Media Talking Up a Depression

I thought it was bad enough a mere week ago when 33% polled though we were already in a depression. Now come these numbers claiming 6 in 10 think it's very or somewhat likely we'll be in one soon.

Based on the relentless doom and gloom, frankly I'm surprised it isn't higher.

A new national poll suggests that six in ten Americans think another depression is likely.

In a CNN/Opinion Research Corporation poll out Monday afternoon, 59 percent of those questioned say that its very or somewhat likely that another depression could occur in the United States. Four in ten Americans say it not likely another depression will occur.

The country went through a decade long depression following the stock market crash of 1929, in which roughly one out of four workers were unemployed, banks failed across the country, and millions of ordinary Americans were temporarily homeless or unable to feed their families.

Eight in ten of those polled say things are going badly in the country today and 84 percent rate the economic conditions as poor.

"The question on how things are going in the country is the longest trend on the public's mood in polling history, and in 34 years, Americans have never had such a negative view," said CNN Polling Director Keating Holland. "That 20% mark is an all-time low the makes the mood of the country worse today than it was during Watergate, the Iran hostage crisis, or the aftermath of 9/11."

If you aren't already depressed yourself, skim through the comments there. Then read this.

After an early plunge of 800 points today, the Dow rallied to close down 370, marking the first time below 10,000 in four years.

Depressing, isn't it?

Did Bhutto Assassination Affect the Markets?

I know it's been popular the last day or so to point to the Bhutto killing and then to the stock market and try to draw connections. Believe, me, the stock market drop has much more to do with market fundamentals and very little to do with politics around the world.

U.S. stocks fall, pressured by downbeat home sales

NEW YORK (MarketWatch) -- Stocks declined on Friday, giving up their earlier gains, after a disappointing report on new home sales for November rekindled concerns about the U.S. economy and the housing crisis. The DOW fell 55 points, or 0.4%, to 13,303. Earlier, the Dow hit an intraday high of 13,451.38.

The Dow is on track for a yearly gain of 7%, the S&P for a gain of 4% and the Nasdaq for a rise of 10.7%.

The new home sales report was "the turning point and pushed it [the market] lower," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank. "The number was quite a bit weaker than expected."

So the market drop is due to the underlying fundamentals, not to the tragic death of Bhutto.

Don't believe anybody who says anything else.

Market Ends Week Up 1%

With all the doom and gloom stories about the stock market lately, the reality is that the Dow still gained on the week.

U.S. stocks end higher amid bargain-hunting: Dow gains 1% for the week after up-and-down ride

NEW YORK (MarketWatch) -- U.S. stocks shifted gears yet again Friday to close with modest weekly gains as an erratic market closed a roller coaster ride focused on the credit crunch and its impact on the financial sector and the overall economy.

"This market is over-sold in the short-term, so although we're getting more bad news today, investors are seeking out bargains as the week winds down," said Art Hogan, chief market strategist at Jefferies & Co.

"Position squaring ahead of the weekend due to the options expiration is also affecting trade. The net result is erratic and seemingly random market action," said Frederic Ruffy, an analyst at Optionetics.

You have to bear in mind that by this time of the year, your professional investors and fund managers are looking to lock in profits so they can make their bonus goals.

So all other things held equal, you will get some significant market volatility anyway due to them selling off positions, shift the money to fixed income securities for a few days to let the dust settle, and then buying right back back in doing some bargain hunting.

Is the macro-economy slowing down? Sure. Is there troubled waters in the lending industry? Certainly. Is inflation edging up? Yes. But unemployment is still near the natural rate of unemployment and interest rates are low.

It's hardly "buddy can you spare a dime" time.