Quiet Time

I have been very quiet this week in posting to the blog. There really isn't too much to say that is new. It is still the same old, same old song. I really would like to say something positive, such as the market has hit bottom and good times are about to start. But it is just not in the cards. Of course, we will have a bear market rally that should rally the market by 25% to 30%. But, it will be just that, a bear market rally.

Market, as measured by the Dow Jones Industrial Average, is at a twelve (12) year low. Citigroup (C) fell below a $1 share today before closing at $1.13. Today's closing price is a 98% drop in just two years! Ouch, that really hurts, especially if you have been a long-term investor in Citigroup (C).

In regard to the mortgage market, a stunning 48 percent of the nation's homeowners who have a subprime, adjustable-rate mortgage are behind on their payments or in foreclosure. A record 5.4 million American homeowners with a mortgage of any kind, or nearly 12 percent, were at least one month late or in foreclosure at the end of last year, the Mortgage Bankers Association reported. That's up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007.

Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could run out of money (insolvent) sometime this year amid a surge in bank failures.

General Motors has warned that billions of dollars in government aid may not prevent it from running out of cash if vehicle sales do not improve soon. (Does anyone really believe that car sales are going to improve anytime soon?) Deloitte & Touche, GM's auditors, have expressed “substantial doubt” about its ability to continue as a going concern, based on continued operating losses, negative shareholders’ equity and the inability to generate sufficient cash flow. The Wall Street Journal reports that top GM executives are more open to a speedy bankruptcy reorganization financed by the government, pushing aside earlier concern that such a move would scare away so many customers the company wouldn't survive.

See what I mean by the same old, same old song. Somethings just never change. Well, tomorrow is another day. Speaking of tomorrow, median estimates are that employers cut payrolls by 650,000 last month; and the unemployment rate will surged to a 25-year high of 7.9 percent. Anything more than 650,000 lost jobs and the market has the potential of a major, major sell off. If the job number is better, the market could have a great, great day. Stay tune!