Can't Wait To See This

Smart or smart-alec? You decide.

As I start this column, I realize it has been a full six months since I wrote to this blog. In that time, the stock market/Wall Street saw prices rise back over the coveted 10-thousand mark, a day in which prices fell dramatically one afternoon without any warnings or real reasons (they're still looking into it as of this morning), and things continued on a slow up-swing there. At this point, some may be looking at the Dow Jones Industrial Average to rise above 11-thousand. The Standard and Poors 500 is up more than 32 percent in the past 52 weeks. NASDAQ composite figures went up 45% over 52 weeks. These are all nice to see IF you're a stock market player and had your money placed in the right stocks.

However...

...jobless rates continued to hover around 10.0% nationally in the United States.

As I await the latest figures on new jobless claims, along with the rest of the nation and world, the pundits are telling us that the markets are flat. That's their way of saying one of two things: things aren't expected to be so rosy that the markets rise big, or, if the jobless rate doesn't rise much above 10-percent --- if it only goes up one-tenth of a percent, for example --- they don't expect a huge drop in prices today and tomorrow.

What are they awaiting? If the numbers don't drop dramatically in the short-term, they're going to be seeing 11-percent unemployment in the future --- and suddenly the stock markets will be on the decline. And it won't be good for the stockholders of American companies if the unemployment rate is at 11 vs 10-percent. But, the problems which exist and were largely created by the existence of big banks decrying that they are having to deal with unprecidented numbers of foreclosures. So, the government bails them out. And in the meantime, they continue to use their money to buy up the smaller banks which were --- UNFAIRLY --- not given any bailout money in order to keep up. Completely unfair, it is, that smaller regional banks were allowed to expire because the big boys were the only ones given a break.

I have said it before and I'll say it again: if you're going to give a bailout to the big banks, then you have to give the same kind of offer to the smaller lending institutions as well.

But, back to the unemployment part of the equation. Unemployment has already dragged down much in this econimic depression, but the markets have all but ignored that up to this point. Unfortunately, the Wall Street people patting themselves on the back because they've been able to "recover" a great deal of their losses of 100 weeks ago. This doesn't show up at street level.

Street level --- this is where the average American lives. I know it's hard to realize where street level is when you're on Wall Street, buying and selling and making commissions. And I honestly don't mean to make it sound like the floor traders can't see the street --- THEY do. But it is the CEO and CFO types who can't see from their upper-level skyscraper offices down to the place where the average person has been seeing friends not only unemployed, but struggling to survive due to their inability to pay their mortgage or put food on the table because they've gone without for such an extended period of time.

Wall Street --- keep smiling at your "success" now. You're going to drop again, and not like how it happens. This is because it will mostly likely go down slow and steady as the unemployment rate lacks improvement --- OR it will drop huge for several weeks in a row.

It's unemployment that is pulling the economy down. And the companies who were taking gains because they laid-off so many people will be taking new hits/drops because of the same thing. It's just that they are believing they are untouchables. What they fail to see is there is NO company which is going to be unscathed by the next big drop.

As it's an hour before the jobless claims rate comes out --- I'll stop and see. But I think I'll post this now before it comes out. I don't see it being a very good week. That makes me nervous. I hope the Wall Street gurus are nervous, too. They should be.