Economic Recovery: Profits From Overseas Ops Double Fed Ex 1st Qtr Profit – 1700 American Workers To Be Laid Off

FedEx 1Q profit doubles; will cut 1,700 jobs

FedEx Corp. indicated Thursday that the global economic recovery remains uneven. It touted strength in its international shipping operations while moving to fix the weak spot in its business: its money-losing U.S. trucking business.

FedEx did raise its financial outlook for the full fiscal year after its first-quarter net income doubled. But the projections for the second quarter and full year fell shy of Wall Street expectations, and the stock dropped almost 3 percent in premarket trading.

Growth in international air shipments has been driving FedEx’s results lately. That continued in the first quarter. But the FedEx Freight segment lost money again as demand for large items like refrigerators and other appliances continues to be weak. As it competes with other trucking companies to ship a limited amount of freight, FedEx has been forced to forgo the rate increases that are helping its other segments grow.

FedEx will combine its FedEx Freight and FedEx National less-than-truckload operations on Jan. 30, closing 100 facilities and cutting 1,700 workers. FedEx says the move, along with other cost cuts, will ensure the trucking business is profitable next year.

Less-than-truckload shippers take goods from many different manufacturers and consolidate them into a single truck for delivery.

The move suggests that big companies like FedEx, which is a bellwether for broader economic health, are feeling that the global economy still has a way to go for a full recovery.

The world’s second-largest package delivery company now expects to earn between $1.15 and $1.35 per share for the quarter ending in November, below analysts’ expectations of $1.36 per share.

For the full fiscal year that ends in May, the company now expects net income of $4.80 to $5.25 per share. That’s up from its estimate of $4.60 to $5.20 per share in July but some analysts were forecasting earnings as high as $5.60 per share, according to Thomson Reuters.

The Memphis, Tenn., company earned $380 million, or $1.20 per share in the fiscal first-quarter that ended in August, compared with $181 million, or 58 cents per share a year ago. That’s slightly under the $1.21 per share that Wall Street expected.

The reinstatement of some employee compensation programs, higher pension, medical and aircraft maintenance expenses, and a loss at FedEx Freight countered improvements at its Express and Ground operations.

Revenue rose 18 percent to $9.46 billion.

FedEx shares fell 2.9 percent to $83.45 in premarket trading.

http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=b4534970

McAuleys World Comments:

This article is all about what Clinton Labor Secretary Robert Reich would call “The Great Decoupling of Corporate Profits from Jobs”… search for Reich’s article of that name.
Reports of quarterly profits by multinational corporations and a “phantom” recovery in the DJIA is an unreliable indicator of an American economic recovery… the record profits being reported by many DJIA companies have nothing to do with American business operations … Fed Ex being the latest example … There is nothing wrong with Fed Ex or GM posting a profit from overseas operations … the problems arise when the politicos and the press try to claim an “American Recovery” based on business growth in Red China or the Far East … or to claim an American Recovery, that is not only “jobless”, but is based on policies that continue to ship American Jobs and manufacturing capacity overseas ….
Even Clinton’s Labor Secretary Reich noted that $30 billion of the GM “bailout” went to create jobs in Red China before he stated, “GM officials say no American taxpayer money is being used to expand in China. But money is fungible. Because of our generosity, GM can now use the dollars it doesn’t have to spend in the United States meeting its American payrolls and repaying its creditors, for new investments in China.”
Reich went on to say, “GM now sells more cars in China than it does in the US, but makes most of them there. The company now employs 32,000 hourly workers in China. But only 52,000 GM hourly workers remain in the United States – down from 468,000 in 1970.”
My research would indicate that GM now employees 40,000 in China and 48,000 in America. By 2012 GM will employ more people in China than in the US – what are the implications for GM’s pension and medical fund liabilities …
Since Reich’s article was published GM has transferred control of GM-China to the Chinese Government for a 1 time payment of $85 million dollars, shielding any of the GM/China profit from American Taxation …
Profits are not “evil” they are the reason a Company exists … however, quarterly profit announcements are not a reliable indication or “bell weather” of how the US economy has rebounded …
We need to re-examine Governmental policies and stewardship that allows $30 billion dollars of taxpayer money, money intended to “stimulate” the American economy and create American jobs, to be used to expand auto production in China … and then have the Government’s handpicked GM leadership team transfer control of a $30 billion dollar investment for a single $85 million dollar payment from the Chinese Government … GM will sell 2 million cars in China in 2010, GM transferred control of it’s Chinese operations, in perpetuity, for the price of $42.50 per 2010 unit …

STOCK MARKET RECOVERY? Beware Of The Zombie Stocks – Brisk Trading In Companies That Are Worthless

 WASHINGTON — Investors are still trading common shares of Fannie Mae, Freddie Mac and American International Group Inc. by the billions, even though analysts say their prices are almost certain to go to zero. 

