DOW WOW!!

I posted this weekend on how well the DOW was doing. Apparently a bit premature. I did mention, however, that I was going to wait a tad before jumping into the pool. It could be a decade or a score (as in two score and four years ago) before I get in the pool. We will see.

The market down today? Big deal . . . a day, a week a month, a quarter, even a year does not the market make. I have stopped focusing on the market (at least today) and focus more on our overall economy for the long run. And folks, it ain't lookin' good. I don't know where this or any recovery is coming from. The headlines at Bloomberg are as follows:

•Asian Stocks Decline on New York Manufacturing Figures, Commodity Prices
•Fisher Says Fed Can't Counter `Flood' of Treasury Borrowing With Purchases
•Treasuries Climb as Fed's Fisher, Evans Downplay Monetization of Deficit
•U.S. Stocks Extend Global Slide; MSCI World Index Falls Most in Two Months
•`Monster' Madoff Deserves `No Hope,' Fraud Victims' Letters to Court Say
•Yosano Says Japan Government Has Absolute Trust in U.S. Treasuries, Dollar

They were worse earlier today and I still view them as overly optimistic. Let us take this one bite at a time.

Bite One, Too Much Optimism

The market tanking a bit might fix this but I read multiple articles today by Paul Krugman and the like on the dangers of the government trying to take us off stimulus too soon because everything seems so great. Here is one:

http://www.nakedcapitalism.com/2009/06/great-depression-ii-meme.html

Now I am one that never thought the stimulus would work but I am also one that thinks we are better off with it than without it, so the thought that we do not need it anymore is dangerous. We do not need to stop the stimulus too soon. We do need to focus it more properly.

Bite Two - Manufacturing

The Empire State index came in below expectations (not below mine but below others) and it is being blamed for today's market reaction. To me, this is blaming the messenger. Go figure.

http://www.newyorkfed.org/survey/empire/Empire2009/empiresurvey_20090615.html

Bite Three, Commercial RE Still Off the Cliff

I really need to say little here; it is what it is.

http://www.calculatedriskblog.com/2009/06/fitch-us-cmbs-delinquencies-past-2.html

Bite Four - Job Losses Likely Not to Peak Until 2014

http://www.sacbee.com/1098/story/1936416.html

Bite Five - It is the Debt Silly

I have a lot more bites but it is getting late so let me cut to the chase.
We are way - way - too over our heads in debt. We are swimming in it and we will for years to come. It will not fix itself overnight.

http://www.financialarmageddon.com/2009/06/ball-and-chain.html

Disclosures: None