untoward friday, page-130

barnsty, interesting you mention QE2 would be good for stocks. My opinion is it would possibly spike the market and then come crashing down not too long after.

It's debatable what impact the previous stimulus had on markets rising. In 1929 there was a credit crunch which caused markets to fall 50%. The next year markets rose sharply but there was no TARP back then.

US spent trillions to try and prop up the market, has it really done a good job? do you think they will just keep printing? If they do the positive effect will be very short lived but the long term pain will just get worse. smart money will know this. Probably see the market rise and then the retail investors get hammered a short time later by the big boys in another "flash crash"

You see they can print all they want but they cannot force consumers to spend if they don't want to and that's where the problem lies, consumer sentiment. Consumers are borrowing less. Only last night the Consumer Credit m/m came out to be -1.3B while -5.2B was expected, thats a massive difference. A sign that consumers are ultra conservative.

So if Congress or the Fed or whoever want to bring out QE2 I doubt it will change much, because they cannot force people to take on more debt.

Oh and the UNOFFICIAL Unemployment rate of 9.5% is an absolute joke. Anyone want to have a guess how many people are not counted in the participation rate?

In July alone 2.6m people were not counted as unemployed because they didn't look for work in the previous 4 weeks preceeding the BLS report. Here's what's even more alarming, what would you expect the unemployment rate to be if it included;

- all the people that wanted a job but gave up
- all the people with part-time jobs that want fulltime jobs
- people who dropped off the unemployment rolls because their unemployment benefits ran out

Well the figure is a staggering 16.5%. Imagine how the market would have responded if that had of popped up last night. Most people would have looked at the result and said "oh it hasn't changed" well that's a joke.

So we have consumer sentiment going down, credit spending falling alarmingly but the unemployment rate staying the same...hahahahahahah sorry I had to laugh. Do you think the extra 7% of the population are just going to go out and splurge if there was some QE2 introduced? absolutely not because the goverment cannot control the consumers and force them to change their attitudes and spend when they can see that the economy look bleak.

All the signs are showing a slow down and people will be looking for the Fed or govt to stimulate the economy. These people should be careful what they wish for because it just adds to the debt of the US that is already at record levels.

2 year Treasury yields drop below 0.5%...FIRST TIME EVER.
Unlike the stock market this is a market that's not manipulated easy. So why are people flocking to Treasuries at record low yields? Now what do you think will happen to the stock market?

I'll let you decide.

http://globaleconomicanalysis.blogspot.com/2010/08/two-year-treasury-yields-drop-below-5.html

I've attempted to upload the table showing the unemployment rate of 16.5%, hope it has worked, otherwise find it in the link.

Source of this data http://globaleconomicanalysis.blogspot.com/2010/08/jobs-decrease-by-131000-rise-by-12000.html