Jobless Rolls to Grow

From Bloomberg:

What’s shaping up to be the longest and deepest U.S. recession in at least a quarter century may swell the number of Americans collecting jobless benefits by half this year.

As the economic slump approaches the depths of the contraction in the early 1980s, the 4.6 million workers currently receiving unemployment insurance checks may increase to as many as 7 million by the end of 2009, economists said.

Here is the entire story.

The Bond Vigilantes are Back

From Barrons today, suggesting that interest rates are starting to rise. The article indicates that nations' debt ratings are increasingly threatened by unbridled borrowing:

The incoming Obama administration got a rude reception from the debt markets.

Ed Yardeni, who coined the term "bond vigilantes" back in the early 'Eighties, sees them being roused again. Then, the vigilantes' main target was inflation; now it's burgeoning budget deficits around the globe.

The eponymous head of Yardeni Research notes that the Congressional Budget Office is projecting a fiscal 2009 budget deficit of $1.2 trillion -- 8% of U.S. gross domestic product. And that's before President Obama's $800 billion stimulus plan.

Reading the entire news story requires a paid subscription to Barrons. This story seems to confirm my post from Thursday incidating that long-term interest rates -- which are less subject to Fed manipulation -- are rising, like it or not.

Don't Trust Your Gut -- You'll Likely Be Wrong

I thought this was interesting from the Wall Street Journal:

Barron's asked a dozen experts to forecast the level of the Standard & Poor's 500-stock index at the end of 2009. Not one called for the market to go down; they all predicted gains between 5% and 38%, with a median of 13%.
Given how wide off the mark their predictions usually land, you may already be skeptical of the forecasts of Wall Street's finest Pollyannas. But their inaccuracy doesn't make your own forecasts more likely to hit the target. You should be as skeptical of your predictions as of theirs.

Here is the full story.

This story underscores research the indicates that when we trade our biases, we're generally wrong. Perhaps we can extend this lesson to acting on our interpretations of news events also. Successful fellow traders have told me that they trade more successfully when they ignore CNBC and the news, and trade only their signals instead. I've found this to be wise counsel.

Stocks -- Defending the Bottom Teaches Important Principles

Stock traders over the past few days have successfully defended the prior lows for the major indexes. In this chart, the left chart shows today's 15 minute chart, showing a steady rise following this morning's open. The right chart shows the daily chart, with the November stock market lows near the left edge of the daily chart. Today's chart isn't complete yet, but today's candle shows what may be either a hammer bottom or a dragonfly doji forming. Until the day is done, the candle could certainly change, but it is worth watching and paying close attention to.

Some Lessons to Be Learned

On the one hand, the more often we test the previous November lows, the more likely we are to see a breakout to the downside. We are, after all, close to the lows, and with good reason for being there. On the other hand, the more often we test those lows and hold them, the more likely we are to see a rally, as investors decide that "the worst is over" and want to buy at what they perceive to be "cheap" prices. This line of thinking exposes an investor/trader to a serious flaw in thinking. I call this flaw the "falling knife" syndrome. Just because a financial instrument has fallen precipitously, doesn't mean that it can't fall even more! And when traders are caught in the trap of thinking, "It has fallen so far, it just has to go higher now," they are likely to lose money. This is flawed thinking. In fact, from a purely statistical standpoint, when a breakout occurs, it is far more likely to continue in the original direction, rather than reverse direction. What has gone down, can go down more! Trying to catch the proverbial falling knife only results in bloodied finances!

Lows Are There For a Reason that is Neither Bullish Nor Bearish
These battleground levels are neither bullish, nor bearish. That's why they are battlegrounds! Prices consolidate at these levels because there is conflicting data, both bullish and bearish, at these price levels. It is a standoff! A breakout can occur in either direction at any time. I'll wait to take a position until I know who won that battle! I have found no consistent pattern that gives me confidence in either buying or selling at these consolidation/battleground levels for a longer-term trade. (To me, a long-term trade lasts days or a few weeks, not months or years.) If I am already in a profitable trade, as in this case (I hold some bearish ETFs right now), I will tighten my stops, often each day, so that if a breakout occurs against me, I will exit with as much profit as possible.

Money is Only Happy When Put to Work!
My money must be working for me all the time -- every day! I only trade, and I only hold a trade, as long as it is doing what I bought (or sold) it to do -- go up (or in the case of a sell, go down)! If it goes sideways or the wrong direction, I exit the trade "rapido"! Time is money, and wasted time is wasted money!

