Market outlook for Aug. 5th: Still bound by upper resistance levels!

Initial Jobless Claims rose unexpectedly to 479,000 this week compared to an expectation of 450,000. Continuing Claims came in at 4.537 Million, while expectations were of 4.500 Million. Before the numbers were released the Dow Futures were up 10 points and after the number the Futures were down -28 points with Fair Value up 3 points. The Initial Jobless Claims are at the highest level since April. This should have an impact on the markets and has already on European markets going lower than they were. But you never know in this market whether people will just shrug off the news as they have in the past. Why the market is still as high as it is is still confounding because the data is pointing very strongly that we are in a Deflation period which is accelerating.

The chart of the S&P 500 above shows that on Tuesday we formed a Hammer Pattern. This pattern marks a reverse in the previous trend. While yesterday's closing was not down, today's should be to fulfill the Hammer pattern reversal. Watch the S&P 500 today as it should lead the market over the Dow, which often gives confusing signals, because there aren't many stocks in the Dow Index and fewer stocks can be manipulated more easily.

The chart above from Haver Analytics was last updated on July 29th, so it doesn't include this week's data but as you can see 479,000 is clearly a trend in the wrong direction and alarming to many, especially the long term unemployed, often referred to as the 99ers. Those are individuals out of work longer than 99 weeks and get no benefits currently and are living on a string, as an article on the front page of the NY Times said on Tuesday, describing a 49 year old woman who moved out of NY with only a few hundred dollars and drove to Brattleboro, VT and plans to live in her car and try and find some work.

Revisions to the previous week's data were made from 457,000 to 460,000 Initial Claims. Tomorrow the Unemployment rate for July will be released and it was already expected to rise to 9.6% from 9.5%, but with these Initial Claims rising steadily, it could go back up to 9.7% or higher.

Stay tuned and return during today's market action for any Updates which will be posted below.

Paul Krugman warns us. Is anybody listening in Congress?

An article appeared today written by Paul Krugman of the NY Times and recent Nobel Laureate. I have taken the liberty to select portions of his piece and copy them below. It is must reading.

Krugman: Staving off a depression

By Paul Krugman

"If we don't act swiftly and boldly," declared President-elect Barack Obama in his latest weekly address, "we could see a much deeper economic downturn that could lead to double-digit unemployment." If you ask me, he was understating the case.

... Banks aren't lending; businesses and consumers aren't spending. Let's not mince words: This looks an awful lot like the beginning of a second Great Depression.

...It turns out, however, that preventing depressions isn't that easy after all.

The failure of monetary policy in the current crisis shows that Keynes had it right the first time. And Keynesian thinking lies behind Obama's plans to rescue the economy. But these plans may turn out to be a hard sell.

News reports say that Democrats hope to pass an economic plan with broad bipartisan support. Good luck with that.

In reality, the political posturing has already started, with Republican leaders setting up roadblocks to stimulus legislation while posing as the champions of careful congressional deliberation — which is pretty rich considering their party's behavior over the past eight years.

Here's my nightmare scenario: It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it's only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy — well, you can see where this is going.

So this is our moment of truth. Will we in fact do what's necessary to prevent Great Depression II?

If you want the entire article from the San Jose California Mercury News, click here.

They knew this Financial crisis was coming in 2004

This is a NY Times article and a must read as to how we got in this financial mess. Readers will be as surprised as I was. Here are a few excerpts and a link to the entire article:

"How could Mr. Cox (SEC Chairman) have been so wrong?

Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary."

To read the entire article click here.

Resounding Bipartisan testimony on validity of Impeachment remedy for this Bush Administration given today but you won't read about it!

I watched and listened to CSPAN coverage of the House Judiciary Committee session headed by Rep. John Coyers, Committee Chairman, considering the issue of Impeachment of President Bush. Rep. John Kucinich was one of about 16 witnesses who gave sound reasoning as to why it was important to proceed with this Inquiry. It was professionally run and each person giving testimony made a compelling case to move forward with the Articles of Impeachment Inquiry. What shocked me was that there was no coverage of this event in the main media outlets or cable news. And to my surprise I looked at the NY Times with the hope they had reported something on the hearing. I was very disappointed nothing was reported as of 9:00pm this evening.

