the yank market is getting hammered, page-9

copied from:http://moneycentral.msn.com/community/message/board.asp?Board=SquawkBox

I had the fortune of meeting David Faber, while out at eBay HQ last week. I was able to give him my take on the economy.

I have to tell you, the media has the majority of people duped. This economy is NOT recovering. I am a CPA working on the front lines with people doing their tax returns and with small businesses. In many respects I have never seen things this bad. Here is what I can tell you from my view of the northeast US at least.

1) The average guy is hurting. Whatever small tax cut they received is more than made up for by higher prices for gas, oil and relatedly pretty much everything else out there.

2) The average family has borrowed a LOT against their home to replace lost income, jobs etc.

3) Sample situation. Someone works for a company making 90k a year. He is going to lose his job, finds work at another company for 40k a year. He is not counted as unemployed, but counted as a "new job created" , even though his salary went down 50%.

4) The labor statistics do not count people that eventually gave up trying to get a job.

5) In past recessions, people were cut back , and jobs were lost, as the economy recovered, jobs growth was intense and in areas where good paying jobs were available. Now, as a result of structural trends towards outsourcing, hundreds of thousands of jobs are no longer around. While businesses recover some, there is anemic job growth in most high paying areas.

6) We have a record budget deficit

7) We have record Oil prices and a record Trade Deficit.

8) Real Estate is starting to level off and decline in many areas.

9) There is an odd trend going on towards early retirement to avoid new contracts that do away with retiree medical benefits. Soon there will be a whole class of people without any retirement benefits.

10) CNBC might have lower ratings lately because many "day traders" got whiped out over the last few years. I know, I did many tax returns for people looking to get rich that got wiped out. The show doesnt appeal to the average American that barely has money to pay bills , let alone invest much.

11) While I really like the crew on Squawk Box, I think part of the problem with media people these days is they make so much money that they are isolated from what the real people are going through out there.

Did you ever wonder how so many people got sold this bill of goods on the "economic recovery" ? Doesnt it seem odd to you that before the Iraq war and our actions in Afghanistan the price of oil was 12 dollars a barrel. If you buy the line that these people were threats, then with the threat gone the threat premium should have allowed prices to fall, why do they rise 4 fold?? Does that make sense to you?

So who is doing well? The super rich! Stores that cater to the super wealthy, a dress shop in NYC that sells 10k dresses had a record year, and anyone with super high income is floating in cash right now.

I have nothing against the rich getting richer, or getting a tax cut, but I wish someone would wake these yahoos up before its too late. You cant have your cake and eat it too.

In my opinion, this economy is trying to perform a difficult balancing act and might be ready to fall off a cliff, with rising interest rates being perhaps the final nail.

Marty