No More Sitting on the Fence

I do not have a crystal ball, but the market as a whole is heading down. The green shoot argument is dead. In an Op-Ed section of The New York Times by staff writer Bob Herbert. “No Recovery in Sight” was the heading and his opening sentence asked, “How do you put together a consumer economy that works when the consumers are out of work?” While many argued that the labor market numbers were lagging indicators and a sharp rise is a sign of the ending of a recessionary cycle. But today the American Bankers Association released data showing a rise in home equity and credit card delinquencies. Delinquencies on home-equity loans climbed to 3.52 percent of all accounts from 3.03 percent in the fourth quarter, and late payments on home-equity lines of credit climbed to a record 1.89 percent, the group reported today. An index of eight types of loans rose for a fourth straight quarter, to 3.23 percent from 3.22 percent in October through December, the group said. Delinquent bank-card accounts jumped to a record 6.60 percent of outstanding card debt in the first quarter from 5.52 percent in the previous period, a signal unemployed borrowers are relying on cards as falling prices erode the equity in their homes. More borrowers are using cards to meet daily expenses after losing their jobs, the ABA said. Lets not forget that the "Stress Test" parameters might be breached by early August when GDP comes in lower than expected and unemployment rockets pass 10%. Already politicians and advisers are calling for more stimulus. Well, I will sleep more easily at night having short positions than waking up hoping the futures are higher. Hope never made anyone money!