The Bad News Continues

Keep those pencils sharpened as the records continue to be set.

Worst January in S&P History

You may have noticed stocks off a tad this month. Well, a tad is a tad of an understatement. S&P off 8.6% this month and that is a January record. And the Dow had that beat with an 8.8% drop, another January record, which is saying a lot because that beats a lot of terrible economic situations over the 113 year career of the Dow. I expected an Obama bounce and was sadly disappointed.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4DYRS8nD4gM&refer=home

The linked Bloomberg article talks about the January barometer, which is based upon January setting the tone for the year. Apparently it is right over 80% of the time. I do not consider this necessarily accurate on a scientific basis, but for this year I think it is accurate.

Now at the start of the month I predicted the markets would be down 10-20% for the year versus year end 2008. I am standing by that but am now thinking it could be a larger decrease. Let's hope not.

You may be reading this and thinking I am just another doom-and-gloomer, but you would be wrong. I have no predisposition. I am, however, not seeing any news that suggests that the worst is behind us. I am solid doom-and-gloom when the data suggests same and right now it is hard to read it otherwise. Some do, but they have been giving some less than credible predictions.

Not a Record, But Three More Banks Down

I have said repeatedly that my prediction of massive bank failures in 2009 was a no brainer, as in it took no crystal ball. Well, that continues to be the case. Another three down today.

http://www.bloomberg.com/apps/news?pid=20601110&sid=avXyR82JeMP4

Second Best to a Record

London luxury homes had their second worst decline in January (I know, who cares). I expect worse ahead. London is following the U.S. in its decline but unfortunately for them I anticipate their problems are significantly worse than ours. We will see, but I would move to Canada before the U.K.

http://www.bloomberg.com/apps/news?pid=20601110&sid=aM9uEAUYNgvI

Probably Not So Bad

I noted yesterday that Goldman Sachs predicted $4 trillion (with a T) in financial institution losses. I did not agree with it - I just reported it. Not good news from Paulson's old firm

Naked Capitailism makes a good point that this is more negative than Nouriel Roubini, a constant -yet usually accurate of late - doom-and-gloomer. He predicts U.S. financial problems of $1.9 trillion, less than 50% of Goldman. I only hope they are both wrong, yet I fear that Nouriel may still be calling things correctly. If so . . . I have no idea how bad this might get.

http://www.nakedcapitalism.com/2009/01/goldman-bank-rescue-may-reach-4.html

Disclosures: None