Emotional Peace Counts for Something

This strategy of holding a position only when profitable doesn't just save me money. It also permits me to sleep better at night. I saves me emotional angst! Peace of mind is worth its weight in gold!

Opportunity Cost -- Wrong Trade at the Wrong Time -- The One that Got Away
Lastly, and this is almost universally ignored among investors, it also prevents me from experiencing "opportunity loss". The cost of a lost opportunity because my money was tied up in a bad trade or unprofitable trade is a true cost, but it is a hidden cost. More accurately, it is an ignored cost. I'm not just in this business to make money! I'm in it to make money as quickly as possible. If I miss an opportunity while I'm waiting with white knuckles and praying for a trade to make money, or (heaven forbid) to turn from a loss to a gain, then I'm leaving money on the table. I lose the money I could have had if I had used my money on a different trade! That is a costly error -- literally!

Don't Give Control to the Market

I'm also giving control of my profitability and my money to the market. The market is not here to make money for me. Only I should be in control of that. Holding onto a bad or unprofitable trade transfers power and control of my money to market forces. Bad idea! This concept is taught powerfully by Phantom of the Pits in his book, "Phantom's Gift".

Laws and Principles
All of these principles are important. When I violate these principles, I lose money. Here is another way of stating the importance of abiding by principles:

"And unto every kingdom is given a law; and unto every law there are certain bounds also and conditions." D&C 88:38

In the "kingdom" of the world of finance and trading, my job is to learn and abide by those laws, bounds, and conditions. When I fail to do that, I pay a dear price. When I learn and live by those laws, I prosper!

Gold Goes Ballistic, Up $40 Today

It appears that investors are buying gold, having now made the decision that they have lost confidence in the financial system, at least for the moment. This confidence tends to ebb and flow from day to day. Is this a reflection of the confidence level in President Obama's capacity to fix the problems that are overwhelming our economy? Perhaps investors are realizing that such expectations are unrealistic for one person, even if he is the most powerful man in the free world. Or perhaps there is a realization that these problems can't be fixed by government, no matter how often or forceful the interventions are. In any case, when confidence drops and fear reigns, people buy gold, and we are seeing the phenomena manifested today. Gold has closed higher the past five trading sessions.

Just a few days ago, I posted here excerpts from a Citigroup memo that recommended buying gold, predicting that it would reach $2,000/oz., perhaps as early as this year. They also predicted that the current crisis would result in either 1) resurgent high inflation, or 2) severe political instability and perhaps even war.

Grains Follow Financial Markets Lower

Grains are showing more and more signs of a consolidation pattern on the daily charts (not shown). This intra-day chart shows weakness during overnight trading. The light blue dotted line is yesterday's close.

More Stock Market Blood in the Offing?

Stock index futures have continued to decline overnight, and the Dow futures are down well in excess of 100 points once again. We are trading below the Dow 8000 again this morning, but certainly near enough that anything could happen.

Long Term Interest Rates Starting to Rise

As shown in this chart of the 30 year U.S. bond futures, we are seeing prices fall as the interest rates begin to rise. This is significant, because unlike the short-term interest rates, the Fed is much less capable of manipulating long-term interest rates. The added cost to finance U.S. government deficits is beginning to have an effect, and the interest cost to the American tax-payer is beginning to rise.

The Multiplier Effect of Public Spending

There was a fascinating editorial in the Wall Street Journal today by Robert Barro, economics professor at Harvard University. Here is an excerpt:

I have estimated that World War II raised U.S. defense expenditures by $540 billion (1996 dollars) per year at the peak in 1943-44, amounting to 44% of real GDP. I also estimated that the war raised real GDP by $430 billion per year in 1943-44. Thus, the multiplier was 0.8 (430/540). The other way to put this is that the war lowered components of GDP aside from military purchases. The main declines were in private investment, nonmilitary parts of government purchases, and net exports -- personal consumer expenditure changed little. Wartime production siphoned off resources from other economic uses -- there was a dampener, rather than a multiplier.
There are reasons to believe that the war-based multiplier of 0.8 substantially overstates the multiplier that applies to peacetime government purchases... When I attempted to estimate directly the multiplier associated with peacetime government purchases, I got a number insignificantly different from zero. /my note: In other words, there was no benefit -- it was virtually zero!/
Much more focus should be on incentives for people and businesses to invest, produce and work. On the tax side, we should avoid programs that throw money at people and emphasize instead reductions in marginal income-tax rates -- especially where these rates are already high and fall on capital income. Eliminating the federal corporate income tax would be brilliant. On the spending side, the main point is that we should not be considering massive public-works programs that do not pass muster from the perspective of cost-benefit analysis. Just as in the 1980s, when extreme supply-side views on tax cuts were unjustified, it is wrong now to think that added government spending is free.

