Posted on 01/04/2008 4:56:13 PM PST by shrinkermd
Stocks fell sharply as a major crutch for the hobbling U.S. economy -- employment growth -- began to look rickety.
The Dow Jones Industrial Average spent the entire day in the red and finished near its intraday trough, off 257.44 points, or 2%, at 12800.18, its lowest close since late November. The blue-chip indicator was hurt by a disappointing Labor Department report showing that nonfarm payrolls rose by just 18,000 workers1 in December, the job market's worst performance since August 2003. The unemployment rate rose to 5%, the highest level since November 2005, from 4.7% the previous month.
The jobs report undermined investors' hope that the economy can stave off a dangerous chain reaction in the months ahead. If employment continues to suffer, analysts say that could cut into consumption, which represents more than two-thirds of gross domestic product -- essentially, the economy's bottom line.
"After this report, I'd have to say the chances of recession are about 50-50," said economist David Wyss, of Standard & Poor's in New York. In just three days of trading so far this year, the Dow has erased more than half its gains for all of 2007. It is already down 3.5% in 2008.
In particular, investing pros said companies that rely heavily on robust economic growth were hammered. That meant big losses for small stocks and the technology sector, which benefits when companies are adding new equipment to outfit fresh hires and handle expanding workloads
(Excerpt) Read more at online.wsj.com ...
Oil company and oil support company stock is down substantially even though oil remain $97-98. Also, steel, which is oil production support.
The desire of some “experts” to talk this economy into a retreat is inexplicable.
The state of Florida is already in a recession. This is according to Jeb Bush’s economic team.
The state of Michigan is still in a recession.
The state of Maine is still in a recession.
Most of Ohio is in recession.
Massachusetts is losing population and economic vitality.
I don’t think it matters much if the entire nation goes into recession, all you need is a few more large states to go along with Florida to cause national level problems.
There was a Dow Theory bear market sell signal last month.
And today’s large decline takes us back down to the lows of the previous two declines.
Also, the Nikkei average plunged last night in Japan.
I think next Monday is going to be very interesting.
Once again, I will point out that this is not a political thing. Bush is not responsible if the market crashes, although the media will certainly try to blame him for it. It’s been building up for the past 50 or 60 years.
For some reason, I can’t find a financial letter I read this morning, but it pointed out that the derivative market has actually and unbelievably expanded over the past six months, to something in the neighborhood of several hundred trillion dollars. And here I thought it was unwinding. No, the offshore funds are going even further out on a limb!
This is scary stuff.
Man, that's sure going out on a limb.
OH MY!!! I remember the recession of 2006... wait, I DON'T remember a recession in 2006...
50/50 = maybe so, maybe no
People got their life on the line. People invested in 401k programs can not just call the broker and tell him to take it out. this is not looking well at all.
The President needs a Serious plan. The rats in control of congress have DONE ZIP since 2006.............they are ready to blame Bush and they don’t give a hoot if I go hungry or not. I will not follow this market much longer like this.
it’s the surest 50/50 I’ve ever seen.
Chance for a recession is 100%. When it might happenis not known. Chance for recovery is 100%, again, timing is uncertain.
It was talk before. But 100 dollar oil is not only psychologically devastating, it's probably just as economically devastating.
We're due. You might as well start hedging.
The next(or perhaps current recession will be announced as having been in recession for 2 or 3 quarters already. It is never known or admitted untill it is well underweigh.
I've pretty much tossed in the towel on defending the economic expansion. To be perfectly honest, I expected this all to unwind a year ago, it didn't.
There's too many signals going off at once for me to expect anything other than a recession at this point. All I'm waiting for now is the beige book report on the 16th. That, I expect, will be the final nail in the proverbial coffin.
California celebrity "Republican" Governor Arnold Schwartzenegger is working relentlessly to make his state one of those that will soon join Florida to make a national problem!!!
So far the US and European Fed has thrown everything but the kitchen sink at the global economy. Interest rate cuts, probably close to 0.5 to 1.0 trillion dollars of below rate loans to banks, a virtual flood of liquidity. But the markets continue pulling back, the big boys are getting bailouts from the Chinese and Saudis, and everyone is scratching their head hoping for a soft landing on the unwinding of the bad overleveraged debt.
Get your popcorn ready, this one is going to be interesting.
“The desire of some “experts” to talk this economy into a retreat is inexplicable.”
I imagine then, that if there were no experts the economy would never go into recession?
I know there will be disagreement, but I still think our economy is in better shape than the rest of the world.
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