Philly Fed: The Choice Corner is Now!!!

Reference material borrowed from The Ticker Guy (Karl Denninger).

We have arrived folks. The many convoluted early-20th century financial instruments have been set up and matured, the timer was beeping through the 70's, then a mini-spark went off in 2008. Keeping things on a national level, the diffusion index has dipped sharply. What's a diffusion index? Investopedia defines it as:

A measure of the percentage of stocks that have advanced in price or are showing a positive momentum over a defined period. It is used in the technical analysis of stocks.

So having a sagging diffusion index is generally not good for an area; as both the current outlook and future outlook are not optimistic. Stock prices showing growth generally indicates a good level of employment and great demand for the product that the companies that issue the stocks provide. Also the local housing markets have an impact on this index as well; since happily employed workers can afford these houses and fill them with nice stuff. The diffusion index that the Philly Fed issues in the upcoming chart is a average of all companies.

Notice how the forecast is much more optimistic than current activity? But that's actually not the main thing I want you to pay attention to. Take a look in the grayed in area of the chart between 07 and 09. That was the diffusion index during the collapse of '08. Notice how the current levels are dipping down to those older levels? What can we draw from this?

Well, there are several conclusions that I came up with (feel free to add your own in the comments):

The recession never ended!!!

Whatever positive generation occurred happened due to a market "correction".

Some creative book-keeping occurred.

The United States have become a highly seasonal area to work and trade in...

Heap all that on top of a helping of garbage housing market and bunk markets from Europe and you'll draw some ultimate conclusions as to why the markets sagged roughly 450 points yesterday. On a side note: Check this SEC investigation of S&P; the government thinks they can smack S&P around for giving sub-prime mortgages the ol' AAA rating while downgrading ours.

What am I leading to? It's time to stop listening and start doing!!! What do I mean by "doing"? Well, anything you can think of! If your idea of doing is grabbing all the metals you can and wait for hyperinflation, do that! If your idea of doing is getting these politicians to do something, than do it (though in my humble opinion it has been a long time since we can rely on a politician for change)! Put some good people in the Senate next year! Is slowly weening yourself from all paper financial systems your idea of "doing"? Well, it's never too early to start! Simple networking is good too. The conscious of this area is awakening, I can feel it every time I leave work for lunch. Less people talk sports and more people talk about the Constitution, what's good for the country, how to change the direction, and so on and so forth.