If Crude oil Breaks Through $53, It’s a Screaming Buy

Dear Value Seeker,

America’s job losses have come into sharp focus again today.

The New York Times calls it a “rising tide.” It’s more like a tsunami…

Initial jobless claims for the week ended January 17 shot up by 62,000 to 589,000. This is the highest weekly rise in unemployment since November 1982.

Meanwhile, Microsoft ensured an abrupt reversal of yesterday’s stock market rally by warning that it was “not immune” to the recession.

The tech giant also announced it would give 5,000 workers their marching orders, including 1,400 today.

Microsoft joins a long and growing list of blue chips that have announced job cuts in 2009.

It’s a list The Wall Street Journal’s Real Time Economics blog is tracking:

John Crooks says currencies dependent on commodities are in for a very tough 2009. He says weak global demand and a marked slowdown in China will keep commodity prices low. And that’s bad news for resource-rich Australia. John says a looming recession, widening trade deficit and interest rate cuts will send the Aussie dollar plummeting this year.

This from The Sovereign Society:

Over the next six to eight months, our core trading strategy is based on three key ideas:

1. Global demand will continue to deteriorate 2. China will surprise on the downside 3. Commodities prices will sink back to their 2001 levels

Based on these three views, my trading partner Jack Crooks and I are bearish on currencies that depend on commodities to support their growth. And within the pack of commodity players we are most bearish on the Australian dollar.

Right now, Australia is effectively a satellite country of China.

John Crooks says the US dollar is one of the few bullish currencies for 2009. Investors can profit by going long on dollar ETFs, or shorting other currency ETFs. But to make really huge returns, John recommends using options and investing in the exotic currency markets.

This from Sovereign Society:

The hardcore dollar bears said we were crazy for even mentioning the idea that the dollar could rebound during all this economic turmoil.

How could the dollar possibly rally during the worst financial crisis in a generation? (That was a year ago before we knew how far and wide the credit crunch would reach.)

But the fact is, that’s exactly what’s happening now.

I’ll admit that the dollar didn’t rally right away. It took months. In fact, the dollar index didn’t bottom until the day after the Fed bailed out Bear Stearns.

But then, the dollar slowly started to creep higher. And since

China is not immune to this global recession, says John Crooks. And as the ‘world’s manufacturing plant’ stumbles, it will take down many others with it. Emerging economies that relied on China buying raw materials will be hit hardest. And any developed nation with exposure to these markets will be dragged down too.

This from The Sovereign Society:

If you want to know how far this recession has stretched, look no further than China.

Up through this year’s Olympics, China seemed to be well on her way to becoming the next global economic kingpin. And with good reason.

China has had the fastest growing economy in the world for decades. The Chinese government has amassed trillions in reserves, while building up a trade surplus just last year of US$262.2 billion.

But lately, China’s fundamentals have been breaking down, one by one, like massive dominoes…

Dear Value Seeker,

USA Inc today announced another 30,000 job cuts…

Telecoms giant AT&T led the cull. It said 12,000 of its workers would now be joining the ranks of the unemployed.

The Labor Department says the total number of Americans receiving unemployment benefits as of November 22 rose to 4.09 million.

It’s the highest number since December 1982.

And more jobs could go in the retail sector, judging by today’s sales reports.

Analysts will no doubt agonize over the individual results. But we think David Gaffen from the WSJ MarketBeat blog sums it up perfectly with his headline “Wal-Mart Wins. Everyone else loses.”

Things are happening just as they should in a balance-sheet recession, says my dad, Bill Bonner, in today’s Daily Reckoning.

“People are getting fired for a very good reason: businesses need to correct their balance sheets…and redress their business models. They have to

In forex trading, there has to be a winner for every loser. John Crooks says the US dollar is set to be “king of the hill” in 2009. He says forex traders don’t care about the damage being done to the US economy. The greenback has become a “safe haven” for investors rushing into cash. And that trend isn’t about to change anytime soon.

This from Sovereign Society:

Yesterday, I told you all about the four currencies whose values promise to drop like rocks next year, thanks to the worldwide recession. And each of these presents substantial trading opportunities.

But the flipside to falling currencies is rising currencies. By definition when one currency goes down, it goes down in relationship to another. In this case, the U.S. dollar.

While most major currencies slumped, the dollar made the ultimate comeback in 2008 just in time for the U.S.’s greatest financial challenge since

Dear Value Seeker,

Yesterday, the “Big Three” automakers came to Washington with a plan: ask for even more money.

GM wants $18 billion, with $4 billion for December’s bills.

Chrysler says it needs $7 billion in the next few months.

Ford is after $9 billion…but only as a precaution. It feels pretty confident it can make it without help.

After all, Ford’s sales fell only 31% year-over-year in November. GM and Chrysler both saw sales for the same period tumble by over 40%.

In exchange for $34 billion in taxpayer money, the automakers promised major restructuring, reduced labor costs (that’s right, it’s promising to fire employees in return for taxpayer backing) and the sale of some product lines.

The CEOs even said they would even work for $1. (Never mind that their salaries only make up about 10% of their overall pay packages.)

But decades of waste and mismanagement aren’t forgotten

2009 could the first global recession since the 1930s, according to a UN report. But John Crooks says forex traders can use the economic slump to make big profits. He picks four currencies that will be “on the chopping block” for 2009.

This from The Sovereign Society:

The U.N. is predicting the first worldwide recession since the 1930s … for 2009. If that wasn’t bad enough, developed nations are supposed to shrink up to 1.5%. “It seems inevitable that the major countries will see significant contraction in the immediate period…even if the bail-out and stimulus package succeed,” according to the report. In other words, the recession may have spared Black Friday 2008, but next year, the worldwide recession will cut into worldwide spending even further. In the currency markets, you can already see that four currencies will suffer next year as the U.N.’s prophecy comes true…

The Four Currencies