U.S. Unemployment Benefits/Bankruptcies, Be Critical

U.S. Unemployment Benefits/Bankruptcies, Be Critical,

U.S. Unemployment Benefits/Bankruptcies

An article this morning says 400,000 Americans 'Will Lose Jobless Benefits Next Week', within a month that number will increase to 1.5 million, and will reach 3.0 million by May if the U.S. Government doesn't extend unemployment insurance benefits.  Apparently the House unanimously passed a bill last week extending benefits, but that bill has been held up in the Senate.  I presume the bill till pass, and that once again the U.S. Government (read the U.S. taxpayers) will extend the subsidization of its unemployed.  My view? - subsidization can't continue indefinitely, the standard of living of the average U.S. resident has to drop, and none of this is good for U.S. and economic recovery.

On a different but common note, an article today titled 'Personal Bankruptcies Resume Upward Trend', reported there were 111,693 U.S. consumer bankruptcy filings in February, 14% higher year/year and 47% higher than February, 2008 (when the unemployment rate was 4.8%).  These bankruptcy filings were up 9% from January, following a decrease of 10% in January from December.  The article reports the American Bankruptcy Institute estimates consumer bankruptcy filings could exceed 1.5 million in 2010.  This would be up from a reported 1.4 million in 2009 and just under 1.1 million in 2008.  60,837 U.S. Business Bankruptcies were reported in 2009, 40% higher than 2008.  I won't find it surprising, assuming no real change in U.S. economic activity this year, if 1.5 million proves to be a conservative estimate.

I can't predict the timing of when the 'next big shoe' will drop (i.e. a sovereign debt default, a meaningful terrorist attack, or the U.S. Government waking up and realizing its ongoing subsidization policies are circular, etc.) - and hence can't time the equity markets.  That said, I am convinced a 'big shoe' will drop, and I for one don't want to be standing under it when it does.  Each passing week I become ever more convinced it is becoming more important that equity investors take the time to research and reach their own opinions of what the end-game is likely to be - particularly in the context of their own individual risk tolerance level.  In the meantime I recommend they act conservatively with respect to both their spending and equity investments. As for the U.S. Government and its spending, I see it as a seriously circular problem akin to a child's mechanical top that spins ever faster but eventually runs out of steam and falls over.

Be Critical

In several e-mails I have asked for constructive criticism of both my e-mail content, and of what we are developing at StockResearchPortal.com.  You have what I think is an unusual Internet opportunity.  By communicating your concerns, improvement suggestions, and criticisms to me at info@stockresearchportal.com you are communicating directly with the principal owner and developer of our website.  I answer back, usually the same day.  Try sending an e-mail to the President of Yahoo Finance or Google Finance, or for that matter Thomson Reuters in expectation of being listened to by him/her - let alone receiving a personal response from that President.

I raise this again in a more direct way because while the 2 - 3 e-mails I receive each day from Subscribers typically are complimentary - except for those from an Ontario Superior Court judge friend of mine who continuously notifies me of my spelling and grammar errors - I received an e-mail last week that said I prepared 'nice summaries', had 'an amazing grasp of the obvious', seem to think 'something profound might resonate from a sufficiently elegant-sounding collection of disjointed prattle', but failed to draw conclusions and recommendations in my e-mails.

Rather than be offended by the foregoing, I see such commentary as very useful.  The essence of my reply e-mail was (word for word):

"Thanks for your note.  It is your type of comment I find particularly valuable as I work to improve both StockResearchPortal.com and my e-mails.  Please know that whether I hear further from you or not, I will consider your comments seriously as I go forward with my e-mail writing."

The upshot of this is:

·           I will work to include conclusions in my e-mails that are recognized as such by readers, and will also work to make recommendations in my e-mails were I think they are both realistic and practical; and,

·           please take advantage of the fact you can communicate directly with me, that I welcome criticism, and that you can make a meaningful contribution to the development of StockResearchPortal.com as a meaningful 'Resources Research Site' for your own benefit and that of other equity investors looking to improve the investing knowledge and skills.