Here is the entire article.

Another Roller Coaster Day for Stocks

After President Obama's spokesperson had a press conference, the stock market erased nearly all of its 270 point loss for the day, within about 20 minutes. The Dow had been down only about 35 points. I thought we might even move into the black. Now, however, stocks have reversed again, and the Dow is headed downward again, dipping to -175 at the moment of this posting. This is why I don't take longer-term futures trades in stocks (I do, however, in my ETF trading, where I am still short stocks). As a trader, I always keep in mind two principles regarding stock trading:

1. For stocks to rise, there must be active buyers in the market. All it takes for stocks to fall is for there to be few buyers in the market. No short sellers -- or sellers of any kind -- are necessary for the market to fall.
2. There is almost a perennial bias in stock trading for prices to rise. Personally, I take this phenomenon as evidence that we have not yet seen any signs of a capitulation. When this phenomena reverses, it will be a sign to me that a genuine reversal has occurred.

Thain is History at Merrill Lynch

Perhaps this news will cause B of A's stock to rebound? I'll keep watching!

BIg Inventory Build Causes Crude Oil Plunge

Today's inventory report, showing a large and unexpected build in crude oil inventory in Cushing Oklahoma, has caused a fresh sell-off in crude today. This is despite surprisingly solid compliance with production cuts from OPEC members. The expired contract fell to fresh lows earlier this week; will this lead the new lead contract to do the same? Look at the plunge at the moment the inventory report was released!

With so much oil being hoarded globally, and inventory builds occurring in the United States, the largest crude oil market, I don't see that crude oil can rebound in the near future.

Grains Stagger At Open on Demand and Stock Market Concerns

The weakness in stocks today has rippled through to the grain markets, causing grains across the board to sell off upon open. Over the past week, grains have shown signs of consolidation. Over the past few months, commodity prices have shown considerable and unusual correlation with stocks, with weakness in each reflecting demand concerns for products and the commodities that compose them.

Steady Stream of Bad News Drops Dow Back to 8000 Level

Bad news this morning has pummelled stocks once again. The Dow is now in the tank to the tune of 200 points, and nearing the critical 8000 handle. I expect another bull/bear battle at this level. Here are a few headlines this morning:

• Shock: weekly unemployment claims rocket higher to 589,000
• New home starts drop more than forecast
• Large inventory builds send crude oil price lower
• Thain's future at Merrill in serious jeopardy
• Big bank CEO/insider stock purchases occurred one day before stocks tanked (yesterday)
• Microsoft revenue disappoints street, stock plunges
• Microsoft reports PC sales flat during Q4, indicating IT sales slumping
• Microsoft to ax 5000 jobs

Thain spent $1.22 million to redecorate his office after taking over Merrill, including a $35,000 commode! He was spending this money at the same time that he was cutting jobs at Merrill Lynch and imposing draconian cost cuts on his employees. What an unbelievable example of elitism!

After Yesterday's Rally, Stock Futures Drop Into Red

Even though stock index futures continued to rise following yesterday's close, the futures turned negative again during the night. Note in this chart the support at yesterday's closing price, shown as a white line in the 15 minute chart on the left. After a temporary bounce, prices once again began to fall, and broke through that same support on the second attempt.

Disappointing earnings reports appear to be the culprit once again. The futures are now in the red once again. As just one example, even Apple's solid Q4 showed some gaping holes in what was thought to be a solid foundation, especially in sales of Macs and iPods, the foundation of their profits.

