaranteed that.
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Today is the Tomorrow you worried about Yesterday!

[nodoodahs]

[rffrydr]

Yeah poor Russia. We finally have crude going down and markets going up!

http://ftalphaville.ft.com/blog/2009/07/13/61601/whats-really-moving-the-energy-markets/