20 Shocking New Economic Records That Were Set In 2010
by ilene - January 18th, 2011 4:21 pm
Courtesy of Michael Snyder at Economic Collapse
2010 was quite a year, wasn’t it? 2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline. The number of foreclosure filings set a new record, the number of home repossessions set a new record, the number of bankruptcies went up again, the number of Americans that became so discouraged that they simply quit looking for work reached a new all-time high and the number of Americans on food stamps kept setting a brand new record every single month. Meanwhile, U.S. government debt reached record highs, state government debt reached record highs and local government debt reached record highs. What a mess! In fact, even many of the "good" economic records that were set during 2010 were indications of underlying economic weakness. For example, the price of gold set an all-time record during 2010, but one of the primary reasons for the increase in the price of gold was that the U.S. dollar was rapidly losing value. Most Americans had been hoping that 2010 would be the beginning of better times, but unfortunately economic conditions just kept getting worse.
So will things improve in 2011? That would be nice, but at this point there are not a whole lot of reasons to be optimistic about the economy. The truth is that we are trapped in a period of long-term economic decline and we are now paying the price for decades of horrible decisions.
Amazingly, many of our politicians and many in the mainstream media have declared that "the recession is over" and that the U.S. economy is steadily improving now.
Well, if anyone tries to tell you that the economy got better in 2010, just show them the statistics below. That should shut them up for a while.
The following are 20 new economic records that were set during 2010….
#1 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.
#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.
#3 The price of gold moved above $1400 an ounce for the first time ever during 2010.
#4 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent…
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Did you expect anything different?
by ilene - February 4th, 2010 2:04 pm
Did you expect anything different?
Courtesy of Nicholas Santiago at InTheMoneyStocks.com
The rally from the March 2009 lows was one of the largest rallies we have ever witnessed in stock market history. While the ninth year of a decade is usually a bullish trading year there a very few people who expected an advance over fifty percent off the lows. Many traders and investors including myself would have expected at least one 10 percent correction during that rally; as we all know that did happen. The closest that we did come to a ten percent correction in the major indexes was in June through early July 2009, when the market pulled back nearly eight percent. That was really the extent of it for the year of 2009 as far as pullbacks and corrections are concerned.
Why is 2010 a completely different picture for the stock market? When the SPDR TRUST (NYSE:SPY), Power Shares QQQ(Nasdaq:QQQQ), and Diamonds trust Series 1 ETF (NYSE:DIA) found a low in March 2009 the public was in despair. People believed that the next great depression was underway. Massive liquidity was put into the market by every central bank in the world. Cash literally poured into every toxic asset that was ever designed. Since that time the markets have responded by moving over 50 percent off their lows. Now what? Are we back to normal yet?
Today the markets want to know what is next from Mr. Bernanke and company (other central banks). Like the Janet Jackson song says, “what have you done for me lately”? What is next for an encore? The general problems such as the severe housing crisis still remains, the high unemployment picture has not changed, banks have cut credit lines are still not lending or making significant loans, and spending by the consumer continues to remain near extremely low levels. While the Federal government can create tax breaks and incentive programs for hurting citizens and residents to make them feel like they are getting something, however, can that really fix the problem?
Where are we now? Currently we are in the middle of a correction. If you have ever gone to a party, you know the party must come to end eventually. Well, the market is telling you that the 2009 party is over for now. Yes, someone will have another party along the…
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THE BEST APPROACH TO 2010: THE OPPOSITE OF 2009?
by ilene - February 2nd, 2010 9:25 am
THE BEST APPROACH TO 2010: THE OPPOSITE OF 2009?
Courtesy of The Pragmatic Capitalist
A recent note from David Rosenberg highlights the schizophrenic market we have been experiencing over the last few years. What works one year quickly stops working the next year. Thus far in 2010 that trend has been true again. After a very bullish 2009, Rosenberg now thinks the market could be entering a bearish phase in 2010. And that means, what worked in 2009 likely won’t
“It is interesting that heading into 2008 all you had to do as an investor was flip everything around from market performance in 2007 — across just about every asset
class . Then in 2009, what you wanted to do was the exact opposite as what worked in 2008 (see Table 1 below). Here we are in 2010 and it seems to us as if, yet again, what worked the year before is not going to work in the coming year and vice versa. Take emerging markets for example — most of them doubled in 2009, and here we are in the first month of 2010 and the MSCI excluding Japan Asian index is already trading at its lowest level in two months. The region still trades at 2x book value versus the 1.8x historical norm so don’t think for a second that we have approached some oversold low … at least not yet.”
