- The European Markets lost 3% over night.
- The IRS & Treasury revised their GDP figures this weekend. The U.S. economy shrank 6.2% in the 4th quarter of last year and is expected to shrink another 6% this first quarter of 2009.
- The Dow, Nasdaq and S&P 500 fell through the frickin' floor quickly this morning. The Dow, in particular, is now trading below 7000 which is going to set off a wave of panic.
- Nourial Rabini, the only economist to correctly call this recession, said we would finish 2009 at DJIA=6400. Rabini clearly declares that this will be an adverse market reaction to the Government taking control of the banking system, and forcing them to eat all their losses. This could produce 3 years of zero dividends and famine.
- As I write this we are approximately 14 minutes shy of the close on 3/2/2009. The Dow currently sits at 6,763.29. That is down 299.64 points or 4.24%. The Euros lost 3% last night. We beat that by one and a quarter. We are now at a low we haven't seen in 12 years, since April of 1997.
- This sudden plunge is largely a consequence of AIG's latest loss figures: 61.7 Billion USD in the 4th Quarter of 2008. This is the largest corporate quarterly loss in history.
- GM, AIG, and Citibank seem to be in a perpetual vegetative state.
- The U.S Government is the defacto owner of Citigroup right now, and won't admit it. Also the Government is refusing to assume control of it's new holding and reorganize the house.
- I heard former labor secretary Robert Riche on the Radio yesterday, retracting his condemnations of the D word. That is, Depression. He formerly said that no economist should use the D word related to this present recession, as there was no chance of us hitting 25% unemployment. He is now saying that those were hasty words, and he may have to eat crow for saying that. He still says that we are at only 8.9% unemployment vis-a-vis 25%. Unfortunately, the technical charts are forecasting 15% unemployment soon. That is downright nasty.
The latest most interesting analysis says the following: Every recession since the Depression has been caused by the Fed jacking up interest rates in an attempt to cut off inflation. This is the first time since the Great Depression that a major down turn has been caused by out-and-out banking collapse. Of course, the banking collapse was triggered by the explosion of a massive speculative bubble in Real Estate.
I thank God I never bought a house during that time, and that I just had my employee review meeting, and I scored all 90s and 80s, and they are going to give me a 3% cost of living increase in pay. I'm a damn lucky guy.
