Dr Housing Bubble 05/01/09

[Crewleader]

The Schism Between Wall Street and Main Street:
Green Shoots for the Banking Oligarchy and Crap Shoots for Others.

On Wednesday we learned that GDP contracted by a stunning 6.1 percent in the first quarter of 2009. This came on top of the already large 6.3 contraction in the fourth quarter of 2008. This back to back contraction is the deepest in over 50 years when in the fourth quarter of 1957 GDP contracted by 4.2 percent followed by a 10.4 percent contraction in Q1 of 1958. Yet the market rallied on this news because of glimmers of hopes. Green shoots as some like to say. The glimmer of course comes from banks because the Federal Reserve and U.S. Treasury are doing everything in their power to destroy the U.S. dollar and keep rates artificially low so banks can keep on creating excessive debt. You may recall that it was excessive debt that got us into this mess so apparently creating more excess debt is the way out. Yet the average American household is seeing their access to debt contract while banks and Wall Street suddenly have a platinum American Express line directly linked to the Fed and U.S. Treasury.

The market has been on a tear, come bad news, really bad news, or flat out horrible news:



Since the low of March 6th, the market has gone up a stunning 31%! As you can see from the chart above this increase has gone non-stop. When was the last time things were this frothy? Try the summer of 2007. Need we remind you what happened after that? The wheels of the global economy came flying off. Now of course, given the massive injections of capital into the banking sector this rally could go higher. But make no mistake, this rally is for the banks and Wall Street since the average American is seeing very little real world benefit aside from a psychological relief. If you break down the numbers, the situation is still troubling of course. 13 million Americans are unemployed. 9 million are working part-time looking for full-time employment. Another 1.9 million are not working because of other reasons including giving up. All in all we have about 24 million Americans either unemployed or underemployed. This is the Fed’s idea of green shoots.

In this article I want to look at 10 charts that clearly show we are nowhere near a bottom. These charts will also show that for trillions in bailouts, we have seen a marginal gain in the real economy.

http://www.doctorhousingbubble.com/the-schism-between-wall-street-and-main-street-green-shoots-for-the-banking-oligarchy-and-crap-shoots-for-others/

[opihimoimoi]

1. There is an answer...we just need the courage..... :o)

K&R 4

[fasttense]

2. Seems another market crash and a continual economic depression is what the bankers have created

"Yet, they indisputably are. According to a study prepared for Bloomberg by Washington Service, a research outfit, directors, officers and the like have sold $353 million worth of stock in this fading month, or 8.3 times the total bought. As a matter of fact, according to the firm, insider purchases of $42.5 million are on track to make April the skimpiest month for such buying since July 1992.

The pace of selling in the first three weeks of this month, incidentally, was the swiftest since the market peaked and the bear came out of hibernation with a vengeance in October ‘07.

We’re quite aware that insiders are not infallible. But they are, after all, in the front lines of commerce and industry and so presumably have a better fix on the economy and the prospects for recovery than analysts and economists, whether of macro or micro persuasion.”"