Source: Gluskin Sheff
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New Year: New Economic Boom? Why 2010 Should Be One to Remember
by ilene - January 24th, 2010 11:17 pm
Elliott Wave International’s report puts 2010 into Elliott Wave perspective. The 13-page report is available for free download now. Learn more here. – Ilene
New Year: New Economic Boom? Why 2010 Should Be One to Remember
By Nico Isaac
In the realm of market psychology, there’s a big difference between optimism and extreme optimism. The first is seeing the glass half full. The second is seeing the glass half full deep in the heart of a bone-dry desert. In finance, it’s what we call "Buying the Dip" mentality — when all outcomes, even losses, are cause for celebration.
We are there now.
To wit: With a new year upon us, the mainstream has already come up with a fresh tagline to define the next 360-or so days. It even rhymes: The Bull Runs Again In 2010. This projection is in no way "in spite of" the fact that the U.S. stock market just finished its first decade of negative returns since the Great Depression; it’s because of that fact.
See, according to the mainstream experts, this "Lost Decade" of abysmal stock performance (in which the Dow ended 9% in the red, the S&P 500 – 24%, and the NASDAQ Composite – 44%) is the very foundation on which a new bull market will apparently be born. One economic scholar recently coined the phenomenon the "Slingshot Effect" — the more severe the downturn, the faster the recovery. (Associated Press)
Adding to the upbeat chorus are these recent news items:
"The horrible decade has wiped out all the excesses of the previous two decades and put us back on track for more normal returns." (USA Today) — AND — "It may be the best of all possible worlds." (Business News)
Back in the late 1990s, when the "unstoppable" NASDAQ began to experience regular days of double-digit drops, it was "Buy-the-Dip." Now, it’s "buy the entire lost decade." And, as the Dec.31, 2009 Elliott Wave Financial Forecast Short Term Update reveals — current sentiment readings "continue to show that stock market bears have packed up and moved to Florida for the winter."
The Dec. 31 Short Term Update also reveals two mind-blowing charts of the S&P 500 versus Investor Intelligence Advisors Survey Percentage of Bears — AND, the S&P 500 versus the percentage of "Fully Committed" bullish advisors since 2000. The current reading…
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Robert Prechter’s Report: 2010
by ilene - January 20th, 2010 1:14 pm
Elliott Wave International is offering a free report on Robert Prechter’s outlook for 2010. Here’s what they have to say--essentially, permabear Prechter did not turn into a bull last March; he’s a still a bear, and now the hibernation is over. – Ilene
Robert Prechter’s Report: 2010
Recall the prevailing investor sentiment from this time last year …
U.S. stocks had been in strong decline for more than a year. Some of the most celebrated bulls had turned into bears, and the few bears that did exist before the downturn had become even more bearish. The Daily Sentiment Index for the S&P registered an astonishing 3 percent bulls — virtually no one was betting on the upside — and the bleakest of forecasts for 2009 called for nothing short of financial apocalypse.
But well-known contrarian analyst Robert Prechter took the opposite side of the trade. Prechter, a long-time bear, emerged as a bullish voice among overwhelming bearishness:
"The market is compressed, and when it finds a bottom and rallies, it will be sharp and scary for anyone who is short."
In the following days, the mainstream media reported that "perma-bear" Robert Prechter had turned bullish — the reports were only half true. Prechter had, in fact, turned intermediate-term bullish, but he stopped short of recommending average investors to jump back in. Why?
Prechter saw something on the horizon that the shortsighted mainstream market watchers did not, which brings me to the untold portion of this story …
In Prechter’s eyes, the bear market is far from over, and what he expects to happen after the current rally ends is significantly important to how you position your portfolio now.
Download "The Most Important Investment Report You’ll Read in 2010." Inside, Prechter reveals his big-picture outlook for U.S. stocks and the U.S. economy. He examines the government’s unprecedented involvement in the financial markets and private enterprise.
Learn more about and download the free 13-page Most Important Report for 2010 now.
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Exercises In Supreme Hypocrisy: Bill Gross Edition
by ilene - January 7th, 2010 11:33 am
Exercises In Supreme Hypocrisy: Bill Gross Edition
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Courtesy of Zero Hedge’s Tyler Durden
In a pathological example of nearly clinical hypocrisy, PIMCO’s Bill Gross yesterday dedicated 4 meandering essay pages full of polemical ramblings to the characterization of America’s sad political and financial hybrid reality. Yet the billionaire’s saddest message is precisely the self-deluded aggrandizement that Gross decries yet willfully takes advantage of every single day. Because after bemoaning the fate of America’s broken political system, and ridiculing the Federal Reserve’s kleptocratic-friendly ways, it is precisely people like the PIMCO chairman that are most guilty of taking advantage of every single loophole presented to them, even as they criticize just this activity. This, beyond all the petty trivialities that Gross discusses, is precisely what is most wrong with America – at this point everyone, and especially Mr. Gross, knows too well that the wealth transfer from the middle class to the elite 1% of society will not end until such time as America itself defaults. Yet having the very people that benefit the most from this, write non-apologetic letters in which they criticize the very system that lets them walk home every day with an extra zero in their bank account simply due to their special connections within this very broken system, is beyond reproach.
