by guest author: Adam Lass http://taipanpublishinggroup.com

Impressed by yesterday’s breakout? No, not really! In fact, I think you should short the pants off it.

I may as well start the column with the question everyone is asking me.

“If everything is as bad as you guys say, if the shoots are all shriveling, if banks are all screwed, if the technicals are calling for a whopping breakdown, why is the Dow breaking out?”

Are things really better all around than your erstwhile bearish correspondents have been telling you?

The simple answer is “no, it’s not.” And also, “no, they’re not.”

Facts vs. Slogans

Let’s address that second denial first.

As much as the cheerleading squad might wish to muddle the issues, the basic facts of the matter remain quite clear. Every honest economist concedes that the recession will continue through the rest of 2009 and into 2010.

We have become so numb to the word recession that many investors …

If our report of earlier in the week wasn’t bad enough about the British economy, more figures have come to light that suggest it’s almost in free fall, so rapid is the downturn. It’s a slump that is being repeated in more and more of Europe. The Irish economy is moving closer to recession, and now economists say that Denmark, Portugal, Italy and Spain are hovering on the brink as the European Central Bank prepares to lift rates tonight (our time) by 0.25% to 4.25%. That rate decision could very well change the dynamics of markets here, in Europe, the US and Asia. A rate of 4.25% from the ECB, compared to 2% from the US fed, has the potential to cause more damage to the US dollar, drive commodity prices even higher, especially oil, and further boost inflation. Commodity prices moved up sharply overnight with oil above $US144 a barrel, copper hitting a ...

After stock markets have held up bravely in the face of the credit crises and mounting economic woes, a combination of renewed concerns about the financial sector, a record-breaking spurt in the oil price, and a rotten unemployment number claimed their toll on Friday, triggering a sharp sell-off in most parts of the world.

“Today was a bona fide panic day. They threw ‘em in,” said Richard Russell, author of the Dow Theory Letters for the past 50 years. The bears were out in force, as personified by Bill King (The King Report): “The technicals, seasonals, fundamentals and financial system conditions are negative. And now the Fed

…

Thank you Barry L. Ritholtz at THE BIG PICTURE for putting today's 260+ decline in the DOW in perspective. This morning's data may have made things appear worse. Providing a glimmer of hope that the U-3 unemployment rate isn't as bad as it appears, an unexpected surge in teenagers and 20-25 year olds is responsible for a chunk of the unemployment jump. More from Barry: Also possible -- a seasonal adjustment that was expected in June failed to pick up more teens applying for jobs in May "The government cautioned that the scope of the increase in the unemployment rate in May could be a statistical distortion. Month-to-month changes from April ...

Soaring oil prices were mostly to blame for the past week’s stock market sell-off, but renewed concerns about US economic growth, corporate earnings and mounting angst about inflation pressures also featured prominently in determining the market’s fate.

David Fuller (Fullermoney) commented as follows: “As the world’s most important commodity by far, this surge in the oil price is bearish for the majority of stock markets. Consequently I would assume that rallies seen since March have either been capped or are unlikely to make much upward progress until investors see evidence that crude oil has commenced a medium-term correction.”

The FOMC released the minutes from its April 30 meeting on Wednesday. Members acknowledged uncertainty about what constituted

…