Are We Off The Bottom?

I just had a very fun time (not) traveling for three days and am glad to be back. Judging by the market, I should travel a lot more often. Markets did quite well while I was on the lamb.

I personally have had some nice gains in my equity investments over the past two days. Tuesday especially was a great day. Yet, I have to pose the question, is it sustainable? Let me add that I am among the masses looking for a bottom. I have no bets otherwise and have some equity positions that would benefit from a bottom. Moreover, individually I want this pain to be over. We all want it to be over. Yet, despite certain sucking wind companies announcing that they have made money the first two months of this year, you have to wonder.

Asian stocks are back in a downward direction after a few days of relief.
So those in Asia are not convinced yet.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGhc55Gci19A&refer=home

And we all know the market, after some significant losses for the past two to three weeks were ready for any excuse for a bounce. The real question revolves around what do the facts reveal? The facts, I fear, are not pointing to a bottom.

Let's start with unemployment. Four states, including California, are now over 10%, and that is using the rather bogus official number that does not properly account for people who have given up for over 60 days, people with hours cut, people working part time who want to work full time and the like. Calculate these in and the number is several percentage points higher.

http://www.calculatedriskblog.com/2009/03/state-unemployment-rates.html

Tax receipts in the U.S. are falling off a cliff so the deficit is heading the opposite way. The falling tax receipts reflect the incomes of those in the U.S. and it is not a pretty picture. It is called an increasing budget deficit. I might add that the hunger for our Treasuries seems to be dampening just a bit, which spells as bit of trouble brewing.

http://www.marketwatch.com/news/story/Budget-deficit-widens-10-receipts/story.aspx?guid=%7BE595148D%2D3756%2D4F39%2DA1A6%2D773ABA0039A8%7D

We may be close to a bottom on subprime (though with underwater properties and job losses there could be more), but we have a long way to go on prime and Alt-A. These losses are increasing. But this wave to me will be small compared to the upcoming losses for commercial real estate, which is taking a major head-dive at the moment. Objectively, I do not see this as a positive.

http://www.calculatedriskblog.com/2009/03/bank-failures-and-c-loans.html

There is more but it is late and I am tired.

Disclosures: None