All three are majority-owned by the government and are losing huge sums of money. The Securities and Exchange Commission and other regulators lack authority to end trading of stocks in such “zombie” companies that technically are alive — until the government takes them off life support.

Shares of the two mortgage giants and the insurer have been swept up in a rally in financial stocks. Investors have been trading their shares at abnormally high volumes, despite analysts’ warnings that they’re destined to lose their money.

“People have done well by trading them [in the short term], but when it gets to the end of the road, these stocks are going to be worth zero,” said Bose George, an analyst with the investment bank Keefe, Bruyette & Woods Inc.

Some of the activity involves day traders aiming to profit from short-term price swings, George said. But he said inexperienced investors might have the false impression that the companies may recover or be rescued.

“That would be kind of unfortunate,” he said. “There could be a lot of improvement in the economy, and these companies would still be worth zero.”

The government continues to support the companies with billions in taxpayer money, saying they still play a crucial role in the financial system.

Fannie and Freddie buy loans from banks and sell them to investors. They have tapped about $96 billion out of a potential $400 billion in aid from the Treasury Department.

Officials have said AIG’s failure would be disastrous for the financial markets. The Treasury and the Federal Reserve have spent about $175 billion on AIG and AIG-related securities. The company also has access to $28 billion from the $700 billion financial industry bailout.

But analysts say the wind-down strategies for the companies are almost sure to wipe out any common equity. The shares would be worthless.

“There are some folks that believe that somehow that 20 percent [of the stock] that’s out there in the public market might be worth something someday,” said Daniel Alpert, managing director of the investment bank Westwood Capital LLC. The three companies are doomed because they are “massively indebted,” and the values of their assets are declining, Alpert said.

The stocks remain in circulation mainly for two reasons: They’ve violated no rules on the New York Stock Exchange, where they are traded. And no regulator has the power to halt their trading without evidence that securities laws are being violated.

Alpert said no regulations exist to deal with cases where the government props up unsustainable companies.

By contrast, regulators were able to warn investors about stock in the “old” General Motors, which also sits on a mound of government debt. The SEC and the Financial Industry Regulatory Authority, the brokerage industry’s self-policing group, have issued alerts and taken other steps to prevent investor losses on that stock.

In that case, the SEC could act because GM acknowledged the stock was headed for zero in a restructuring plan filed with the SEC.

Shares of Fannie, Freddie and AIG — along with their trading volumes — have jumped this summer, when activity normally fades as traders take vacations. Fannie shares have more than tripled since the end of July. Their volume soared from 6.45 million shares on the last day of July to 470 million shares per day in mid September.

Freddie and AIG shares have surged threefold since then. Freddie’s volume jumped to 169 million shares from 4.5 million. And 27 million AIG shares changed hands on mid september days, compared with 5 million on July 31.

By comparison, the trading volume of General Electric Co.’s common shares fell to around 66 million shares per day in mid September, compared with 109 million shares July 31. The stock price rose 5.3 percent in that stretch.

http://www.delawareonline.com/article/20090828/BUSINESS/908280321/1003/rss01/-Zombie-stocks–trading-briskly

http://articles.moneycentral.msn.com/Investing/CompanyFocus/4-zombie-stocks-better-off-dead.aspx

Dow ends best 6 weeks since 1938: 1938 – “The Rest Of The Story”

Dow ends best 6 weeks since 1938

Stocks rose on Friday, with the Dow scoring its biggest six-week gain since July 1938, helped by a reassuring report on the mood of consumers and stabilization in General Electric (GE.N) and Citigroup’s (C.N) quarterly results.

The Dow is up 22.7 percent over the past six weeks, making this the largest six-week gain since July 29, 1938.

http://www.nyse.tv/dow-jones-industrial-average-history-djia.htm

As famed commentator Paul Harvey would have said, “and now for the rest of the story”.

The year 1938 was a year during the “Great Depression”. 1938 did not signal the end of the “Great Depression”. The “Great Depression” lasted ” 4 more years” after 1938, not ending until 1942.

