Jim:
It looks like that
big bad unemployment
number that we were
also worried about
ran into cheaper
gasoline, much lower
mortgages and let's
just say a genuine
bullish buzz saw.
That's what happened
today... while we
rallied, rallied
hard... even though,
at first, we should
have been down big
off of that
admittedly awful
unemployment number.
In this market, news
is happening so
fast, so furious...
that we can hate
stocks one minute
and like them the
next... get used to
it that's the new
dynamic... or, to
put it bluntly, more
people are filling
up at the pump,
heating their homes
cheaply, and
refinancing their
mortgages at lower
rates, then are
losing their jobs...
This (house of
pleasure)... trumps
this (house of
pain)...
we have windfalls
galore, and stimulus
galore that
overshadowed the
economy... the
actual economy
now... for all but
those that actually
lost their jobs. It
really is that
simple. We're in a
moment of time where
people now since
we're getting closer
and closer to when
things are going to
get better.
See all
of
tonight's
stocks
mentioned
on
Yahoo!
Finance,
here...
Friday,
December 5, 2008
(Cont'd from
above)...
Jim (cont'd):
See, our thinking
was that we were in
for three big, bad
events... remember,
I told you we had to
get through them
before we could
rally... we had the
prospect of rate
cuts by the European
Central Bank and the
Bank of England...
and we had the
unemployment number
today...
Once these big bad
events occurred even
as one out of the
three -- the
unemployment number
-- was
disappointing...
just the fact that
we ran the gauntlet
was enough to bring
buyers back from the
sidelines...
it isn't just
because the biggest
taxes on our
spending -- which is
our mortgage rates,
our home equity
lines, our gasoline
-- are plummeting...
make no mistake
about it I'm talking
about 30% declines
in heating oil... I
mean, you fill up at
the pump... I mean
come on...
Although they are
with crude oil down
to less than $41 a
barrel... a 25%
declined this
week... one week...
oil down 25% in one
week... we could see
gasoline at $1.50 a
gallon in three
weeks... and that's
going to put a huge
amount of disposable
income in consumers
pockets in time for
them to be thinking
about the
holidays!...
Beyond that we also
have some
eye-opening
statistics about
unemployment... As
my friend and
colleague at
TheStreet.com, Bob
Morrison, wrote
today... "As a share
of employment the
current job losses
that we are seeing
aren't close to
where they were
during the
recessions of 1974
and 1980... not even
close."
So remember, we say
forget any
comparison to
1932... We're not as
bad as the last two
serious slowdowns...
and those both have
horrible inflation
going against
them... We have much
more room to
maneuver...
We lost 533,000 jobs
in November. No
getting around
that... If things
get as bad though as
they were in 1974,
then we'd be seeing
1 million job losses
a month...
staggering. if they
get to 1980 levels
we be saying 650,000
job losses a month.
▼ ▼
▼ ▼
▼
The other great
point that Morrison
made is that job
losses are a lagging
indicator; they
peaked after a
recession... So
given these numbers,
we should expect
things to get worse
for the next 3 to 6
months, but then we
will be bottoming
out... That's not
too bad... we can
handle that... 3 to
6 months of really
bad numbers...
I am not saying we
are out of the woods
yet, but I am saying
that today was the
day when the Dow
should have
fallen... it should
have fallen below
8000... and we
should have touched
down the S&P 500,
800... In other
words, we should
have hit the 800
level in the S&P...
The fact that we
didn't was a major
win for the Bulls,
and a severe smack
down for the
Bears... A real
skewering... turning
the grizzly bears...
The resilience of
the Bull was quite
shocking today...
and it really got a
lot of people
going... just a lot
of positive things
happening that we
didn't expect...
Oh don't forget...
the insurers
rallying huge
today... they are
not going
bankrupt... HIG
doubled... That made
us feel good too...
Oh and one other
thing... close to
home... Let's not
forget about... Bob
Toll... who knows
housing...
yesterday, I thought
his stock was cheap
and going higher...
he was more
circumspect... with
Toll Brothers (TOL)
up another 6.96%
today... No, I
didn't just get it
right... I may not
be able to build a
house, but I can
pick a stock...
▼ ▼
▼ ▼
▼
The Bottom Line!:
We've run the
gauntlet of great
cuts in England and
Europe...
unemployment... The
consumer may be
coming back to life,
thanks to cheaper
gas and lower
mortgage rates...
And the unemployment
situation suggests
that things might
stop deteriorating
in six months...
especially with a
new president... who
is focused on job
creation... he's
going to be sworn in
in January...
Frankly, that day
can't come soon
enough... we
capitalize that were
so fixated on
unemployment, that
we didn't see the
positives until they
smacked us in the
face... and caused a
259-point rally...
Foreclosures are
probably about as
high as they are
going to get, and
housing may
bottom... get
this... this is the
first time I'm going
to say this on this
show... Housing may
bottom a head of
what looked like a
completely
cockamamie
prediction of June
30 of next year...
This is the first
time I have ever
felt that maybe I am
too late... Things
may not be all
better, but they are
certainly better
than they were a
week ago at this
time...
