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To: westpacific who wrote (6079)	10/1/2010 11:05:20 AM
From: Rarebird	Read Replies (2) of 26251

The bottom line here is that the market is assuming that the double dip scenario is off the table. However, consider that the weakness in the consumer sector I observed early in the summer months occurred concurrently with the expiration of extended unemployment benefits beyond 26 weeks. All those persons who were unemployed more than 26 weeks, over half of all those millions out of work, suddenly lost all of their insurance benefits for a couple of months, causing a sharp dip in consumer spending (that was reflected in the Consumer Metrics Institute chart for that period at the time). If that was the cause of the sudden weakness in the economy, the resumption of those benefits in July may have been the cause of the (slight) pickup in economic activity over the last couple of months. That bump up appears to be petering out right now, however, and it may be that the double-dip scenario was never really off the table. As I mentioned yesterday, I'm looking for a sharp decline in the market from immediately after the elections into year-end. That could be the Point of Recognition that a second, and much more severe, decline in the economy, has finally arrived.

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