Is the glass half full or half empty?

Another estimated 473,000 jobs were lost in June, according to ADP data. Yet, I look at some of the other headlines, such as "Manufacturing in U.S. Shrinks at Slower Pace in Sign Recession is Ending" and I have to wonder if the economy is really all that bad. Well, the economy IS that bad. ADP data indicates a loss of 250,000 manufacturing and construction jobs. Service providers cut many workers as well.

The stock market is up, however, which is no longer surprising since all the bailout money is improving balance sheets and analysts are continuing to bury their heads in the sand. Looking at the S&P advances we see that many of the specified companies earnings increases were due to Chinese and Russian purchases, but the American market is still weak. Also, China is having some serious economic issues as well and they will only get much worse. Some fast food businesses were showing increased profits, but I do not see that as a positive sign since many higher end restaurants are closing. Basically, there is much false optimism occurring.

I'm continuing to beat a dead horse on my real estate predictions and I still conclude the housing market will not bottom out until 2011 or 2012 when the surplus inventory MAY be depleted, but with upwards of a half million Americans a month losing their jobs, I do not see the housing market rebounding and we have yet to see the really significant commercial real estate market declines.

Frankly, any market optimism is just smoke and mirrors. Twenty percent of Detroit is out of work and that market has reached critical mass, with an exponential increase in job losses. Overall unemployment is at 9.6%, which we all know is a low number based on how the Labor Department calculates unemployment. Actual unemployment is pushing 15% and a two or three point increase in unemployment will put the rest of the country in a critical mass situation in which further catastrophic job losses are unavoidable. Many states are out of money.

The outlook is grim. Buy some beans and ammo.