Dow closes over 9000 for the first time in almost a year...

[Vic]

There is the possibility of recovery. I won't count it out. Saying that unemployment is too high would not be a correct statement. Unemployment is a trailing indicator. As the economy turns down, employers postpone layoffs for as long as possible in hopes that the downturn will be mild or short. As the economy comes back up, employers wait to re-hire for fear that the upturn does not pan out or ends up not being robust.
There is good news and bad news out there. Early summer is typically a good time. People are out shopping in good weather, business is up, the sun brings back good spirits, etc. The question is: will it last? Early fall, particularly October, is always the worst time for the market. Can we power through? Or will it fizzle? No one knows.

 

[charrison]

Originally posted by: Vic
There is the possibility of recovery. I won't count it out. Saying that unemployment is too high would not be a correct statement. Unemployment is a trailing indicator. As the economy turns down, employers postpone layoffs for as long as possible in hopes that the downturn will be mild or short. As the economy comes back up, employers wait to re-hire for fear that the upturn does not pan out or ends up not being robust.
There is good news and bad news out there. Early summer is typically a good time. People are out shopping in good weather, business is up, the sun brings back good spirits, etc. The question is: will it last? Early fall, particularly October, is always the worst time for the market. Can we power through? Or will it fizzle? No one knows.

In July there is going to $400 per child tax credit being refunded, this should give the economy a nice little bump. Most tax brackets will get a 2% marginal cut as well, this should help keep money in the economy.

 

[KenGr]

Originally posted by: Vic

Originally posted by: FallenHero
The US rates unemployment differently than the other nations of the world. If you are active in searching for a job, and dont have one, you are unemployed. If you are not searching, and do not hold a job, you are not unemployed. I think there are also other exceptions to the unemployment rate in the US

This is true. The modern US way of caculating unemployment makes it artificially low. Other exceptions are if you are on public assistance, receiving social security (yet younger than 62) and/or disability, did not file for unemployment, or are in prison/jail (which is 2.5 million people). Essentially, the only people who are considered "unemployed" by the Dept of Labor are those who are actually collecting unenjoyment checks.

This is a commonly held understanding but it is absolutely false. Here is a link to the Bureau of Labor Statistics which provides insight into the definition of unemployment:

BLS Definitions

Essentially the Labor Force does not include people under 16, does not include people in prison or mental institutions and does not include the military.

To be counted as unemployed, you must not be working, must be available for work, and must have made some effort to find work within the last month. It is based on a survey of 50,000 households. It has nothing to do with unemployment claims or collection of unemployment benefits. If you are collecting social security but actively looking for work, you are unemployed no matter what your age is. The major criticisms of the numbers is that it doesn't count people so discouraged (or so lazy) they have not looked for a job in over a month. It also probably counts as unemployed those involved in illegal or "off the books" occupations.


I'm not sure how it is determined in other countries but my understanding is that the process is relatively uniform. I will probably try to research that when I get some time.

 

[SP33Demon]

Originally posted by: jeremy806
I mentioned this in a different thread but it seems to fit here.

Well, I for one do not see a good future in stocks at the moment. This is a wishful thinking rally. I do not know what world other investors live in, but in my world unemployment is high and jobs are hard to come buy, tons of people and companies are buried in debt, deficits are higher then ever and after funding the Iraq occupation I may be using $1 bills as toliet paper because of hyper inflation. To make matters worse, the Fed continues to lower interest rates preventing any deflation. Say what you want about deflation fears, but the effects of falling prices in rough times like these would do much more good than harm.

So, I see the Dow losing 1000 before the year is over.

On a final note, for those that hand pick stocks, there are always winners out there if you can find them.

jeremy806

Well said.