How did the ”stock market” fare during the Great Depression? In 6 of the 11+ years of the Great Depression the “Stock Market” closed up despite the fact that unemployment continued to rise, home foreclosures hit all time highs and thousands of businesses and farms were lost.

Following the 1938 “bounce” in the DJIA, the “stock market” closed down for 4 straight years. The Market was down in 1938 – 1939, 1939 – 1940, 1940 – 1941 and 1941 – 1942. During that time period the DJIA lost nearly 25% of its value. In fact, the DJIA closed lower in 1942 than it did in 1937. http://www.nyse.tv/dow-jones-industrial-average-history-djia.htm

Economists note that these years of the “Great Depression”, 1939 -1942, followed the implementation of FDR’s “New Deal” and that the “New Deal” may have, in fact, caused this, the second half, of the Great Depression”. (New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America,  by Burton W., Jr. Folsom, http://www.amazon.com/New-Deal-Raw-Economic-Damaged/dp/1416592229 )

This writer is hoping an economic recovery is underway, however, that is not what the data suggests. As you can see, the DJIA, does not necessarily reflect the direction of  economic activity – the DJIA can register gains while the “economy” slips futher into a “Great Depression” or, in other words, Government bailout programs can make the politically connected extremely rich while the Country, as a whole, slips below water.

April 2009 unemployment continues to climb at 600,000 + per week. Unemployment, with the addition of the newly unemployed in April 2009,  is now above 9%, nearly one full percentage point above the Obama Administration’s “worse case estimate” for a “maximum unemployment figure” of 8.1% in 2009. Economists are now examining whether unemployment will top 11% before year end, 40% higher than the Administration’s forecast.  http://www.bls.gov/news.release/pdf/empsit.pdf  Between January of 2004 and January of 2008 unemployment in the US averaged 4.5%. 1/2 the current rate. Twice that number of people are currently unemployed and the fact that the unemployment number will continue to rise is undisputed. There are no (zero) projections that the US unemployment rate will return to a 4.5% rate prior to 2017, a full 8 years from now.  

Despite the moratorium on “Mortgage Foreclosures”, March 2009 foreclosures were 46% above March 2008 figures. Fannie & Freddie’s moratorium on foreclosures ended on March 31st 2009, so this increase occurred prior to the moratorium’s expiration. A huge backlog of foreclosures were placed on “hold” and will now move forward.  In many parts of the Country “housing surpluses” will take 4 to 7 years to be absorbed. Reaching a floor in the housing market is years off. Maybe 5 years off, if we pursue the correct policies and restore confidence in  American mortgage backed securities and the international investment community commits to investing in those “derivatives” once again.   http://www.mlive.com/business/index.ssf/2009/04/us_foreclosures_up_24_percent.html http://www.idahobusiness.net/archive.htm/2009/04/08/Foreclosures-up-again-in-March

New home starts are way down. New single family home starts for March 2009 are 45% lower than March 2008. http://redfishemergingmarkets.com/blog/2009/04/16/housing-starts-are-still-anemic-anybody-surprised-at-the-data/

March 2008 was a very bad year in it’s own right. Housing starts will need to increase 500% before reaching the levels seen in 2005. http://www.reedconstructiondata.com/news/2008/08/residential-construction-near-bottom-but-still-declining/

In March 2009 there was nearly 1 home foreclosure for every new home start. http://redfishemergingmarkets.com/blog/2009/04/16/housing-starts-are-still-anemic-anybody-surprised-at-the-data/

Auto sales remain down, despite dishonest claims to the contrary. March 2008 to March 2009 auto sales are down an additional 40%. http://money.cnn.com/2009/03/26/autos/jd_power_march_sales/index.htm . February 2008 to February 2009 auto sales were also down, almost 50%. http://www.thegreenmotorist.com/index.php/february-2009-auto-sales-down-yet-again/ . March 2008 auto sales figures were no reason for optimism. Even if sales figures should suddenly leap “up to” 2008 sales levels, one needs to recall that 2008 sales figures were dismal in there own right and were down 20% from 2007 sales levels. GM’s sales volumes in 2007 were 40% less than in 2006. Current auto sales levels will need to triple to catch back up with the “profitable” levels of 2006. After “special items” GM only lost $2 Billion in 2006. http://jalopnik.com/cars/breaking-gm-finally-releases-2006-financial-results-showing-profits-and-notsomuch-profits-244072.php

The current cause for “economic optimism”?  Two banks reported “profits” at the end of the first quarter. What do the bank’s financial numbers mean? Where did the profits come from? Who really knows?

