The Long Crisis

The March unemployment statistics were released this morning at 8:30 AM by the US Department of Commerce to largely a show of indifference. Wall Street must be getting used to a steady parade of bad news.

The Dow Jones industrial average (INDU) was down about 14 points, or 0.2%, with 15 minutes left in the session. The S&P 500 (SPX) index added a few points. The Nasdaq composite (COMP) added 7 points, or 0.5%. After bouncing around a bit immediately after the Non Farm Payroll report was released the market seemed to discount the terrible news and settled down to narrow range trading in the afternoon.

As expected the report was not good. Employers cut 663,000 jobs from their payrolls in March, after cutting a revised 651,000 in the prior month. Economists surveyed by Briefing.com expected 650,000 job cuts.

The unemployment rate, generated by a separate survey, rose to 8.5% from 8.1% in February, in line with estimates.

“The markets have had a bit of a ‘the sky is falling’ fear built into them, but that’s not been the case,” said Blum. “We’ve been in a really bad recession and I don’t think we’ll get out of it until 2010. It’s going to be lackluster for a while but the sky is not falling” said Len Blum, managing director at Westwood Capital.

Investors seem to have become more greedy again rather than fearful. The stock market cheerleaders are doing their best to once again encourage buying. The current rally does seem to have legs and may well last for some time, perhaps even until after Memorial Day. However, eventually traders are going to realize that we are not in a short term recession.

We are presently in a deflationary deleveraging depression. With housing prices still tumbling lower and commercial real estate now showing real signs of weakness the contraction in economic activity in coming months will overwhelm the government’s stimulus efforts.

If you must buy stocks on this rally it would likely be wise not to fall in love with them. In most cases buy and hold will be the way to certain disaster. Wall Street may be getting used to terrible news but I doubt if it is ready for a complete panic and meltdown.

This Long Crisis will be with us for a very long time and conditions in the US will never return to “normal”.

Tweet This Post

Related posts:

1. Banksters Reporting Week on Wall Street What a week or two for the Banksters on Wall...
2. Party on Wall Street Dude – Dow 10,000 Again The headline may be a little premature as the Dow...
3. Wall Street Casino Ignores Lehman Brothers Warning One year after the collapse of Lehman Brothers due to...
4. Wall Street Rises on U.K. Bank Deal – Potential Citigroup Deal The stock market is thought of by many novice investors...
5. Living in a Dream Land Wall Street Centered World Judging from recent stock market performance all is well with...
6. Wall Street’s Ownership of Government Have you ever wondered who actually controls the important affairs...
7. Tim Geithner : Wall Street Banksters Best Friend Tim Geithner, Obama’s wheeling, dealing Secretary of the Treasury, seems...

Related posts brought to you by Yet Another Related Posts Plugin.

One Response to “Wall Street Getting Used to Terrible News”