Unemployment and Retail

I am on a rant today!

This morning showed 621K Americans filed for unemployment benefits. All you hear is we have hit the bottom because 4000 less people filed than last week. Is 4000 really an improvement? Come on! 621K still filed. It will only get worse with the automaker bankruptcy fallout. I'll bet tomorrows non-farm payrolls will be weak, but the market will shrug that off. And last months number, I'm sure, will be revised so no one will notice. What are the silver linings here?

People are not spending money. People have less money and wealth to blow away. The home equity ATM is empty and it's not getting re-filled.

We have a rally because of inflation (dollar decline and commodity speculation). There are no 'green shoots' with this rally. The American consumer will get squeezed to the last drop with $3-$3.50 gas again. Crude demand is not back. It's just that our friends at Goldman Sachs and others bought boat loads of crude at $35-$40 (literally) with TARP money. Then they talk their book that crude will reach $85 by years end. Once it hits $75-$80 they will sell it and pay back TARP at the cost of the American consumer. Once again a painful summer for the average American.

Click: Oil Climbs to 7-Month High as Goldman Forecasts Rally to $85 (Bloomberg)

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