Banks are now going to have to lend money in an environment where more and more people are losing their jobs. Standards are higher; even when people meet those criteria, we're still hearing war stories that loans are being denied. The employment-population ratio is at a level not seen since 1993.


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Reality is a bitter pill to swallow. This plan could be DOA for many reasons, not least of which is that banks may simply refuse to lend money. The economy isn’t going to snap out of it right away. Look for more stimulus packages, Fed rate cuts, dramatic steps by global central banks, and bailout packages around the world.

The Week Ahead

There are some important economic reports this week, but nothing that could single-handedly alter the economy. This is a week that could reveal the soul of investors, because there won't be quite so many things to react to, and they'll just trade (or not) of their own volition.

The S&P 500 is obviously in the perfect down-channel marked by violent swings. Look at the move lower versus the orderly and steady move higher that began in March 2003, which is a sign of fear and confusion. I guess there could be some support at 1,080, but the next real support point comes at 960.


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