Both “banks” received Billions in bailout funds that have not been repaid. Despite promises of “transparency” the Government’s Stress tests formulas are a secret and the “formula” applied changes from bank to bank. The “stress test” results are also being kept secret. Who passed? Who failed? Who knows? What transparency!

The recent “mark to market” accounting changes are a sham. There is no way for the public to know exactly what a banks exposure to toxic mortgages are, nor can the public determine how the bank is evaluting those assets or exposures. Isn’t this is exactly how we got into this mess in the first place, financial institutions overstating the value of their investments in Mortgage backed securities?

See: http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/a-bear-rally-in-bulls-clothing.aspx   “Money printing plus imagination are potent forces that can’t solve our problems but can affect the stock market in such a way as to make it appear that the worst has passed.”

The recent accounting changes allow banks to evaluate the same piece of property differently, depending on how the bank chooses to classify the property. If a property or asset is to be put up for sale in the near future, the expected sale price is to be used. If the property is to be held for a longer period of time, the anticipated value at the time of sale can be used. How can the public discern whether a piece of property or asset currently valued at $1,000,000, doesn’t in fact have a “real” current value of $10,000. The bank, when it cannot sell the property for $1 Million, simply changes the “asset classification” to a long term hold rather than calling the property what it is, an overvalued piece of realestate with a $1 Million asking price and a current $10,000 value.

Is TALF responsible for the Bank’s stated profits, profits made at taxpayer expense? Who knows? http://www.businessinsider.com/how-banks-and-hedge-funds-will-scam-the-talf-2009-3 Are these profits a sign of economic improvement or a sign of the fleecing of America?

Had the Government allowed this sham, the change in accounting practices,  months ago, the Financial Institutions bailout would not have been necessary.

Nothing has changed in terms of the availability of “zero down” mortgages or the “Liar” or “Ninja” loans. The actions of Congress and the Boston Federal Reserve still stand, nothing has been repealed or revoked. Now those without a “down payment” can acquire their “down payment” through the use of a “second mortgage” where the “downpayment” is funded through a “second mortgage” or other “give away programs” intended to create the illusion that a purchaser has a “down payment”. http://www.mhdc.com/homes/down_payment_assistance/index.htm , http://www.ehow.com/how_4492950_through-zero-down-payment-loophole.html (An ACORN Scam),  http://www.collinsdevelopment.com/home-buying/mortgage-down-payment.php .

The “leveraging” in the US banking system remains unchanged. Certain US banks are still permitted to “leverage” up to 40%. http://www.startribune.com/business/41611927.html?elr=KArks:DCiU1OiP:DiiUiD3aPc:_Yyc:aUU  The “dangers” of leveraging, another lesson that went “unlearned” from the “Great Depression”.

The Government TALF Program even encourages the Hedge Funds and Banks to “leverage up” at taxpayer expense. http://www.businessinsider.com/how-banks-and-hedge-funds-will-scam-the-talf-2009-3  Do these Bank and Hedge Fund profits signal economic recovery or are they simply derived from looting “taxpayer” provided funds.

Beware the “false recovery”. Many things can be learned from the 1938 “bounce” in the DJIA. One of those things is that the “1938 Bounce” did not signal an economic recovery. That recovery was 4 long years away.

Signs of a pending economic recovery in 2009 are few and far between. Next to nothing has been done to prevent a repeat of the current crisis. The Government, Regulatory Agencies and Financial Institutions are busy cooking with the old recipe.  

Don’t delude yourself, when clear thinking is needed.

The ship may be sinking at a slower rate, but the ship is still sinking. The time to call the orchestra on deck and dance has not arrived. It is time to man the buckets and bail like crazy.

For a technical analysis of the Market Recovery in 1929 – 1930 and how Federal Reserve Interest Rate moves affected the Great Depresssion see:  http://www.ameinfo.com/16529.html

BEAR MARKET RALLY – Definition and Chart Examples: http://www.mysmp.com/stocks/bear-market-rally.html ; “After a move up of 20% to 35% off the bottom, the market begins to stall out”.

