The consumer really needs to wake up! Guys please do not think that the economy is shaping up and that jobs are going to be created. The businesses in America are growing and they are expanding. Wall Street and the indices have grown and seem to be doing well. This does not mean you will do well! Spending is up because of confidence in the market but a critical and or rational person for that matter will see that GDP is not growing fast enough to support the employment rate.

The Federal Reserve should buy back at least $750 billion worth of treasuries to keep interest rates down and promote spending. If inflation is a concern than increasing rates would be the answer. By keeping too much cash in the system it send a negative picture to the street. Earnings have been rolling in and have been descent but this was to be expected as lay-off and cost savings have hit many companies’ bottom lines. Obviously you know this is one of my pet-peeves. Cost savings should not be considered earnings and should be a negative not a positive. Companies want to reach Wall Street’s expectations and they will do whatever it takes to get there.

Goldman had some so-so earnings but they are saying that they did not do as bad as other financial institutions. On the positive side Goldman has had a 20% drop in operating expenses from year to year. I think someone needs to take Goldman off their high horse for a change. Also, we need to stop electing people that worked for Goldman and made millions into politics. Our country needs to be run by those that have been in business but also those that have an educated path into economics. I am tired of politicians being either good talkers or those from Wall St. using their wealth to get to high political positions. Does anyone agree or disagree with me?

Is leveraging going to be an issue down the road? Financial reform is going to take place over the next few years but this does not mean it will be done away with. The amounts of money required in accounts will be higher but leverage to trade may still be allowed. Wasn’t this one of the main problems to begin with? Traders need to use leverage in order to buy big lots of stocks, bonds, options, etc and use it to their advantage. The average person that tries this can be financially ruined if stops are not used. This is why it is so important to speak with a professional and take as much advice as possible.

The market is shrugging off negative job data which could be due to low volume. Many traders moved out of positions over the past few days slowly and into bonds and gold. Supposedly banks are examining their books closely to look for small stress fractures that could be an issue in the near future. Also, they are looking for clarity on financial regulations as they are being written up. It is a tricky time out there for both consumer and for the institutions. The text book are being re-written as we speak.

Is the volume on the exchange concerning? Obviously it down pretty big and many trades are on the bond side. Does this mean we will see a sell-off? Not necessarily but it does mean traders are showing concern. It could mean they took profits off the table and placed the money in stable bonds. The DOW could sell off back to 10,000 over the next few weeks and the Euro could see a drop so be ready for a trade recommendation on both sides.

What is the actual unemployment rate? Is it 9.6% or is it more like 20%? The thing that gets me is what happens to the disgruntled Americans who cannot find a job after 1 yr or after their unemployment money runs out? There thousands and thousands of people that have given up their job search. These individuals are not counted in the overall number. Consumers seem to be left in the dark about this and should know what the numbers truly are. Secondly, this whole Basel thing gives banks until 2019 to get their act together. But when the average American messes up the IRS is banging on our door in weeks. This could slow down the flow of money for Americans who are looking for loans.

This week should show where the market intends to go. Housing data was so-so and job reports on Friday could be a huge factor. Consumer confidence did come in higher than expected which has many economists scratching their heads. The fact is growth in GDP cannot be obtained at the current level of unemployment. The argument today is should the housing market be left alone to fail? My answer is no because the foreclosure rate will skyrocket as more job are lost. The problem is some economists have not lived on the other side of the tracks in years. What we need is for people to get their head out of the books for a second and join the rest of the world. We are still in a recession guys!!!!!

This week it is apparent we are seeing traders test the market. There is support around the 1050.00 level on the S&P. Foreclosures and employment are still on the minds of consumers. Are we looking at a double dip recession? Or did we just not get out of the first one? Sometimes statistics are incorrect and maybe GDP needs a new equation or maybe other indicators should be used. The next few months might be defensive buying so do not be fooled into believing there is a bull market. Consumers are scared and more retail outlets will be going out of business.

Let’s break this down real quick! GM is going to create an IPO and consumers can only be involved if they are a hedge fund. Basically rich investors or hedge funds that give large commissions to brokers will be allowed to get this IPO before it comes to market. Now, this is normal but didn’t we the consumer bail out GM? Didn’t we give them oxygen when the government bailed them out? Throw investors a bone once in a while; especially after tax dollars were used for the financial bailout. The government needs to do the right thing here and people should be lobbying or being aggressive about this. In all seriousness the government is part owner of GM! They need to speak up. Any thoughts?