Stocks are falling at the close of trading as investors’ attention returns to the weak economy and Europe’s debt problems.

The Dow Jones industrial average is down 519, or 4.6%, to 10,720. It’s the third time in the last five trading days that the Dow lost more than 500 points. The S&P 500 is down 51 points, or 4.4%, to 1,121. The Nasdaq is down 101, or 4.1%, to 2,381.

European bank stocks fell on worries that the region’s debt problems are getting worse. That pulled down U.S. bank stocks. Financial stocks in the S&P 500 lost more than 7%.

The drop erases Tuesday’s big gain following a Federal Reserve pledge to keep rates low. The Fed said it expects the recovery to remain slow.

Meanwhile, Obama met campaign workers for lunch at Ted’s Bulletin, a new Capitol Hill restaurant that serves classic American food, including burgers and shakes.

Last week, Obama treated a group of senior aides who were involved in negotiations over the government’s finances to burgers and shakes at a different Capitol Hill eatery.

Courtesy:  Detroit Free Press/AP

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A familiar air of indecision preceded President Obama’s pep talk to the nation.

The first draft of his schedule for Monday contained no plans to comment on the downgrading of the U.S. credit rating by Standard & Poor’s. Then the White House announced that he would speak at 1 p.m. A second update changed that to 1:30. At 1:52, Obama walked into the State Dining Room to read his statement. Judging from the market reaction, he should have stuck with his original instinct.

“No matter what some agency may say, we’ve always been and always will be a AAA country,” Obama said, as if comforting a child who had been teased by the class bully.

When he began his speech (and as cable news channels displayed for viewers), the Dow Jones industrials stood at 11,035. As he talked, the average fell below 11,000 for the first time in nine months, en route to a 635-point drop for the day, the worst since the 2008 crash.

It’s not exactly fair to blame Obama for the rout: Almost certainly, the markets ignored him. And that’s the problem: The most powerful man in the world seems strangely powerless, and irresolute, as larger forces bring down the country and his presidency.

The economy crawls, the credit rating falls, the markets plunge, and a helicopter packed with U.S. special forces goes down in Afghanistan. Two thirds of Americans say the country is on the wrong track (and that was before the market swooned), Obama’s approval rating is 43 percent, and activists on his own side are calling him weak.

Yet Obama plods along, raising gobs of cash for his reelection bid — he was scheduled to speak at two DNC fundraisers Monday night — and varying little the words he reads from the teleprompter. He seemed detached even from those words Monday as he pivoted his head from side to side, proclaiming that “our problems is not confidence in our credit” and turning his bipartisan fiscal commission into a “biparticle.”

He reminded all that the situation isn’t his fault (the need for deficit reduction “was true the day I took office”), he blamed the other side (“we knew . . . a debate where the threat of default was used as a bargaining chip could do enormous damage to our economy”) and he revisited the same proposals he had previously offered to little effect: extending unemployment benefits and the payroll tax cut, and spending more on infrastructure projects.

This, he said, is “something we can do as soon as Congress gets back,” along with further deficit reduction. “I intend to present my own recommendations over the coming weeks,” he said.

Over the coming weeks? As soon as Congress gets back?

In the White House briefing room after Obama’s statement, the press corps grilled Jay Carney about the lack of fire in the belly.

“The president said our problems are imminently solvable, and he talked about a renewed sense of urgency,” CBS’s Norah O’Donnell pointed out. “Why not call Congress back to work?”

Carney chuckled at this suggestion.

“I mean, the Dow dropped below 11,000 — where’s the sense of urgency?” O’Donnell persisted.

The press secretary uttered something about the founders and the separation of powers.

NBC’s Chuck Todd was not swayed. “Why not bring Congress back now?” he repeated, pointing out that “the American public seems to be in a little bit of a panic” while Washington says, “We’re going to stand back and wait until school starts.”

“I think we’re getting a drumbeat here,” Carney said. “The press corps is leading here — always appreciated.”

At least somebody is.

Various reporters tried to elicit more information about Obama’s economic plans and deficit-reduction proposals, but Carney declined again to take the lead.

