Dow and S&P 500: Is 2009 a Redux of 1938 and 1939? Powerful Spring through Summer Rallies. Market on Track for best Month in Decades.
The recent market rally is going down in the record books. The S&P 500 is up 21 percent in a matter of 3 weeks, which is one of the strongest short-term rallies in the books. In fact, we are on track for our best month since 1987. Yet this rally has the ominous signs of a short-term spring and summer rally that may fizzle out later. Two other years that had strong spring and summer rallies occurred during the Great Depression. With the U.S. Treasury and Federal Reserve flooding the entire system with money and throwing the long-term security of our dollar aside, the system was bound to react even in the short run. Most of the data coming out is still gloomy. Unemployment is rising and credit for the average consumer is still tight. Yet for banks, things just got a lot better thus spurring the current run.
Banking Transparency Gone: The Federal Reserve has been Slowly Moving to more Archaic Forms of Creating Credit. New Plan Will Subsidize Casino Loans for Investors with Taxpayer Money.
While the public is exercising a Freudian fixation on the A.I.G. scandal, misguidedly thinking that A.I.G. is an American company in the sense of G.M. or Ford (it is not although many Americans see a Rorschach American company), the Federal Reserve just decided to increase its balance sheet by $1.2 trillion. This unprecedented action was not unexpected, like rain in the winter but the speed and magnitude tells us that the Federal Reserve and U.S. Treasury are completely set on decimating any value in U.S. dollar. What is even more troubling is over the life span of the crisis, each new program for injecting liquidity and capital into the markets has been less and less transparent.
The Ports of America: Long Beach and Los Angeles Ports see Massive Drops in Cargo. The Concrete Mouth of Consumerism.
The port of Los Angeles and Long Beach are the two busiest ports in the United States. The port of Los Angeles is located in San Pedro Bay which is only a few miles away from the port of Long Beach. Make no mistake, these two ports are incredibly busy ports that provide the spine to a large portion of consumption goods used by many Americans. The port of Los Angeles employs 16,000 workers directly and sits on 7,500 acres. The port of Long Beach is situated on 3,200 acres.
The Long Depression of 1873: Parallels and Comparisons. Are we Missing Economic Information from an Important Piece of American Financial History?
There have been many comparisons to the Great Depression with our current economic crisis. Massive speculation, rampant problems in the banking system, and exponential jumps in unemployment. Yet we may have a lot to learn by looking at the former Great Depression known as the Long Depression. The Long Depression lasted 65 months starting in October of 1873 and running until March of 1879. According to the National Bureau of Economic Research it is the longest period of contraction on record. There is great debate as to the reasons for the Long Depression. Much of the issues come from the fact that prices were falling because of improved productivity and also sound money in gold and silver. We are currently seeing prices falling in many items including homes, cars, and other consumer goods.