More Weak Economic Data, A Missed Opportunity, & Some Politics

Economy

More jobs were lost last month as reported Friday morning.  The number was 84,000.  And the big number was the fact the unemployment rate is now at 6.1%.  I bring this up because I’ve posted on my blog a few times that there’s a lot of economic numbers that really don’t help us make money in the stock market.  The unemployment rate does though.  It’s very correlated with the stock market.  the higher this number, the lower the market goes (see picture in previous blog entries).  And The problem is I don’t think the unemployment rate is necessarily done going up.

I have been pointing out that the economy will continue to weaken based on my work.  So these bad economic numbers that we’re seeing don’t surprise me.  They will continue for some time.  When you see a good number like we saw with the GDP a couple of weeks ago, you have to scratch your head.  That was due to the temporary shot in the arm by the stimulus checks.  That’s behind us.

Here’s the important thing to remember though.  The stock market will start to go up before the economy gets better.  That always happen and it’ll happen again.  But, our LEADING economic indicators are still going down.  Those are usually pretty correlated with the market.

Opportunity Missed

The fear spiked big time Thursday.  There was a golden opportunity missed Friday for us that are holding a good deal of cash & shorts.  Thursday, we saw one of those real panic days.  The Dow went down about 360 points and almost all of the volume was down volume.  Then, Friday morning were down about 130 points on the Dow and you could just feel it was going to fall hard the rest of the day.  But, then we rallied back to finish up.  Perhaps it was investors who were short all week covering their shorts.  Who knows.

Here’s what we want.  We want everyone to give up on stocks.  They didn’t.  Some bought them back today.  We need that washout to get a real meaningful rally.  Opportunity missed.  We don’t have to have it.  But, almost every bear market ends the same.  Panic selling.  Several really big down days in a row and then immediately it’s met with panic buying because stocks are just too cheap.  The sooner we get the weak hands out of the market, the sooner we get into a new bull market.

Politics

I think John McCain missed an opportunity Thursday night with his speech.  Obviously following that unbelievable speech the night before from Sarah Palin, it would have been hard for McCain to top that.  But, there were some things he did very well and some good points.  But, here’s where I think he missed an opportunity.  I think if McCain keeps touting ‘I’m experienced and he’s not’, he’ll lose.  Obviously nobody cares about experience, they nominated Obama and even McCain picked someone with not that much experience.  So, forget about that.  Also, 9/11 was a long time ago to most Americans and I think we are spoiled that we haven’t had an attack since then.  But, they don’t think about 9/11 on a daily basis.  So, he needs to talk about protecting us.

But, the main thing he needs to concentrate on is the economy, gas prices, and jobs.  This 6.1% unemployment rate will be brought up from here until the election by the Democrats and the media.  It’s rising and doesn’t look like it’s turning around any time soon.  He needs to articulate why we have this economic situation and what he’s going to do to help turn it around.  He hasn’t done that so far.  This is what voters are thinking about.  Not experience and not terrorists.

When I say he missed an opportunity.  Here’s what I mean.  We heard Obama promise us the moon.  Cheap healthcare for everyone, a great education for every kid, no energy dependence in 10 years.  All of that is what I want too.  But, it’s not realistic.  Senator Obama talked about using solar, wind, natural gas, coal, etc.  I think when the average American hears all those solutions and it sounds like too much.  I doesn’t sound real.  I think McCain could have used Obama’s laundry list of energy solutions and picked out maybe coal, wind, & natural gas.  He could have told the American public a few stats.  He could have told them something us on http://www.karleggerss.com already know.  We’re the Saudi Arabia of coal.  We have the best wind corridor in the world.  We have a ton of natural gas that is cheaper than using oil.  But, instead, he gave the same laundry list of every energy possibility out there.  It’s not believable.  The average American needs to be educated on some of these things.

Now, I interviewed Scott Bleier yesterday on The MoneyMan Report and he kindly disagreed with me.  He said that McCain’s speech was right on and he showed why he deserves to be president.  He also stated that McCain will have plenty of time to state his case on how he wants to fix the economy in speeches and in debates.  Perhaps.  But, with more viewers than Palin & Obama with 4 less networks covering his speech than Obama’s, his opportunity was Thursday night.

Fannie & Freddie

Treasury Secretary Hank Paulson & Fed Chairman Ben Bernanke are meeting with Fannie & Freddie officials this weekend to try and strike a deal.  Friday evening, both of those stocks were down about 30% after hours.  Many feel the government will bail out the companies’ debt but leave the stockholders with nothing.  That’s probably true.  We’ll see if a meeting is struck if the market likes this.  Financials rallied Friday on rumors this meeting would take place.

I’m going to relax with a little Cowboys football.  Have a nice weekend.

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2 Responses to “More Weak Economic Data, A Missed Opportunity, & Some Politics”


  1. 1 sandrar September 10, 2009 at 7:46 am

    Hi! I was surfing and found your blog post… nice! I love your blog. 🙂 Cheers! Sandra. R.


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