Goldman reports earnings tomorrow morning.

Could it be that even God will be watching CNBC tomorrow morning at 830am?

That's when Goldman Sachs will report its first ever quarterly loss in its 80+ yr history as an investment bank.

A fitting end to the latest go-go Wall Street era.

The market has a consensus earnings number in mind. CNBC reports on it here.

Even though earnings are a lagging indicator, most of the market will be looking to see how bad the earnings number is tomorrow morning.

It will be viewed as a barometer for how bad things really got in the fall of this year and perhaps even as a signal of how bad things are going to get early in 2009.

Stay tuned.

Good news! Barack Obama is effectively the President already.

That's right. You dont have to wait till Jan 20, 2009 as I previously thought. He is pretty much running the show already.

Remember Barack's first press conference where he said "we only have one president at a time in this country"? He was right. It's him.

After that first press conference he went to visit W in the White House and his tone dramatically changed after that meeting. Does anyone want to bet that W in so many words acknowledged that Barack Obama should be more involved going forward?

He knows the people want him to take charge and he is delivering. Listen to him speak. When was the last time we had a President who was intelligent enough to think about a problem from many different perspectives?

I will give you a hint... think Bubba. Yes it was Bubba despite all his shortcomings.

I would really like to say it was a Republican president b/c the economist in me says I am more closely aligned w the conservatives b/c its the GOP that typically supports free market ideologies.

But it would be a lie if I did that.

Ben Bernanke and the rest of the feds might as well drop money from airplanes... that's the only thing left to do at this point

Automaker CEOs are starting to get the picture

Earlier today, the CEOs of the big 3 US automakers made their way to D.C.

This is interesting b/c last time they actually drove in their cars this time. The last time they went to Congress to beg for money before the Thanksgiving break they flew in their corporate jets.

Congress blasted them for this and asked them if they would drive the next time they came. Upon returning to Detroit, they put the corporate jets up for sale. (I dont know if they put them up on ebay like Gov Palin.)

They also seem ready to accept virtually no salary if they end up using gov't money for a bailout. This is a good first step for them.

Seems like they will get the money they want.

Thankfully, this time around it will come w strings attached.

U.S. Recession officially started in December 2007

The National Bureau of Economic Research (NBER) claims the current recession in the US officially started in December 2007.

You can read the article here.

This is interesting partially b/c the NBER did not follow the typical definition of recession this time around. Typically, a recession is declared when we have had at least two consecutive quarters of negative GDP growth. While this is not the official definition it certainly is one that I and many other people thought to be a widely accepted one.

This time around dating the recession back to 12/2007 really has more to do w the peak in employment during the last bull market which occurred back in late 2007.

It is also interesting b/c it makes the recession 1 yr old already. Psychologically that is a long time. And it may well be late 2009 before the recession is declared over.

There is a strong possibility this could be a 2 yr recession which is long by post-WW2 standards.

Market Perspective 11/25/2008

Here is my take on the markets this week -

• GDP number for Q3 2008 was revised down to -0.5% from 0.3%. Not a big deal in the grand scheme of things.
• Most other data revealing the state of the economy right now (i.e. 4Q 2008) suggest SERIOUS negative economic growth. Think something like -5% annualized. The last time we saw data this bad was 1980-1981.
• Unemployment data deteriorating at an accelerated pace. Peak unemployment very likely to be 8.5-9% in the first half of 2009. This number is moving fast. Keep an eye on it. We are in a heap of problems if the peak number moves past 10%.
• Most economists now saying 2009 is lost which means it will be 2010 before the economy even thinks about getting better.
• Watch out for what happens w the automakers. They will likely get the $25bn they need from Congress, but not w out strings attached. We should all hope they get this money right now if for no other reason than not giving them the money at this very moment in time will literally send the economy into a death spiral. This is not what we need right now. Long term, we should focus on the problem of the automakers as a country but we cant just let them go cold turkey. We have to downsize the automakers in an orderly fashion over the course of several years.
• One big thing the market was looking for was for Obama to step up to the plate and take more control over the economic situation. Previously he said he wasnt the President until Jan 20. The market didnt like that. We want him to announce his economic team which he did this week and last. Since W is pretty much a lame duck at this point, everyone was loking to Obama to be more vocal about his intentions on Jan 20. Obama got the message and has been more active about communicating his intentions on how to deal w this economic crisis. Market rallied on this news.

If you have been watching the stock market recently, you know the market has been forming something of a bottom at recent levels. This bottom is a very delicate one in my opinion. Any news that the deterioration is accelerating is going to be a problem for the markets to handle. Automakers need to get their money w strings attached.

Cross your fingers...