Gross writes:
Our government doesn’t work anymore, or perhaps more accurately, when it does, it works for special interests and not the American people… What amazes me most of all is that politicians can be bought so cheaply.
Well, Gross should know all about special interests and bribery. A casual check indicates that the PIMCO boss himself donated $6,900 to future present Barack Obama in 2008, and another $4,000 to the Democratic Senatorial Campaign committee. What was the IRR on that investment Mr. Gross? Just how many special Treasury JVs is PIMCO part of these days, and how much taxpayer money ends up in the Newport Beach bond manager daily, to simply trade side-by-side with the Federal Reserve and front-ru(i)n the broader investing public? Was Obama the cheapest politician you could buy?
We were so appalled with the result of this query that we decided against checking further back in time to see just what the price of bribery for prior presidents was. However, we did check how much of a "special interest" PIMCO itself is –…
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Few Called Market Turn, Fewer Predict It Will Last
by ilene - January 2nd, 2010 2:29 pm
H/t to Pragcap.
Few Called Market Turn, Fewer Predict It Will Last
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By AP / TIM PARADIS, courtesy of TIME
(NEW YORK) — Few analysts forecast this year’s remarkable stock market rebound as major indexes were plunging to 12-year lows last March. Now, with most experts predicting the pace of stocks’ gains will slow in 2010, there’s reason to believe they will be proven correct.
Stocks began the dramatic turnaround in March after Citigroup Inc. and other big banks said they were making money again, and then climbed at a fairly steady pace as signs of an economic recovery from the Great Recession became more pronounced.
Investor fears about a potential financial system collapse played a big role in the early year slump in stocks. Once it was clear that wasn’t going to happen, the Standard & Poor’s 500 index roared back 64.8 percent from its early March low, the biggest move since the Depression. For the full year, the index rose 23.5 percent, its best showing since 2003.
But sustaining that momentum in the new year likely would require a big drop in the unemployment rate and strong corporate profit gains, along with stable borrowing costs--a combination few analysts are forecasting.
"The easy money has been made already," said Bill Stone, chief investment strategist for PNC Wealth Management. "You’re not going to see another 65 percent move in the next nine months."
In the last day of the year, more signs of healing first pleased investors, then had them concerned about the economy’s ability to thrive without government help. Light trading volume exaggerated the market’s moves, sending the Dow Jones industrial average down 120.46, or 1.1 percent, to 10,428.05.
The year’s stats tell an incredible story across the financial markets:…
Stock market gains often come months before economic recoveries are confirmed. That’s because investors tend to bet on how they think business conditions will be six to nine months in the future. In downturns during the past 60 years, the S&P 500 index hit its bottom an average of four months before a recession ended and about nine months before unemployment reached its peak…
Ron Kiddoo, chief investment officer at Cozad Asset Management in Champaign, Ill., said the market can continue its rally through 2010 only if investors see that companies are again hiring, bringing the unemployment rate down for its present 10…
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THE 5 BIGGEST RISKS OF 2010
by ilene - December 28th, 2009 4:18 pm
THE 5 BIGGEST RISKS OF 2010
Courtesy of The Pragmatic Capitalist
As we enter the new year investors will be wise to focus on the risks of 2009. Although the crisis appears long behind us it’s important to keep an eye on the bigger picture. Little has changed in terms of the structure of our global
1) Those darned analysts
It would be comforting to think that Wall Street’s analysts were in fact doing us all a great big favor with their expert analysis, but the truth is, more often than not, they aren’t. As we have seen with my proprietary expectation ratio, the analysts have been behind the curve at every twist and turn of the crisis. They remained too bullish heading into 2007 & 2008 and then were behind the curve as operating earnings tanked and they turned very bearish in Q408 and Q109. Like clockwork, the ER bottomed and the market soon followed. The greatest risk heading into 2010 is an analyst community that becomes wildly bullish and sets the expectation bar too high for corporate America to hurdle itself over. Early readings show this is not a great risk at this point, but it continues to tick higher.
2) Stimulus, stimulus, stimulus.
There is little doubt that the greatest mean reversion in modern economic times has been largely due to government stimulus. The bank bailouts, housing bailouts/stimulus and auto bailouts all helped stop the bleeding during a time when the economy appeared to be on its deathbed. Unfortunately, government spending isn’t the path to prosperity and the private sector will be forced to pick up the slack sooner rather than later. 2010 is likely to largely hinge on this transition. The government will begin to sap the economy of its massive stimulus as the year drags on and with that comes increased risks that the equity markets will struggle on without big brother’s aid.