Beware The False Economic Recovery – 1938, The Rest Of The Story: Dow ends best 6 weeks since 1938

You may have seen the following headline and story:

Dow ends best 6 weeks since 1938 on econ hopes

Stocks rose on Friday, with the Dow scoring its biggest six-week gain since July 1938, helped by a reassuring report on the mood of consumers and stabilization in General Electric (GE.N) and Citigroup’s (C.N) quarterly results.

The Dow is up 22.7 percent over the past six weeks, making this the largest six-week gain since July 29, 1938.

http://www.nyse.tv/dow-jones-industrial-average-history-djia.htm

As famed commentator Paul Harvey would have said, “and now for the rest of the story”.

The year 1938 was a year during the “Great Depression”. 1938 did not signal the end of the “Great Depression”. The “Great Depression” lasted ” 4 more years” after 1938, not ending until 1942.

How did the “stock market” fare during the Great Depression? In 6 of the 11+ years of the Great Depression the “Stock Market” closed up despite the fact that unemployment continued to rise, home foreclosures hit all time highs and thousands of businesses and farms were lost.

Following the 1938 “bounce” in the DJIA, the “stock market” closed down for 4 straight years. The Market was down in 1938 – 1939, 1939 – 1940, 1940 – 1941 and 1941 – 1942. During that time period the DJIA lost nearly 25% of its value. In fact, the DJIA closed lower in 1942 than it did in 1937. http://www.nyse.tv/dow-jones-industrial-average-history-djia.htm

Economists note that these years of the “Great Depression”, 1939 -1942, followed the implementation of FDR’s “New Deal” and that the “New Deal” may have, in fact, caused this, the second half, of the Great Depression”. (New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America,  by Burton W., Jr. Folsom, http://www.amazon.com/New-Deal-Raw-Economic-Damaged/dp/1416592229 )

This writer is hoping an economic recovery is underway, however, that is not what the data suggests. As you can see, the DJIA, does not necessarily reflect the direction of  economic activity – the DJIA can register gains while the “economy” slips futher into a “Great Depression” or, in other words, Government bailout programs can make the politically connected extremely rich while the Country, as a whole, slips below water.

April 2009 unemployment continues to climb at 600,000 + per week. Unemployment, with the addition of the newly unemployed in April 2009,  is now above 9%, nearly one full percentage point above the Obama Administration’s “worse case estimate” for a “maximum unemployment figure” of 8.1% in 2009. Economists are now examining whether unemployment will top 11% before year end, 40% higher than the Administration’s forecast.  http://www.bls.gov/news.release/pdf/empsit.pdf  Between January of 2004 and January of 2008 unemployment in the US averaged 4.5%. 1/2 the current rate. Twice that number of people are currently unemployed and the fact that the unemployment number will continue to rise is undisputed. There are no (zero) projections that the US unemployment rate will return to a 4.5% rate prior to 2017, a full 8 years from now.  

Despite the moratorium on “Mortgage Foreclosures”, March 2009 foreclosures were 46% above March 2008 figures. Fannie & Freddie’s moratorium on foreclosures ended on March 31st 2009, so this increase occurred prior to the moratorium’s expiration. A huge backlog of foreclosures were placed on “hold” and will now move forward.  In many parts of the Country “housing surpluses” will take 4 to 7 years to be absorbed. Reaching a floor in the housing market is years off. Maybe 5 years off, if we pursue the correct policies and restore confidence in  American mortgage backed securities and the international investment community commits to investing in those “derivatives” once again.   http://www.mlive.com/business/index.ssf/2009/04/us_foreclosures_up_24_percent.html http://www.idahobusiness.net/archive.htm/2009/04/08/Foreclosures-up-again-in-March

New home starts are way down. New single family home starts for March 2009 are 45% lower than March 2008. http://redfishemergingmarkets.com/blog/2009/04/16/housing-starts-are-still-anemic-anybody-surprised-at-the-data/

March 2008 was a very bad year in it’s own right. Housing starts will need to increase 500% before reaching the levels seen in 2005. http://www.reedconstructiondata.com/news/2008/08/residential-construction-near-bottom-but-still-declining/

In March 2009 there was nearly 1 home foreclosure for every new home start. http://redfishemergingmarkets.com/blog/2009/04/16/housing-starts-are-still-anemic-anybody-surprised-at-the-data/

