Nowhere To Hide

These are indeed unprecedented times in the financial markets, inclusive of the deepest weekly drop ever, governmental interventions which the market has taken very negatively and actions by The Federal Reserve who seem to be firing shots at random trying to hit on something. The DOW, which one year ago reached all time highs, has simply crashed and we now have the biggest margin call of all time taking place. You sell it, or they will sell it for you!

One characteristic in the culmination of a bear market is that "they get them all", translating that no stock is left without suffering carnage. Done! Even if the bear market is not over, we often see historical upswings within bear markets. One is fixin to happen very soon. The credit markets need to revert to some sense of normalcy before any sustained upward movement can be seen in the indicies.

Although the comparisons to the Great Depression are, quite frankly, getting people depressed, one area that offers some hope is the unemployment rate. As indicated in the chart presented below, gathered from the fantastic blog Carpe Diem , unemployment levels remain historically acceptable, particularly since "full employment", historically recognized at 3%, has risen to around 4.5 % over the past two decades.

Unemployment will definitely rise further in this environment, and I project it will top out at about 7.3%, which is not good, but fantastic when compared to the Great Depression. Hey, I predicted oil to drop to to 75 per barrel back in May!

I remember back in the dot com boom, folks proclaimed that things were different this time. Is it different this time? Although I don't know what time my first beer is tomorrow, I doubt it.

I heard today that GM may be doomed to fail! I have no idea, but I am willing to bet on the new Chevy Volt, which comes out in 2010 and therefore I aim to start dollar cost averaging the stock. What are you betting on?