New Perspective on Global Economy

Here are a few excerpts from the Quarterly Review of Hoisington Investment Management company. Hoisington manages about $4 billion in various funds, both public and private. Their website is:
http://www.hoisingtonmgt.com/

Presently, major sectors of the U.S. economy are experiencing a debt deflation that is causing a massive destruction of wealth, thereby curtailing jobs, income and spending. Irving Fisher who, according to Friedman, was the most brilliant of all U.S. economists has noted that when the economy enters a period of "debt and price disturbances", those forces will eventually engulf the economy... Once extreme over indebtedness occurs, fiscal and monetary policy become impotent in spurring economic growth because money velocity will decline -- something that is currently happening. Individuals and businesses struggle to repay debt with harder dollars, and saving begins to rise as caution prevails.
The debt level of the U.S. has reached unprecedented proportions. More important than the level, however, is the fact that for the last few years the debt was improperly loaned and financed... This type of lending activity implies there is little likelihood of repayment of principal and interest. Stock prices have plunged, and with home prices plummeting, and commercial and industrial properties losing value, a deflation of assets has clearly begun while the underlying debt remains constant.
Will this deflation overwhelm the best efforts of the Federal Reserve, invalidate Friedman's theory and prove Fisher correct? Most naturally feel and hope that the superiority of unbridled monetary and fiscal stimulus will overwhelm incipient price declines and stem the expanding cyclical downturn in economic growth. Our judgment is that the power of monetary policy revolves around the ability to initiate a new borrowing and lending cycle. This can only happen if lenders are willing to lend and borrowers are wanting and able to borrow. Presently, neither are so inclined. If price declines in assets continue, then Shakespeare's admonition of "neither a borrower nor a lender be" will become the economic mantra, meaning that a period of very low nominal growth will likely extend for a decade.
...The Fed has invented many new vehicles for injecting liquidity into the economy, but few outward signs suggest that these actions are engendering a recovery. Our analysis suggests that the Fed will not achieve the desired results...
Fiscal stimulus will not work well, and may even be counterproductive, and this applies to both spending programs and to certain tax programs as well...
The private sector has demonstrated the greater flexibility and creativity to expand the economic pie, increasing productivity and thereby improving living standards for all. The risk is that increased federal borrowing will stunt the private sector's ability to grow.

There are numerous other very interesting insights in this report, but they are too many to quote here. The authors studied debt bubbles and debt deflation periods in several countries over a period of 150 years, and concluded that the economy will show little or no growth for at least three years. In fact, they said it is more likely to persist for a decade of more! During the periods of debt deflation they studied, all of them resulted in periods of economic "further wealth drain" for 20 years! They concluded with the following:

While the historical record indicates that the ultimate low in Treasury yields lies years away, the path to the ultimate low will be anything but smooth or linear as significant volatility continues. As the experience from... history indicates, many "false dawns" will occur, with investors assuming that the long-delayed cyclical recovery in economic activity is at hand. During these pleasant but relatively short interludes, stock prices will probably rise dramatically and bond yields will increase. If history is a guide, however, these episodes will further drain wealth and will be thwarted by the persistent forces of the debt deflation.

The entire quarterly review can be read here. Very interesting read without political spin or agenda! Thanks to Hoisington for making the report public!

Stocks Rallied Stoutly Today

Thanks to news that President Obama and his economic team are preparing a new bank rescue package, timed with announcements of insider purchases of stocks by the CEOs of two major banks, stock prices rallied stoutly today. This was a very nice rally in the last two hours of the trading day.

Stocks Closed Yesterday Below Key Dow 8000 Support Level

Yesterday, stock futures closed the day below the key technical support level of Dow 8000 (the S&P 500 also violated the key 850 support level), raising new worries that a new round of technical-based selling may occur soon. Furthermore, we are only a few hundred points from the November 2008 low, and the nearness of this price support level raises to an even higher level the significance of these price levels. Overnight, the Dow has moved higher to about the Dow 8000 level, so anything can happen today.

Generally, if yesterday's close is confirmed by prices dropping below yesterday's low, more selling would probably be the natural consequence. A breakout of yesterday's low by an even lower price is my own personal method of indicating that prices are going to continue downward. I consider that a confirmation of yesterday's low, and thus, evidence that prices will continue still lower. I'm sure many others use the same confirmation method.

Client Memo Predicts Severe Consequences of Government Interventions, Including $2000 Gold

From a client memo being attributed to Citigroup Chief Technical Strategist:

"The damage caused by the financial excesses of the last 25 years is forcing the world's authorities to take steps that they have never tried before. This gamble is likely to end in one of two extreme ways: with either a resurgence of inflation, or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold."