I ask you what could be more important than what this hearing and testimony shared with the American Public. Constitutional experts testified this is our last chance to save this country before it is too late. Republican law experts testified as to the importance of bringing up charges even though it is late in this Administration. But it was not covered by the media with the exception of CSPAN and KPFA. This is what headlines the NY Times.com had on their website from 7:30am this morning until tonight:


* Bush and McCain Seem to Diverge in Foreign Policy
By ELISABETH BUMILLER
Today, 08:21 PM

* Yankees 1, Red Sox 0: Yankees Get a Seventh Consecutive Victory
By TYLER KEPNER
Today, 08:19 PM

* 4,000 U.S. Combat Deaths, and Just a Handful of Images
By MICHAEL KAMBER and TIM ARANGO
Today, 08:13 PM

* Power Rising, Taliban Besiege Pakistani Shiites
By JANE PERLEZ and PIR ZUBAIR SHAH
Today, 08:09 PM

* City and State Brace for Drop in Wall Street Pay
By PATRICK MCGEEHAN
Today, 08:06 PM

* In Gas-Powered World, Ethanol Stirs Complaints
By KATE GALBRAITH
Today, 08:05 PM

* Merger of Sirius and XM Approved by F.C.C.
By THE ASSOCIATED PRESS
Today, 08:02 PM

* California Bars Restaurant Use of Trans Fats
By JENNIFER STEINHAUER
Today, 08:01 PM

* Weight Drives the Young to Adult Pills, Data Says
By STEPHANIE SAUL
Today, 08:00 PM

* Sugar Company Knew of Dangers, Report Says
By SHAILA DEWAN
Today, 07:57 PM

* Dear Parents: Please Relax, It’s Just Camp
By TINA KELLEY
Today, 07:44 PM

* Gas Explosion Injures 17 in a Queens Building
By ANAHAD O’CONNOR
Today, 07:19 PM

* Mind Games Precede Tour’s Pivotal Time Trial
By EDWARD WYATT
Today, 07:08 PM

* Your Money: Danger Lurks When Shopping for Student Loans
By RON LIEBER
Today, 06:32 PM

* Rings: Swimmer Feels Betrayed by the System
By KAREN CROUSE
Today, 06:28 PM

* Bats: The House That Her Grandpa Built
By RICHARD SANDOMIR
Today, 06:28 PM

* Cambodians Rally Around Leader Ahead of Vote
By SETH MYDANS
Today, 06:27 PM

* The Caucus: McCain Says 16 Months Is ‘Pretty Good Timetable’
By MICHAEL COOPER
Today, 06:23 PM

* City Room: Evacuation After Explosion in Queens
By SEWELL CHAN
Today, 05:38 PM

* Johnny Griffin, Tenor Saxophonist, Dies at 80
By BEN RATLIFF
Today, 05:30 PM

* In Paris, Obama Says Pressure on Iran Is Building
By JEFF ZELENY and STEVEN ERLANGER
Today, 04:40 PM

* Labor Party Suffers Defeat in Scotland
By JOHN F. BURNS
Today, 03:22 PM

* The Lede: Chavez Mends Fences With the King
By MIKE NIZZA
Today, 02:48 PM

* City Room: Spike Lee’s Father, and All That Jazz
By COREY KILGANNON
Today, 02:48 PM

* Your Money: Danger Lurks When Shopping for Student Loans
By RON LIEBER
Today, 02:21 PM

* Stocks Higher After Spate of Hopeful Economic Reports
By MICHAEL M. GRYNBAUM
Today, 01:46 PM

* Chrysler to Stop Leasing Cars
By NICK BUNKLEY
Today, 01:41 PM

* Flush With Cash, More Asian Tourists Flock to Japan
By MARTIN FACKLER
Today, 01:35 PM

