Page Perry’s Market Monitor – May 15, 2009


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 week at 8575 and, on Monday, fell 156 points.
  • On Tuesday, the Dow Jones Industrial Average rose 50 points.
  • On Wednesday, the Dow Jones Industrial Average fell 184 points.
  • On Thursday, the Dow Jones Industrial Average jumped 46 points.
  • On Friday, the Dow Jones Industrial Average dropped 62 points and closed the week at 8269.
  • According to a survey by Bloomberg News, economists are predicting higher than expected unemployment over the next several years. The survey indicates that economists are now projecting an unemployment rate of 9.6% for 2010 and of 8.5% for 2011. The ripple effect of such unemployment levels would be significant.
  • Reports indicate that plans of automakers to close less successful car dealerships could result in the loss of as many as 180,000 jobs.
  • This week Chrysler announced it was terminating 789 automobile dealerships.
  • General Motors has reportedly begun notifying 1,100 of its dealerships that it is terminating their relationship and has plans to cut another 1,500 or so dealerships by the end of 2010.
  • Harley-Davidson may close its main manufacturing plant in Pennsylvania. Some 2,400 jobs are at risk.
  • Nike announced that it was cutting 1,750 jobs worldwide.
  • BT Group, the British phone company, is eliminating 15,000 jobs.
  • Steel maker ArcelorMittal announced that it would lay off 978 workers in Indiana.
  • State revenues fell in 47 states during the first quarter of 2009. Total tax collections were down 12.6%. The loss of revenues will almost certainly result in cuts in state projects and programs.
  • Governor Arnold Schwarzenegger of California has claimed that he may have to lay off 51,000 state teachers or release 40,000 state prisoners if state voters fail to pass budget balancing laws aimed at addressing California’s growing deficit.
  • The Treasury Department reported that the current recession has hit both Social Security and Medicare very hard.
  • More and more companies have frozen their pension plans. Last year 18 companies took this action and 16 more have followed suit this year. Employees get to keep the benefits already received but can’t expect any further contributions from their employers.
  • The federal government announced plans to aggressively pursue violations of antitrust laws.
  • Goldman Sachs agreed to pay approximately $60 million to resolve an investigation into whether it promoted unfair home loans in the state of Massachusetts.
  • In the first quarter of 2009, there were a record 19.1 million home in the U.S. that were unoccupied. This is approximately 14.6% of the 130.4 million homes in the country.
  • The federal government which now owns more than 50,000 homes is having trouble selling them and is expected to suffer billions of dollars in losses as a result.
  • Foreclosure rates soared in April, 2009. They were 32% higher than in April, 2008.
  • Mortgage giant Freddie Mac posted a loss of $9.9 billion in the first quarter of 2009 and is seeking an additional $6.1 billion in federal aid.
  • The United States is on track to have its first trillion dollar budget deficit this year.
  • Retail sales continued to fall in April.
  • AirTran Airways announced plans to make in-flight Wi-Fi service available on all its flights by July, 2009.

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.