January: Looking Ahead, Looking Behind

By MICHAEL GRAY

Looking back January saw the Dow index loose 3.5 percent. Other equity markets were down about the same.Commodities including gold were up slightly, thereby being a good hedge for capital preservation.

January also has a correlation for year-long market trends. I believe 3.5 percent decline for 2010 will be a rosy number by the time we get December.

January also marked the end of the global central banks doing currency swaps, which shows why the markets are moving higher this week on dollar weakness. This dollar/stock correlation will disconnect as the European Union begins to shudder over PIIGS debt load.

January’s unemployment number will be -150,000 if the Bureau of Labor Stats takes it normal tact of using the death side of its Birth/Death model for new businesses. Despite what the pundits say, January is one of two months of the year where the BLS deducts some of the phantom jobs it has guessed were created by small businesses but cannot find.

The unemployment rate will probably stay static at about 10.1 percent, because this number uses the household survey number, which shows further joblessness but we just move other people further down the reporting pipeline to keep that rate number flat since that is the headline. This is why the U6 number is closer to 23 percent because it holds all people who are on extended claims, have taken a part-time job or have left the job market.

WHAT’S WITH 11

This week we had Irani President Imalatefordinner or whatever his name is state that the world will take notice on 2/11/10.

Now we had 9/11 and we had the 7/11 London bombing, the 4/11 Madrid bombing, the 7/11 Bombay train bombing and the 10/11 Bali bombing. Not quite sure if there is a connection, but it certainly is a trend. Anyone have any ideas?

For more on Wall and Washington and the economy see: https://mgray12.wordpress.com

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