PLEASE READ THIS CAREFULLY AND TRY TO DIGEST WHAT IT MEANS- SOMETHING I HAVE BEEN HAMMERING INTO THICK SKULLS LATELY...
Here is a nice commentary from S&P Markescope ON 1/24/2008
"On the economic data front, initial jobless claims fell 1,000 to 301,000 for the week ended Jan. 19, considerably lower than the 325,000 level that economists had anticipated. Declines over the previous three weeks have taken initial claims from the year's high of 357,000 down to near 2007 lows. The drop in claims in January diminishes the significance of the December claims surge, as the mix now looks more like the usual seasonal volatility than a sign of marked deterioration in December, Action Economics said.
The drop in unemployment claims reported Thursday is significant because the biggest risk to the U.S. economy currently is a psychological one rather than one of a marked decline in demand for goods and services, said David Kelly, chief market strategist at JP Morgan Funds in New York.
"The problem is so many people have bought into the notion that because of the financial crisis we must have a recession," Kelly said. "This is case where we could talk ourselves into a recession, led psychologically rather than fundamentally."
Since U.S. businesses aren't overstaffed, it isn't necessary to lay off workers as long as there's still plenty of demand in the economy from recent quarters, Kelly said. What the market is testing now is, in the absence of a big drop in demand, how many workers are businesses likely to lay off anyway just because theyâ re scared, he said.
"Any recession in America has to be led by the consumer," Kelly said, adding that only a loss of jobs, not a decline in wealth or in confidence, has spurred consumers to stop spending in the past 16 years."
Here is a nice commentary from S&P Markescope ON 1/24/2008
"On the economic data front, initial jobless claims fell 1,000 to 301,000 for the week ended Jan. 19, considerably lower than the 325,000 level that economists had anticipated. Declines over the previous three weeks have taken initial claims from the year's high of 357,000 down to near 2007 lows. The drop in claims in January diminishes the significance of the December claims surge, as the mix now looks more like the usual seasonal volatility than a sign of marked deterioration in December, Action Economics said.
The drop in unemployment claims reported Thursday is significant because the biggest risk to the U.S. economy currently is a psychological one rather than one of a marked decline in demand for goods and services, said David Kelly, chief market strategist at JP Morgan Funds in New York.
"The problem is so many people have bought into the notion that because of the financial crisis we must have a recession," Kelly said. "This is case where we could talk ourselves into a recession, led psychologically rather than fundamentally."
Since U.S. businesses aren't overstaffed, it isn't necessary to lay off workers as long as there's still plenty of demand in the economy from recent quarters, Kelly said. What the market is testing now is, in the absence of a big drop in demand, how many workers are businesses likely to lay off anyway just because theyâ re scared, he said.
"Any recession in America has to be led by the consumer," Kelly said, adding that only a loss of jobs, not a decline in wealth or in confidence, has spurred consumers to stop spending in the past 16 years."
Im only worth 30% less than I was in 2000 thanks to the devaluation of the Dollar. I also lost an additional 12% or so thanks to the "What Inflation" oil, gas and food. 
