Archive for August, 2011

Confidence? The world could sure use a leader!

Here is an August 18, 2011

News story on MarketWatch

That says what we have been saying here on www.the2012Warning.com for a long time.

By MarketWatch
WASHINGTON (MarketWatch) — Confidence, the foundation of our economy and our markets and our democracy, is collapsing around us.

ECONOMY AND POLITICS | Economy and Politics page
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Buffett to government:
Save the middle class
Marketwatch.com columnist David Weidner discusses Berkshire Hathaway CEO Warren Buffett’s group of companies and how they rely on the success of the nation’s middle class.
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You can see it in the extreme volatility in the stock market, where 2% declines (interrupted occasionally with a 2% gain) have become commonplace. Investors are in a panic, rushing for the safest assets, such as cash, bonds, and gold.

And we’re seeing it in the economic data. Manufacturing firms in the Philadelphia region reported Thursday morning that business is horrible.

Nearly half of the respondents to the monthly Philly Fed survey said business conditions had worsened in late July and early August. Forty-seven percent said new orders declined, while more than a third said shipments decreased. Read our complete story on Philly Fed factory index in free fall.

The 34-point drop in the Philly Fed index was the largest since October 2008, when the global economy was reeling from the failure of Lehman Bros. and the near-death of many other significant banks.

The drop in the Philly Fed index to negative 30.7 in August follows a weaker-than-expected survey from the New York Federal Reserve Bank earlier in the week. The news from these two Fed banks is that something awful is happening to business confidence.

Wasn’t the big fight in Washington and Europe over debts supposed to restore confidence?

The severe decline in the Philly Fed doesn’t prove we’re falling into a recession. It’s given false signals before. And other indicators don’t show that the economy is slowing sharply (even if it is weak). For instance, : weekly jobless claims figures have been nearly unchanged in recent weeks. Industrial production was strong in July. The leading economic indicators rose 0.5% in July.

What the Philly Fed index does show — along with the selloff on Wall Street, the rally in gold and bond markets, and the gloomy mood on Main Street — is that faith in the markets and in the economy and in politics have been shaken.

Once confidence is lost, it is not easily regained. And confidence is what we need before we’ll invest in the future.

The world could sure use a leader right now, but whom do you trust to lead us back to prosperity? A technocrat? A prophet? A salesman? Maybe each other?

ECONOMY AND POLITICS | Economy and Politics page

Buffett to government:
Save the middle class
Marketwatch.com columnist David Weidner discusses Berkshire Hathaway CEO Warren Buffett’s group of companies and how they rely on the success of the nation’s middle class. 
• Meet the Republican presidential candidates
• Track the latest economic-data reports
• Latest news on the Federal Reserve
• U.S. economic calendar
• Global economic calendar
• Political Watch blog | The Week in Charts
• Columns: Nutting | Delamaide | Kellner
• Market Snapshot | Bond Report | Currencies
• Sign up for breaking-news alerts by email

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DOW Jones Industrial Average Plunge

The Dow Jones industrial average plunged 513 points, or 4.3 percent, to 11,384 on Thursday, August 4, 2011.

“As we near another Recession”, or as some are saying, “as we enter the Double-dip Recession,” or as I have said for a long time, “As the Recession Continues and Deepens” some things are becoming increasing clearer:

1. America is in deep, deep financial trouble

2. The rest of the world doesn’t fare much better

3. At some point there is going to come a cry for a “One World Leader” to straighten out the mess.

Who will he be? How will he rise to power?  How quickly will he come on the scene? Is it time yet?

Here’s a look at the Dow’s 10 worst days since 1900:

By percent decline:

– Oct. 19, 1987: 22.6 percent, or 508 points

– Oct. 28, 1929: 12.8 percent, or 38 points

– Oct. 29, 1929: 11.7 percent, or 31 points

– Nov. 6, 1929: 9.9 percent, or 26 points

– Dec. 18, 1899: 8.7 percent, or 6 points

– Aug. 12, 1932: 8.4 percent, or 6 points

– March 14, 1907: 8.3 percent, or 7 points

– Oct. 26, 1987: 8 percent, or 157 points

– Oct. 15, 2008: 7.9 percent, or 733 points

– July 21, 1933: 7.8 percent, or 8 points

By points:

– Sept. 29, 2008: 778 points, or 7 percent

– Oct. 15, 2008: 733 points, or 7.9 percent

– Sept. 17, 2001: 685 points, or 7.1 percent

– Dec. 1, 2008: 680 points, or 7.7 percent

– Oct. 9, 2008: 679 points, or 7.3 percent

– April 14, 2000: 618 points, or 5.7 percent

– Oct. 27, 1997: 554 points, or 7.2 percent

– Oct. 22, 2008: 514 points, or 5.7 percent

– Aug. 4, 2011: 513 points, or 4.3 percent

– Aug. 31, 1998: 513 points, or 6.4 percent

Source: Dow Jones Indexes, a division of CME Group Inc.

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