The market hit 8,000 this week, more than 1,500 points off of the low set this year of 7,465 on February 19th. It feels good. There have been lots of green numbers and positive news stories. But I'm not convinced.
The headline today on CNNMoney is "2 Million Jobs Lost in 2009". That was much more than expected, and creates a longer term problem for all of us. There are now 2 million more people requiring government assistance. 2 million more people not spending money.
In March the total number of unemployed U.S. citizens was 13.2 million, or 8.5% (according to the U.S. Dept. of Labor http://www.bls.gov/news.release/empsit.nr0.htm). So in 2009 alone, the number of unemployed workers has increased by 17.8%! That is a huge number.
So while the stick market attempts to get the bad news behind us, the real situation continues to play itself out. I'm choosing to believe the numbers. So I'm short the market.
Friday, April 3, 2009
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when you have too much money chasing too few items, the price of the item goes up, regardless of the value.
ReplyDeleteCurrently that is what is happening. People are in the market not because they like what they are buying, but because they have nowhere else to put it.