3) Anything China
China has grown to become the hope of the global economy. With their booming growth, growing consumerism, and fiscal prudence, China is the envy of the economic world. The rally…
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MERRILL LYNCH’S BULLISH 2010 OUTLOOK – A BUBBLE IN PESSIMISM
by ilene - December 15th, 2009 1:09 pm
This "pessimism bubble" idea seems a bit Orwellian, but part of its beauty is that it’s invisible from the inside. – Ilene
MERRILL LYNCH’S BULLISH 2010 OUTLOOK – A BUBBLE IN PESSIMISM
Courtesy of The Pragmatic Capitalist
We are just about finished wrapping up our series on 2010 outlooks. In this article we’ll outline Bank of America Merrill Lynch. Bank of America Merrill Lynch is very bullish heading into 2010 (an outlook similar to RBC). They see many of the trends of 2009 continuing into 2010 and driving equity markets around the world higher by double digits (see JP Morgan’s bullish emerging market outlook here). Ethan Harris, head of North American economics summarized the Merrill outlook:
“We believe the global economy will gather momentum in 2010. We think that the unprecedented mix of near-zero interest rates and high budget deficits will engineer an economic recovery that is real and sustainable. We aren’t forecasting a swift return to robust growth. In fact, the recovery will likely lag behind those of previous recessions – but we believe that the world economy will perform far better than the economic consensus would indicate.”
This macro outlook is underpinned by a number of variables:
- Global growth will be 4.4%, Chinese growth will be 10.1% and U.S. growth will be 3.2% – all above 2010 consensus estimates.
- Inflation will remain benign.
- U.S. stocks will rise 15% led by strong growth in global cyclical sectors – tech, energy, industrials and materials. Financials are also expected to perform well as the yield curve remains conducive to strong earnings.
- The MSCI All-Country World Index will rise 20 percent.
- Gold and oil will both continue to rally as strong demand from foreign investors remains the primary driver. Gold will breach $1,500 and oil will surpass $100.
- Government bonds will perform poorly.
- The Dollar & Yen will rally against the Euro.
Merrill also notes 10 key investment themes for 2010. From PR Newswire:
10 Investment Themes for 2010
- Government Balance Sheet Risk: The soaring U.S. budget deficit and a Chinese currency revaluation will drive 10-year U.S. Treasury yields above 4 percent by year-end 2010. Shorter-duration Treasuries and U.S. investment-grade corporate credit are less susceptible to such risks.
- Rising Taxation: The
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LOOKING FORWARD TO 2010. OR IS IT 2004 ALL OVER AGAIN?
by ilene - November 24th, 2009 10:11 am
LOOKING FORWARD TO 2010. OR IS IT 2004 ALL OVER AGAIN?
Courtesy of The Pragmatic Capitalist
It’s easy for forecasters and amateur statisticians to draw future market conclusions based on select past performance. At every twist and turn of the credit crisis investors have compared and contrasted the current recession with those of the past. In a recent research report Goldman Sachs goes into the many similarities between 2003 and 2009 and the potential for 2010 to mirror 2004. Goldman notes:
As the macro data flow has slowed to a trickle, the weight of the evidence still points to continued, but gradual, improvement. And beyond the data momentum, financial conditions remain supportive for equity risk generally, and for our tactical long positions as well. 2004 contained many similar challenges to what we face on the cusp of 2010: waning cyclical momentum, fiscal drag and exit policy fears.
Based on these similar macro themes Goldman draws some conclusions as to how to play the potential 2010 outcome based on the performance of various asset classes in 2004:
Clear direction emerges earlier in sectors and macro themes relative to the index. Cyclical sectors, and not defensives, were still the right places to be long in 2004, the energy sector was a clear relative outperformer from early in the year, and cyclical macro tilts such as Growth and CHICON
break out on the upside from mid-2004. But in most cases, the overall returns over the year are in modest single digits with several intra-year ups and downs. If next year is anything like 2004 in this respect, then timing entries and exits nimbly will be as important as identifying the right places to be long and short.
For those that remember, 2004 was an extraordinarily mundane year for equities following the excitement of 2003. Volatility slowed to a trickle and equity returns were closer to the historical norm. Goldman believes this, combined with a weaker economy, will make for a much more challenging investing environment:
But in each case, the overall returns over the year are in modest single digits with several intra-year ups and downs. If next year is anything like 2004 in this respect, then timing entries and exits nimbly will be as important as identifying the right
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site