"They are throwing the kitchen sink at this. The world is not going back to normal after the magnitude of what they have done. When the dust settles on this, the world will see that it will either work, and the money they have pushed into the system will feed through in inflation shock, or it will not work because too much damage has already been done and we will see continued financial deterioration, causing further economic deterioration, and the risk of a feedback loop. We don't think that this is the more likely outcome. But each week as it passes, and each month passes, there is a growing danger of a vicious circle as confidence erodes. This will lead to political instability.

"We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes, because people are feeling disenfranchised...

"What happens if there is a meltdown in a country like Pakistan, which is a nucelar power? People react when they have their backs against the wall...

"We are already seeing doubts emerge about the sovereign debts of developed, AAA-rated countries /like the United States/, which is not something you can ignore...

"Gold traders are paying close attention to reports from Beijing that China is thinking of boosting its gold reserves from 600 tons to near 4,000 tons in order to diversify away from paper currencies...

"Britain had made a mistake selling off half its gold at the bottom of the market between 1999 and 2002...

"People have started to question the value of government debt...

"The blast-off /in gold prices/ is likely to incur within two years, and possibly as soon as 2009. Gold was trading yesterday at 812 oz. It is well off the all-time peak of 1030 in February, but it has held up much better than other commodities over the last few months, reverting to its historic role as a safe-haven store of value and a defacto currency. Gold has tripled over the last three years in value, vastly outperforming Wall Street and European bourses."

Stocks Turn in Worst Inaugural Performance In Dow History

Stock futures plunged even further following my last post, highlighting the magnitude of the challenge Pres. Obama faces. He will have to hit the ground running tomorrow. Today was the worst inauguration day performance since the Dow came into being in 1896.

Confidence in the U.S. banking sector is collapsing fast, as today's prices for major banking stocks indicated. It is now estimated that rescue of Bank of America, the bank that just four months ago was considered solvent, may require $80 billion or more. Citigroup is now considered to be beyond rescue and the market appeared to indicate that its nationalization will be necessary. JP Morgan and Wells Fargo stock prices are also plunging. Many banks stocks fell by 25% today alone! This seems to get worse by the day...

Could Pres. Obama's Policies Usher In/Prolong A Depression, as It Did With His Hero?

Let's hope that President Obama doesn't make the same mistakes that Herbert Hoover and Franklin Delano Roosevelt, both fellow "progressives", made during the Depression. (Hoover was, for a time, a literal member of the Progressive Party, but FDR implemented more forcefully the policies of progressives.) While the Depression in Western Europe lasted only a few years, it lasted nearly more 12 years after FDR took office. In Europe, it was just the "Depression". In the United States, FDR's policies made it the Great Depression, thanks largely to FDR's policies of progressivism. He played god with the U.S. economy, throwing the kitchen sink at it. He taxed small businesses into non-existence, leaving millions more Americans unemployed. His policies were the biggest reason the Depression lasted nearly 12 additional years instead of just a few short painful ones, as it did in Europe. Ironically, Pres. Obama has indicated that FDR is one of his heroes! If this recession lasts as long as the "Great" Depression did, we won't see a recovery until 2021! Ugh!

Stocks Drill New Depths Following Inauguration

Almost literally the moment our new President was sworn in, stock index futures dropped to new lows for the day, just a few hundred points from the lows last November reached shortly following his election.

Welcome and Good Will to President Barack Obama

Barack Obama was sworn in today as the 44th President of the United States of America. Like many millions of other Americans and people of good will all over the world, I wish our new President good will, great wisdom, and prayers of support.

Welcome, President Barack Obama!

Treasury Bears Can't Get Upper Hand -- Yet

This daily chart for treasury futures shows a consolidation pattern developing at the loftly price levels that we've seen recently. Many prominent investors have been suggesting that U.S. treasuries are in bubble territory, and I've included some of those opinions in this blog. I haven't shorted treasuries, except on a short-term basis.

There is a saying, "don't fight the Fed". As long as the Fed can continue to print money and and use those unlimited new funds to buy U.S. treasuries, it appears that shorting treasuries is a fight in futility. The Fed can always print more money and continue forcing interest rates lower by buying all the treasuries that the U.S. government wants to sell. It's going to be difficult for treasury bears to gain the upper hand as long as these conditions continue. However, I wouldn't be surprised if, at some point down the road, sentiment against U.S. government debt shifts strongly enough that the flight from treasuries is rapid, forceful, and devastating. One writer, whose name I don't recall now, a few weeks ago said that when this phenomena occurs, it will be "breathtaking". And that's an understatement!