“I don’t want to get too far ahead of the process,” he explained to the Wall Street Journal’s Laura Meckler, adding that Obama “will be contributing to that process, not driving it or directing it.”

“Why?” inquired Politico’s Glenn Thrush. “He’s the leader of the free world. Why isn’t he leading this process?”

That is the enduring mystery of Obama’s presidency. He delivered his statement on the economy beneath a portrait of Abraham Lincoln, but that was as close as he came to forceful leadership. He looked grim and swallowed hard and frequently as he mixed fatalism (“markets will rise and fall”) with vague, patriotic exhortations (“this is the United States of America”).

“There will always be economic factors that we can’t control,” Obama said. Maybe. But it would be nice if the president gave it a try.

Courtesy: Washington Post

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The stock market is poised today to do something it has not done in over 33 years: Decline for nine straight sessions.

The last time the Dow Jones Industrial Average DJIA -4.31% did that, in fact, was Feb. 22, 1978, when Jimmy Carter was president and the country was struggling to come to grips with a period of anemic economic growth and high inflation.

Isn’t it comforting to know that we’ve made such progress over the last three decades?

Actually, about the only thing that is comforting in the historical data on Dow losing streaks is that many of them have occurred near major bear-market bottoms.

For example, before February 1978, the previous time the Dow declined for nine straight sessions was in October 1974. That came just two months prior to the end of the punishing 1973-74 bear market.

Does a streak of nine losing sessions in a row increase the odds that the market will rise on the 10th? Unfortunately not.

In more than a few of the past cases in which the market dropped that many days in a row, the market continued dropping for at least another day.

In fact, the all-time record for number of days in a row in which the Dow fell appears to be 14 — a streak that ended on Aug. 13, 1941, as the rumblings of World War II were reverberating through Wall Street.

The number of long-term unemployed workers – those out of a job for six months or more – remains at near-record levels, an ominous sign that could derail any economic recovery.

That’s the conclusion of a report from congressional Democrats that recommends new job search and training programs to help the long-term unemployed get back to work.

About 42 percent of the nation’s 14.4 million jobless are considered long-term unemployed. That includes disproportionately high rates for workers 55 and older, those with only a high school degree, workers in construction or manufacturing and African American workers.

The report from Congress’ Joint Economic Committee says many of these workers suffer because their skill sets no longer fit the needs of hiring employers. It suggests more investment in job training.

Courtesy:  Market Watch and AP

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We’ve all heard about the Dow plunge of 1,000 + points before it eventually closed down just about -350 points.  Originally, there was speculation that someone pressed a “B” for billion instead of “M” for millions.  The SEC investigators are now saying that that may not be the case and the White House says that they can’t rule out sabotage by an outside government or group.  Could the New York Stock Exchange been a victim of electronic terrorism?  It’s a real possibility.

While the White House publicly admonishes BP for the oil spill in the Gulf and talks tough, behind the scenes the Obama administration has granted oil and gas companies at least 27 exemptions from doing in-depth environmental studies of oil exploration and production in the Gulf of Mexico. The waivers were granted despite President Barack Obama’s vow that his administration would launch a “relentless response effort” to stop the leak and prevent more damage to the gulf. One of them was dated Friday — the day after Interior Secretary Ken Salazar said he was temporarily halting offshore drilling.  I’m not upset about the waivers, but I am bothered by the hypocrisy and doublespeak of this administration.

Canada took another step toward solidifying its transformation of the country to Socialism yesterday. In an 8-1 ruling, the Supreme Court ordered the National Post daily to hand over to police documents obtained from a source in 2001 alleging a former prime minister’s involvement in a loan scandal. The court recognized the public’s interest “in being informed about matters of public importance that may only see the light of day through the cooperation of sources who will not speak except on condition of confidentiality.” Canada’s judiciary was urged to respect promises of confidentiality given to a secret source by a journalist or an editor “in appropriate circumstances.” But the public’s interest “is not absolute,” the court ruled. “It must be balanced against other important public interests, including the investigation of crime.

Finally, on this Saturday, there’s one thing we can be sure of, as more people lose jobs, as European countries fail, as terrorist continue to threaten our nation, and as the stock market drops Obama will be working hard on the back nine with his putter in hand trying to sink that birdie.  That’s how our president rolls.

