The employment numbers shows what happened in the economy in the last few months. The economy is losing momentum in spite of some gain in the service side of the economy. The manufacturing is suffering. The real estate is in deep slump. The ISM services number that used in 60s is now in 50s. The ISM manufacturing number is struggling keep above 50.
The personal spending is down. The consumer sentiment is collapsing and the business sentiment is at all time lows. There cannot be any fundamentals worse than this. The deflation has just started and spreading to the main streets very fast.
The worse is the auto and the real estate sector. The service side of the economy is the only hope. But auto, manufacturing and real estate will drag that down too.
The deflation has spread to the healthcare sectors too. The next severe deflating prices are coming in the healthcare sector. WalMart and others will enter the business in mega proportion shifting the rug out under the feet of the healthcare industry.
Dow has gone up relentlessly because of almost tax-free dividend play. The hedge funds are fully invested. Soon there will ads looking for “Bulls” as most of they knee deep in the stock market.
What can now happen?
The answer is simple. The South Pole all on a sudden looks brighter tan the North. You guessed it – a catastrophic crash will take the chin out of the market.
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