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Friday, July 3, 2009

Week in Review: The Day of Economic Reckoning Is Still Coming (PODCAST)

"What I say to you, I say to all. Keep on the Watch" - Jesus, the Christ, Mark 13:37

Welcome to the 'Week in Review'.

The job, or employment numbers came out. And they were beyond dismal.

What is interesting to me? Is that the U.S. Media seems to examine the unemployment and jobless numbers? As if they are complete stand alone numbers. As if people being out of work, which is horrendous, is the extent of tragedy of those numbers.

They are not.

Taxes, affect employment numbers.

When unemployment increases? That affects the governments ability to gather taxes. People aren't working. People who aren't working, don't pay a heck of a lot of taxes. The higher the unemployment goes, the less money the government gathers to pay back the massive debt that it has taken on in recent months.

This is an economic law. You cannot raise taxes to increase tax revenues. Especially on business. It cannot happen. It has never worked. Ever.

I discuss this, and the implications of the employment numbers, on what is coming down the road to this economy, in the following podcast. Just press play!

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

Click here to download this podcast.

This is a chart of the current "DOW Jones" Industrial Average, demonstrating the "Head and Shoulders" pattern:

The above is what is known as a "Head and Shoulders Pattern". In this pattern, the straight line at the bottom is known as the "Neckline". Or, on the DOW Jones, with consistent trading below the 8170 region. When these breaks occur? Then the market usually pulls back up to the neckline, before they continue further down.

Here's a picture of the Bond Curve, as it existed a few weeks ago:

Here's a picture of the Bond Curve, as it exists now:

It is ever so slightening, right before what is seasonally a huge bond rally. Cheaper rates can't delay what's coming. But it might possibly 'delay' it.

Update: You know, it's funny. I had those comments within the podcast on Saturday regarding the Chinese. And what comes out today in the news? This. Please, remember that in the system that we live in? Business is an adversarial game.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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