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Here are a few looks at the stunning and explosive trends in unemployment. Given the speed and scope of this data, I can only call you absurd if you see anything remotely green (shoots) or positive here.

Given the amazing resilience of the markets, the sustaining positive price action has allowed some longer term technical measures to turn bullish. From Traders Narrative, here is some good news for the bulls, a golden cross in the S&P500.

For the record, however, I am not on board with this. There are so many underlying issues that are driven from the political side that will have massive negative unintnded consequences for all market participants. From auto bailouts, to bank nationalization, to socialized healthcare, to cap and trade energy tax … all leading to less indivudual choice, lower disposible income, and more reliance on government support. As Mish says, we are at intolerable unsustainable levels of government spending and debt. But this is all for the greater good so we are saved ………….. nonetheless, the markets love it! Good luck!

“Vincent Delisle of Scotia Capital looked at 14 previous S&P 500 bull markets (lasting on average 49 months and rising 149%). From these only about 17% of the gains materialized before a golden cross signal was given. After 12 months of a signal the average gain was 23%, implying that a golden cross doesn’t arrive too late to provide forward returns. Delisle adds that a golden cross appears to have more validity when it occurs with a rising 200 day moving average - something we had in 2003 but do not have now.”

By the way, a “death cross” cross is the opposite and can be seen on the above chart marked by a red down arrow.

A must read article from The American Thinker: Obama, the African Colonial - “America, don’t be fooled … the African Colonial who is given too much political power can only become one thing: a despot.”

Here are a few examples of what the British did in order to create (in 1914) what is now called Nigeria and what Obama is doing to you: 

1. Convince the people that “clinging” to any aspect of their cultural (tribal) identity or history is bad and regresses the process of “unity”.
2. Confiscate the wealth and resources of the area that you govern by any means necessary in order to redistribute wealth.   
3. Convince the masses that your upper-crust university education naturally puts you on an intellectual plane from which to understand everything even when you understand nothing.    
4. Lie to the people and tell them that progress is being made even though things are clearly becoming worse.  
5. Use every available media outlet to perpetuate the belief that you and your followers are the enlightened ones-and that those who refuse to support you are just barbaric, uncivilized, ignorant curmudgeons.

For this administration the answer is always more Government

“In this present crisis, government is not the solution to our problem; government is the problem. From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. ” Ronald Reagan

Not there yet …. for any of you comparing the recent decline to previous major market bottoms, we’re about half way there. Now is simply not a great time to buy. Just consider how overextended the market was during the recent peak as compared to the 1929 peak. I bet we overshoot to the downside by just as large a margin.

And from Trader’s Narrative, a similar conclusion; The Federal Reserve released its data for the first quarter of 2009 and unfortunately the estimate by John Mihaljevic was not borne out. This bear market is not finished - at least not according to Tobin’s Q ratio.

A great read at the WSJ, making a great case Inflation and Higher Interest Rates.

“Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That’s more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers’ expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.

With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs — such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid — are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.

About eight months ago, starting in early September 2008, the Bernanke Fed did an abrupt about-face and radically increased the monetary base — which is comprised of currency in circulation, member bank reserves held at the Fed, and vault cash — by a little less than $1 trillion. The Fed controls the monetary base 100% and does so by purchasing and selling assets in the open market. By such a radical move, the Fed signaled a 180-degree shift in its focus from an anti-inflation position to an anti-deflation position.

The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 (see chart nearby). It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless. The currency-in-circulation component of the monetary base — which prior to the expansion had comprised 95% of the monetary base — has risen by a little less than 10%, while bank reserves have increased almost 20-fold. Now the currency-in-circulation component of the monetary base is a smidgen less than 50% of the monetary base. Yikes!”

An excellent related story Parabolic U.S. Treasury Yield Curve Warning of Hyper Inflation .

I just can’t see how this can support an economic recovery. The average consumer is in worse shape than ever before. The bottom line remains: Two thirds of the economy is dependent upon consumer spending, Oil is now ~$70 a barrel (gasoline coming up on $3), and the consumer’s ability to borrow, tap equity, or otherwise live a profligate, unfunded lifestyle has been radically crimped. And consider how many homes have substantially lower incomes due to a 9.4% unemployment rate. I guess we can call the equity rally over the past 2+ months the unfunded rally. Can it continue?

“Despite recent frugality, consumers have barely dented their debt load. The Federal Reserve will offer a fresh peek at that mountain on Thursday, when it releases its “flow of funds” data for the first quarter. By the end of 2008, households were on the hook for $13.8 trillion in debt — nearly matching the $14.3 trillion output of the entire U.S. economy, not adjusted for inflation, that year. Households are shedding debt; they’re just not doing it very quickly. They owed roughly 130% of disposable income at the end of 2008, down only slightly from a record 133% in the first quarter of 2008.”

HOUSEHOLD DEBT-TO-NET WORTH AT AN ALL TIME HIGH

And they funny thing is, looks like the Fed is in the exact same shape: Fed Would Be Shut Down If It Were Audited

“With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview … If the Fed examiners were set upon the Fed’s own documents—unlabeled documents—to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”

So with the consumer and the Fed both essentially broke, the government has cranked up the printing presses, running new money madly. Congress claims the banks just need to lend more to an already debt strapped consumer, just as interest rates start creeping up in a very eery way ………. how do you think this story ends ?? Or does it matter?? I have to think there is a breaking point to all of this unfunded lifestyle.  

I have had it with all this, not sure what to make of the price action and headlines the last 2+ months. Totally surreal. Seems to me as if I am in a fantasy land as the pundits applaud all the actions of this administration, absolutely no challenge to massive changes across the board right before your very eyes. So big and so fast are the changes that you have no time to digest the current event before we are on to the next. Cheelead the green shoots, turning -345k job loss into good news, highlighting +150k of saved jobs in the midst of losing nearly -3 million jobs, taking over the banks, monitor the compensation on Wall Street, taking over the autos in a very questionable way, giving the autos to the unions, then moving right into national healthcare, all the while racking up some $11 trillion in debt over 6 months while claiming to be fiscally responsible in the face of untraceable TARP funds, pushing metals, oil and commodities sharply higher, spiking long end rates, trashing the USD, and never mind the apologies to the world and every two bit dictator taking the opportunity to challenge the US. But I guess this is bullish for stocks.

OK, so now what. I am clueless, so here are 2 sides to the story for your consideration. First, a weekly S&P500 chart from Jesse, suggesting that if we clear the 1000 level, then a head and shoulders bottom is in, and we will see another +20% upside in stocks:

Then we haveRoubini who see the joy over the past 2+ monnths as total complacency, and warns we will see some very tough times ahead:

Dangerous Complacency:

Fed puzzled by yield curve steepening…