How Screwed is Your Town?

Interesting piece from McClatchy shows when employment in different parts of the country is expected to recover. Looks piss-poor for SoCal!

Sell Sell Sell!

From Reuters:

Technical analyst Robert Prechter on Monday said he sees the United States losing its top AAA credit rating by the end of 2010, as he stuck by a deeply bearish outlook on the U.S. economy and stock market.

Prechter, known for predicting the 1987 stock market crash, joins a growing coterie of market heavyweights in forecasting the United States will lose its top credit rating as the government issues trillions of dollars in debt to fund efforts to bail out the economy.

Fears about the long-term vulnerability of the prized U.S. credit rating came to the fore after Standard & Poor's in May lowered its outlook on Britain, threatening the UK's top AAA rating. That move raised fears that the United States could face a similar risk, with the hefty amounts of government debt issued in both countries to pay for financial rescues causing budget deficits to swell.

Prechter, speaking at the Reuters Investment Outlook Summit in New York, said he sees investors' confidence in an economic rebound fading, a trend that will drag the S&P 500 stock index .SPX well below the March 6 intraday low of 666.79 by the end of this year or early next.

Gold Rollercoaster

Here's Prof. Lewis from Minyanville explaining the volatility in gold:

I suppose some gold bulls are upset that a story in the Wall Street Journal said the Federal Reserve is unlikely to boost its purchases of Treasury bonds, so some might think this has removed a near-term upside catalyst. Who knows? (I’m not sure I buy that story’s message either, incidentally).

But let me emphasize: Gold is a long-term play. The US government has only 2 options: default or debase. Both lead to more inflation. What the Fed “wants to do” is irrelevant. What it will be forced to do is all that matters, and it will be forced to monetize more government debt this year. Whether that's in June, July, or August doesn’t really matter. The picture hasn't changed.

Gold bulls need to always be prepared to take violent swings, just as short-sellers in the financials did last year. Like those sellers of financials, gold bulls will get paid off big at the end of the day if they stick to their convictions.