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There are so many things to talk about this evening.  We had the Dow, which plummeted over a 1,000 points today, and finally finished down nearly 350 points.  Fear of PIIG ( Portugal, Ireland, Italy, Greece) defaulting on their loans has sparked sharp sell offs recently.  These fears aren’t contained to just these countries, investors believe that the United Kingdom may default on its debt.  What do all these countries have in common- socialist governments.  These countries continue to borrow, spend, and increase taxes in order to subsidize government social programs.  As they raise taxes, less revenue is brought in, because the incentive to work is eliminated while the incentive to not work is rewarded.  The crisis in these countries are a harbinger to what the United States will soon face unless we control our debt, but cutting spending and eliminate the incentive to not work.

Did you hear about the student they were suspended for wearing a t-shirt with the American flag yesterday?  Yes, the principal of a school sent students home for refusing to turn their t-shirts that were displaying the American flag inside out, because the principal said that it could incite violence.  Yesterday was cinqo de Mayo and the principal didn’t want to offend any Mexicans. I guess liberals feel that Mexicans would be offended in America, sitting in an American school, getting an American education, paid for by American taxpayers if Americans wore t-shirts with American flags.

So, did you hear about the Black only field trip for an elementary school in Ann Arbor, Michigan?  Probably not.  While civil rights groups in Wake County in North Carolina complain about the ending of busing in the county, in Ann Arbor Black students were taken on a field trip to hear a Black rocket scientist while White and Muslim students remained in class. District spokeswoman Liz Margolis said after the trip was over, those who went returned to their fifth-grade class and were greeted by boos by those who didn’t go on the trip. Margolis said Principal Madison, who is black, heard the boos, and went to talk to the class. She said he and the class had a “discussion” about race issues. “He wasn’t yelling at them. He was very passionate about it,” Margolis said.  Parents have complained he was yelling at the class and belittled a Muslim girl who said she also had experienced racism and discrimination.  This type of discrimination is accepted by liberals.  I suppose the Principal will get a raise for his “insight” and perhaps a  special visit by Al Sharpton who will pat him on the back.

Did you hear about the 13 story mosque (yes 13) going up next to the site of the 9-11 terror attack in New York City? Two Muslim organizations have partnered to open the mosque and cultural center in lower Manhattan, saying the $100 million project will create a venue for mainstream Islam and a counterbalance to radicalism. Some 9-11 families are upset that a mosque would be built in one of the damaged 9-11 buildings.

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There were some who questioned my judgment when I told anyone who would listen to buy banking and insurance stocks back in April.  Those who took my advice, doubled, and in some cases, quadrupled their money.  Last week, I advised friends and family to sell their stocks.  And, again, my judgment was questioned.  Today, some of those very same people are kicking themselves.  Not me.

While those who failed to heed my advice lost money, I shorted the market and made money- a significant amount of money.  Now, I don’t portend to know what the market will do everyday, but what I do know and understand are how the markets work.  I watch, read, listen, digest, and use commonsense and instincts to make solid investment decisions.

I said last week that the market was over-bought and that there was no solid economic news to support the steep rise in stock prices.  I recommended that holders of securities liquidate their positions and wait for a 5-10% pull back in the market before getting back in.  In just the past two days, the Dow has lost more than 2.5%.  I’m anticipating a continuation of this decline as the August jobless rate is released on Friday.

Let’s be honest, the economy is not getting better.  In fact, it’s getting worse.  It will continue to deteriorate  as long as our government continues to have deficits at more than 10% the Gross Domestic Product and as long as they continue to increase taxes to fund discretionary programs.  Time and again, it’s been proven that across the board tax cuts provide a stimulus to the economy and helps to create jobs.  Unfortunately, we have leaders who are unwilling or too obstinate to admit that government spending hinders economic growth.

Unless this President and this Congress take a step back and curtail their runaway spending and provide tax breaks to businesses and taxpayers, I am predicting a double-dip recession that will take 3 more years to recover from.

For those of you who heeded my recommendation to sell, I’m happy for you.  And to those who suggested I was wrong. I told you so.

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