Why Government Work Projects Don't Bolster Employment

From Bloomberg:

An hour’s drive through California’s Riverside County takes in neighborhoods of deserted homes, boarded-up businesses, busy unemployment offices -- and crews working on millions of dollars in new public projects.
Only four years ago, Riverside and nearby San Bernardino, often called the Inland Empire, were California’s economic powerhouse, accounting for more than a fifth of the state’s new jobs. Today, unemployment reigns in the sprawling region east of Los Angeles. The 9.5 percent jobless rate in the two counties matches Detroit’s as the highest of any major metropolitan area in the U.S.
Riverside... county illustrates both the promise and the limitations of the spending President-elect Barack Obama proposes to pull the U.S. economy out of a recession that may become the longest since the Great Depression.
“What infrastructure spending can do is bolster employment in a group of industries, like construction, with workers who are ready to go,” said Brad Kemp, director of regional research at Beacon Economics in Los Angeles. “What it can’t do is stop the unemployment rate from rising currently because there are a lot of forces coming at consumers, who are holding back on spending.”

Here is the full story.

Stock Futures Tumble (More) in Evening Trading

Dow 8000 is right around the corner. Expect a huge bull/bear battle over that handle.

Foreign stocks in Europe, Brazil, and Canada also dropped while the markets were closed in the United States.

$41.6 Billion RBS Write-Off Roils Stock Futures

Despite that the stock markets are closed today, the stock market futures tumbled from positive territory into the red when the Royal Bank of Scotland announced further write-offs of nearly $42 billion today, raising fresh doubts about the solvency of US and UK banking systems. The Dow last night had been higher by 75 points, but when the RBS news was announced at 8 a.m. EST, the futures tumbled to a low of -125 on the Dow, finally settling the trading day in the red at about -90.

It was also over the Martin Luther King Holiday one year ago that a rogue trader at Societe Generale also roiled the stock market futures when his unauthorized trades were suddenly liquidated. Dow futures dropped 570 points that day. The stock market recovered, moved higher again, and closed up about 200 points the following day.

The Magnitude of the Monster

From the editorial opinion page of the Wall Street Journal:

Thanks to a 6.6% decline in revenues due to recession, a spending increase of some $500 billion or 19%, and assorted federal bailouts, the U.S. deficit for fiscal 2009 (ending September 30) will nearly triple to $1.19 trillion. That's 8.3% of GDP, which CBO says "will most likely shatter the previous post-World War II record high of 6.0 percent posted in 1983."
The details aren't known, but Mr. Obama and Democrats have been talking about at least $800 billion, and probably $1 trillion, in new spending or various tax credits and reductions over two years. Toss that in and add more expected bailout cash, and if the economy stays slow the deficit could reach $1.8 trillion, or a gargantuan 12.5% of GDP...
Including the Obama stimulus spending and assuming the full $700 billion of bailout money for the banks, insurance companies, auto firms and so forth gets fully spent, federal outlays could approach $4 trillion in 2009...
Whether or not you think new spending will stimulate the economy, the one undeniable truth is that this money has to come from somewhere, which means that it is borrowed or taxed from the private economy. This spending blowout is all but guaranteeing huge future tax increases, and anyone who thinks only the rich will pay is living an illusion. Taxpayers need some new champions in Washington -- and fast.

Here is the full editorial.

By the way, $4 trillion spent in 2009 is ten times the deficit for 2008! And we thought the Bush deficits were irresponsible! Imagine adding the equivalent of eight years' of Bush Administration deficits in just one year -- this one!

I'm just curious. Has anyone asked the question: What if this doesn't work? If this turbo-charged Keynesianism fails to recharge the U.S. (and global) economy, the American people will still be obligated to pay the debt, but without any of the benefit. What then?

Anyone for Plan B?

More Job Losses Coming

Some of the weekend's finance-related headlines:

• UBS Plans to Cut 5,000 Jobs This Year
• Liquidation of Circuit City to Cost 30,000 Jobs
• Rio Tinto Slashes 600 Jobs
• GE Capital Plans to Cut 11,000 Jobs
• AMD Lays Off 1,100 Workers
• Hertz Axes 4,000 Jobs
• Pfizer Hands Out Pink Slips for 2,400 Sales Staff Positions