Page Perry’s Market Monitor – January 8, 2010


There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:

  • The Dow Jones Industrial Average opened the year at 10,428 and, on Monday, the market soared 156 points.
  • On Tuesday, the Dow Jones Industrial Average dropped 12 points.
  • On Wednesday, the Dow Jones Industrial Average gained 2 points.
  • On Thursday, the Dow Jones Industrial Average rose 33 points.
  • On Friday, the Dow Jones Industrial Average moved up 11 more points and closed the week at 10,618.
  • Approximately 7.2 million jobs have been lost in the past two years.
  • The U.S. experienced the loss of 85,000 jobs in December, 2009.
  • Berkshire Hathaway and its subsidiaries reportedly eliminated 21,000 jobs in 2009.
  • UPS announced that it was eliminating 1,800 jobs including management and administrative positions.
  • The 2010 U.S. census promises to provide a short-term boost to employment. The government expects to hire approximately 1.2 million temporary workers to assist with gathering data about the population.
  • USA Today reports that “prospects for most job seekers are expected to be grim for years.”
  • A recent poll of 5,000 households found that only about 45% of Americans are satisfied with their jobs.
  • In November, 17 of the 372 U.S. metropolitan areas had unemployment rates above 15%. Jobless rates above 10% were found in 125 metropolitan areas.
  • Mesa Air Group has filed for bankruptcy.
  • Automobile sales were 21% lower in 2009 than they were in 2008. It was the worst year for selling automobiles since 1982.
  • There were approximately 1.43 million bankruptcy filings in 2009.
  • Federal Reserve Chairman Ben Bernanke concedes that stronger regulation of the financial industry is needed to provide defenses against excessive speculation in the financial markets.
  • The views expressed by economists at the annual meeting of the American Economic Association are quite sobering. Most believe that the financial crisis is far from over and that the financial regulatory actions of the past several years have been woefully inadequate to effect essential changes needed in the financial system. Some believe that another massive crash is inevitable.
  • It is very problematic that elected officials have utterly failed to adopt any meaningful financial reforms when just months ago those same elected officials placed a trillion dollar burden on American taxpayers (and future generations) to pay for the damage done as a result of the excessive risk-taking and greed of American financial institutions. Apparently special interest groups are controlling the actions of most elected officials.
  • A recent Bloomberg national survey revealed that a majority of Americans believe that the government should have never provided aid to big financial companies. Similarly, more than 75% of those polled believe the companies that received financial aid should not pay any bonuses this year.
  • Paul Krugman, a Nobel Prize winning economist, believes that there is a 30 to 40% chance that the U.S. economy will experience a recession during the latter part of 2010.
  • States are facing budget shortfalls of $14.8 billion in 2010. The shortfalls for 2011 are anticipated to reach at least $21.9 billion.
  • Despite the economic woes of most city and state governments, many continue to offer an array of economic and tax incentives in an effort to entice corporations to relocate.
  • Retail sales were better than expected in December.
  • Investors will want to watch earnings reports closely over the next several quarters. Some 2009 earnings reports were undoubtedly skewed by cost savings attributable to reductions in force and layoffs. Earnings in 2010 may provide a better indication of a company’s underlying fundamentals.

Page Perry’s Market Monitor is published periodically to give investors an overview of certain recent developments impacting the economy and/or the investment markets.