How do you like this recovery? Pretty good, huh? Except for the jobs, of course. And except for the retail sales. And except for the foreclosures… and house prices. And incomes. And consumer prices. And business profits. It’s like a female impersonator… just like a real woman in every way, except for the essential ones.

At least stocks are doing well. The Dow rose another 36 points yesterday. In terms of time, it’s already beat the bounce of ’30… it’s in its 6 th month. In terms of stock prices, it’s still a laggard, however. US stocks are up about 45% from their low of 6,547 on the Dow. By that measure, the current reading of 9,398 falls a little short of the 50% increase registered 5 months after the ’29 low.

Yesterday’s news was a big disappointment for mainstream economists. It’s ‘back to the drawing board,’ says the Wall Street Journal.

The

Job market takes another turn for the worse… unemployment data at 26-year high… Government solution:spend… budget and trade deficits swell more than expected… Byron King on falling oil demand… and what it means for long-term investors… Gold soars… Ed Bugos with some fresh price targets… Signs of the times… Chinese bank opens in U.S., world’s biggest LBO collapses… Plus, Chris Mayer on the automaker bailout

Americans filed over 573,000 jobless claims last week — the most since 1982.

The Labor Dept. also said the number of people collecting unemployment reached a 26-year high too, 4,429,000.

Unfortunately, we’re just getting started if a study released this morning by UCLA is accurate. The Anderson School of Management predicts we will see negative GDP for the current and first two quarters of 2009… and the unemployment rate to

And now that the governments of America have literally become the economy (and paying themselves handsomely in the process!), there is no way that the government can be allowed to shrink…

The U.S. Department of Commerce says that, the way it looks to them, even after spending a lot of time adjusting and smoothing and rounding the data so that things look as good as possible, third-quarter Gross Domestic Product is going to be down again - like this is some Big Freaking News (BFN) to us guys out here who are either being laid off, or hearing rumors that we are going to be laid off, or listening to other people yammering about how they were laid off, or being blamed for profit shortfalls and statistically poor performance, but which they calculate without any “smoothing” factors like how the customers are all a bunch of idiots and so are my

Key News• Iceland's central bank unexpectedly raised the benchmark interest rate to 18 percent, the highest in at least seven years, after the island reached an aid agreement with the International Monetary Fund. (Bloomberg)• Interbank cost of borrowing funds fell across the board on Tuesday, according to the latest daily fixing from the British Bankers' Association, as the recent turmoil on financial markets eased. (Reuters)• Key Reports Due (WSJ):7:45a.m. ICSC/Goldman Sachs Chain Index For Oct 25: Previous: -1.6%. 8:55a.m. Redbook Retail Sales Index For Oct 25: Previous: -1.1%. 9:00a.m. Aug S&P/Case Shiller Home Price Index: Previous: -17.9%. 10:00a.m. Oct Conference Board Consumer Confidence: Expected: 52. Previous: 59.8. 10:00a.m. Oct Richmond Fed Mfg Survey: Previous: -18. 5:00p.m. ABC/Wash Post Consumer Conf For Oct 26 Previous: 50. Two-day FOMC meeting begins.

Quotable "A good conspiracy is unprovable. I mean, if you can prove it,

Key News• Global stocks plumbed multi-year lows as fears of a global recession mounted. London’s FTSE 100 dropped below 4,000, and there were sharp falls in Asia and across Europe. Futures pointed to a 550-point fall for the Dow. (FT)• Key Reports Due (WSJ):10:00a.m. Sep Existing Home Sales: Expected: +0.4%. Previous: -2.2%.

Quotable "But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime."

  Frederic Bastiat

FX Trading – Just when it started to look safe for a dollar correction…Though we luckily have not had the experience, and the physical pain is obviously different, this move in the dollar today seems