Auto sales remain down, despite dishonest claims to the contrary. March 2008 to March 2009 auto sales are down an additional 40%. http://money.cnn.com/2009/03/26/autos/jd_power_march_sales/index.htm . February 2008 to February 2009 auto sales were also down, almost 50%. http://www.thegreenmotorist.com/index.php/february-2009-auto-sales-down-yet-again/ . March 2008 auto sales figures were no reason for optimism. Even if sales figures should suddenly leap “up to” 2008 sales levels, one needs to recall that 2008 sales figures were dismal in there own right and were down 20% from 2007 sales levels. GM’s sales volumes in 2007 were 40% less than in 2006. Current auto sales levels will need to triple to catch back up with the “profitable” levels of 2006. After “special items” GM only lost $2 Billion in 2006. http://jalopnik.com/cars/breaking-gm-finally-releases-2006-financial-results-showing-profits-and-notsomuch-profits-244072.php

The current cause for “economic optimism”?  Two banks reported “profits” at the end of the first quarter. What do the bank’s financial numbers mean? Where did the profits come from? Who really knows?

Both “banks” received Billions in bailout funds that have not been repaid. Despite promises of “transparency” the Government’s Stress tests formulas are a secret and the “formula” applied changes from bank to bank. The “stress test” results are also being kept secret. Who passed? Who failed? Who knows? What transparency!

The recent “mark to market” accounting changes are a sham. There is no way for the public to know exactly what a banks exposure to toxic mortgages are, nor can the public determine how the bank is evaluting those assets or exposures. Isn’t this is exactly how we got into this mess in the first place, financial institutions overstating the value of their investments in Mortgage backed securities?

The recent accounting changes allow banks to evaluate the same piece of property differently, depending on how the bank chooses to classify the property. If a property or asset is to be put up for sale in the near future, the expected sale price is to be used. If the property is to be held for a longer period of time, the anticipated value at the time of sale can be used. How can the public discern whether a piece of property or asset currently valued at $1,000,000, doesn’t in fact have a “real” current value of $10,000. The bank, when it cannot sell the property for $1 Million, simply changes the “asset classification” to a long term hold rather than calling the property what it is, an overvalued piece of realestate with a $1 Million asking price and a current $10,000 value.

Is TALF responsible for the Bank’s stated profits, profits made at taxpayer expense? Who knows? http://www.businessinsider.com/how-banks-and-hedge-funds-will-scam-the-talf-2009-3 Are these profits a sign of economic improvement or a sign of the fleecing of America?

Had the Government allowed this sham, the change in accounting practices,  months ago, the Financial Institutions bailout would not have been necessary.

Nothing has changed in terms of the availability of “zero down” mortgages or the “Liar” or “Ninja” loans. The actions of Congress and the Boston Federal Reserve still stand, nothing has been repealed or revoked. Now those without a “down payment” can acquire their “down payment” through the use of a “second mortgage” where the “downpayment” is funded through a “second mortgage” or other “give away programs” intended to create the illusion that a purchaser has a “down payment”. http://www.mhdc.com/homes/down_payment_assistance/index.htm , http://www.ehow.com/how_4492950_through-zero-down-payment-loophole.html (An ACORN Scam),  http://www.collinsdevelopment.com/home-buying/mortgage-down-payment.php .

The “leveraging” in the US banking system remains unchanged. Certain US banks are still permitted to “leverage” up to 40%. http://www.startribune.com/business/41611927.html?elr=KArks:DCiU1OiP:DiiUiD3aPc:_Yyc:aUU  The “dangers” of leveraging, another lesson that went “unlearned” from the “Great Depression”.

The Government TALF Program even encourages the Hedge Funds and Banks to “leverage up” at taxpayer expense. http://www.businessinsider.com/how-banks-and-hedge-funds-will-scam-the-talf-2009-3  Do these Bank and Hedge Fund profits signal economic recovery or are they simply derived from looting “taxpayer” provided funds.

Beware the “false recovery”. Many things can be learned from the 1938 “bounce” in the DJIA. One of those things is that the “1938 Bounce” did not signal an economic recovery. That recovery was 4 long years away.

Signs of a pending economic recovery in 2009 are few and far between. Next to nothing has been done to prevent a repeat of the current crisis. The Government, Regulatory Agencies and Financial Institutions are busy cooking with the old recipe.  

Don’t delude yourself, when clear thinking is needed.

The ship may be sinking at a slower rate, but the ship is still sinking. The time to call the orchestra on deck and dance has not arrived. It is time to man the buckets and bail like crazy.

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