Market review

So Continuing Claims are down a bit today and the Weekly Job Claims are down a little over 8,000 but you would think by the commentary on CNBC this morning that everything was turning for the better and we are almost at a point where we are coming out of the recession. Bah, humbug! You can't believe that hype really, can you? I surely don't. Look folks, let's face it, many are on vacation and things are slow in business this summer, including layoffs. Restaurants might be surviving based upon summer vacation visitors and many stylists might be getting some business because people wanted their hair done before their vacation. But I tell you things are no better out there and this Fall, which by the way is only 2 months away, is going to bring back more unemployment. Don't be lulled by complacency that things are truly better, by just buying into an overbought market. You will surely be disappointed and lose some capital if you do. Next week they will have the Unemployment report for July and while it currently stands at 9.5% unemployment in June, I expect a creep up for July, maybe to 9.7%.

But remember the Consumer Confidence numbers came out this week and were down from the previous month. June numbers from the Conference Board for Consumer Confidence was 49.3 and in July it was 46.6 and when the economic outlook is good this number is usually over 90 to as high as 120. So most Americans don't see things improving going forward, and are concerned about whether they will have a job or not. Many writers of economic newsletters are wondering about whether there is sufficient capital to truly have a free market right now and they fear it is manipulation that has created this rally. I am concerned about this too. It is in Wall Street's interest and now the Federal Government to have the stock market rise to give us all the confidence that things are getting better and therefore we should trust the stock market with our capital and invest. I would like to share one line of a recent report I have seen and must keep confidential. Here it is: "even if the Chinese lent the U.S. all their $2 trillion, it would only cover this year’s U.S. borrowing. Where is the U.S. going to get next year’s? Because next year, it’s going to need even more. Let me be as clear as possible. There’s no way out of this without major structural changes. It’s not going to be just a disaster. Catastrophe is a better word."

The Put to call ratio is about 0.92 and the VIX closed yesterday at $25.61 and remember what I have said all along: Preserve capital and we will have a major stock market correction sometime before the Options expiration for October. We are still in the range from 7,800 to 9,300 on the Dow and have not gone above that level yet. If you want to try to capitalize on the move up in the market, go for it but have your hand on the trigger to sell. You have to have the time to watch the market to be able to do it though.

China's defective products

Don't be looking anytime soon for our government to resolve these issues, nor to keep us safe from them. Take responsibility yourself and STOP BUYING ANYTHING MADE IN CHINA! if we allow for market forces to work, these problems will be resolved by the Chinese government. We have the levers, so let's use them for our collective well being and to teach the Chinese government and people about free market economies. We could send a signal heard around the world in less than 30 days, if we do this. I am committed to read every product label going forward, are you?

If we do this, as China prepares for the Aug. 8, 2008 opening of the Olympics, the impact will be very significant to their economy. It is the price they need to pay if they want to continue to enjoy Most Favored Nation status with us.

Foreclosures are rising and that is causing stock market concern

Oh sure the economy for the rich is wonderful and growing every day with folks like Halliburton stuffing their pockets with cash from over $2 Billion in overcharged fees and the work not done. The stock market is taking a hit today due in part because of sub prime loans and an increase in foreclosures. It was reported today that foreclosures are now running at 5% of all Home loans. (See news below and link to story). That's a great economy isn't it. We have illegal immigrants working at below the poverty level, taking jobs away from lower income class American citizens just trying to make ends meet. Can't anybody else see what is happening to America. We now have the largest debt we have ever had as a nation and have become a debtor nation under the Bush/Cheney leadership by fear and malfeasance. Remember it was this President who learned everything there was to learn about business by driving his own business into bankruptcy, as he has driven our country. The family was to be saved by the infusion of cash and liquidity by the Saudi Royal family. The Bush's are still beholden to the House of Saud for that. Today we have changed masters and are now beholden to the Chinese instead of the Saudi's, for they are covering our debt.

Here's an excerpt of the story:
"The Mortgage Bankers Association, in its quarterly snapshot of the mortgage market released Tuesday, reported that the percentage of payments that were 30 or more days past due for all loans tracked jumped to 4.95% in the October-to-December quarter.
That marked a sharp rise from the third-quarter's delinquency rate of 4.67% and was the worst showing since the spring of 2003, when the late-payment rate climbed to 4.97%. The association's survey covers 43.5 million loans." Click on this for full story.