* Saxophonist Johnny Griffin Dies at 80
By BEN RATLIFF
Today, 01:25 PM

* Jets Have Permission to Talk to Favre
By GREG BISHOP
Today, 12:24 PM

* City Room: New History of Woolworth Building
By SEWELL CHAN
Today, 12:23 PM

* Bush Widens Sanctions on Zimbabwe
By STEVEN LEE MYERS
Today, 12:03 PM

* Sastre Retains Lead After 19th Stage
By THE ASSOCIATED PRESS
Today, 12:00 PM

* Profile: Back to Art, Havel Meditates on Power
By DAN BILEFSKY
Today, 11:47 AM

* Well: ‘Last Lecture’ Professor Randy Pausch Dies
By TARA PARKER-POPE
Today, 11:33 AM

* Hole in Fuselage Forces Jet to Land
By MICHELINE MAYNARD AND TIM JOHNSTON
Today, 11:14 AM

* U.S. Expands Visa Program for Iraqis
By ALISSA J. RUBIN
Today, 10:50 AM

* The Lede: Condoleezza Rice’s Yen for Shopping
By MIKE NIZZA
Today, 10:48 AM

* Well: ‘Last Lecture’ Professor Randy Pausch Dies
By TARA PARKER-POPE
Today, 10:48 AM

* News Analysis: Obama Heads for Paris and London
By STEVEN ERLANGER
Today, 10:09 AM

* Dot Earth: A Little Oil Goes a Long Way
By ANDREW C. REVKIN
Today, 09:48 AM

* Well: Rethinking Diets, Weight Loss and Health
By TARA PARKER-POPE
Today, 07:26 AM

Get my point? NOTHING ON THE IMPEACHMENT HEARINGS!!!!

NY Times article regarding John McCain and his response

I am disgusted that the NY Times would write an article about John McCain and the relationship he had with a woman lobbyist back in the year 2000, especially now at this time in the Primary process. Shame on the NY Times.! As many readers know I have supported Barack Obama in the Primary on the Democratic side. This is not news worthy of a newspaper like the NY Times. Maybe it is of interest to the Inquirer or other sensational type newspapers, but the NY Times has lowered it standards at a time when the country is trying to unite. I am absolutely positive neither Hillary nor Barack will participate in this story, as they both respect Senator John McCain. I can tell you I won't be reading the NY Times any time soon ever again.

A story worth covering is John McCain's statement, which asked President Bush to Veto any measure which prohibits water boarding use by the CIA. Here is the man who himself was a prisoner of war, and early on in the debate on water boarding, declared that water boarding was torture. This is a major flip-flop by McCain and inconsistent with his stated values and feelings on this topic, before he was a Presidential candidate.

To read the entire NY Times article click here.

UPDATE: Frank Rich, NY Times, says casualty numbers manipulated during Chris Matthews "Hardball" show.

Frank Rich, NY Times reporter, was on Chris Matthews last night. He is sharp and willing to write the truth, as he has done many times. What pleased me yesterday about MSNBC's Hardball was that for the first time Rich said that the Administration is playing with the numbers for both U.S. and Iraqi casualties and they have been for some time.

This issue for me has been the subject of several of my posts in the past 4 months. It was encouraging to hear the same from Frank Rich's mouth. Now, if we can get them to print an article on the topic, we might raise more awareness as to the lengths this Administration is willing to go to twist the facts and lie about conditions in this war of choice in Iraq. When the transcript for Hardball comes out tonight I will update this post with his actual comments. Stay tuned.

UPDATE Sept.6th.

As promised above, here is the text from yesterday's Chris Matthews Hardball show where Frank Rich is answering a question from Chris.

RICH: Well, I agree with you (Chris). Part of it is there‘s not enough fact checking by the press. There‘s so many erroneous statements being thrown out there, including right now about what‘s going on with casualties in Iraq, both American and civilian. Very little of it is fact checked. It becomes a cloud of sort of disinformation, and that‘s been true since the hyping of the WMDs before we went in.