The state-by-state negative equity percentage is an eye-opener: Nevada, 68%; Florida, 46%; Michigan, 38%; California, 33%. Details are in the following document: CoreLogic Report.

These underwater mortgages are on top of the foreclosures.  It will be years before this market recovers.

There are two quotes in particular that stand out.

First, “Berwick said society makes decisions about rationing all the time, and that the ‘decision is not whether or not we will ration care — the decision is whether we will ration with our eyes open. And right now, we are doing it blindly.’” 

Whatever happened to the “invisible hand” behind free enterprise?  The same criticism given above can be leveled at ANY economic activity. “Ration with our eyes open” means government doing the rationing rather than the market. Why would we expect the government to be more efficient?  What about personal choice?

Second,  “He [the appointee] has also praised the UK’s National Institute for Health and Clinical Excellence (NICE), which he said had ‘developed very good and very disciplined, scientifically grounded, policy-connected models for the evaluation of medical treatments from which we ought to learn.’ “

How many horror stories do we have to show about the UK health care system to disprove this statement?  I’m going to start a collection and put it on the web.

This is only the beginning.

The key point in  Paul Krugman’s Depression Economics is “government spending is a huge tax on true economic productivity.”

Why The Greater Depression Still Lies Ahead discusses the impact of debt on the Great Depression and the similarities our current economic situation.

Stocks’ bear market risk accelerates is not optimistic about the second half of the year.

The New Wildcard of Political Uncertainty has this interesting observation:  “Incidentally, to bring today’s jobless rate down from 9.9 percent to 5 percent over the next five years, the U.S. economy would need to produce 250,000 net new jobs per month every month for five years straight. How tough would that be? The average net new job creation since 1990 has been 90,000 a month.”

A Dash of Insight: June Employment Report Preview has some interesting comments on predicting unemployment numbers.

ADP Jobs Report Supports Double-Dip Case is another article supporting a double-dip recession.

Don’t forget Europe. What is going on over there can affect us:  The Consequences of European Austerity

Here is another story on the effects of austerity: Ireland in Decline, Or, What Austerity Looks Like.

June 17, 2010 article on every other year patterns: Equities — an ‘even years’ curse?

June 7, 2010 article on almost perfect negative correlation between $USD and $SPX:  A Flawless Market Timing Correlation

“Sell in May, then go away – come back on St. Leger’s Day” is a common rule of thumb: Backtesting the ‘Sell In May’ Rule

Read the comments from “Conan the Barbarian” in this article from March 26, 2009: ‘Painting the Tape’.  This refers to the Final Hour of Trading and is a better explanation of final hour trading than that offered by the author.

Another interesting article from May 27, 2009: Is Program Trading - Especially SLP - Affecting Trade in the Stock Market?  Program trading affects the market in a variety of ways. This isn’t necessarily bad.  It is just another thing to keep in mind.

EU chief warns ‘democracy could disappear’ in Greece, Spain and Portugal. Politics and banking is always a bad mix.  Here’s the way I see this shaping up.

Greece will have to leave the Euro zone. It cooked the books to get in the Euro Zone. It has NEVER met the requirements to be in the Euro zone.

There is a 50/50 chance Spain will have to leave the Euro Zone. It is fighting a three-front war. First, it is barely holding together as a country. It is more like a confederation of states. The central government is getting weaker. Second, the housing bubble and subsequent housing crisis is going to take years to resolve. Third, its economy has run out of steam. The austerity measures may be too much too handle.

Portugal will stay in the Euro Zone for four reasons. First, its economy never took off as had Spain’s.  So, it doesn’t have to face as large a bubble as Spain. Second, its debt isn’t as bad as the debt in Spain and Greece. Third, the people will accept austerity measures because they have first-hand knowledge of the alternative. After the Carnation Revolution, the communists briefly ran the country into the ground. Staying with the EU and staying with the Euro ties Portugal to the democracies of the West. If it means austerity to stay in, they will take austerity rather than succumb to the left.  Fourth, Jose Manuel Barroso, EU Commission President, is from Portugal and will do everything possible to keep Portugal in the Euro Zone.

In the meantime, I see the euro getting weaker against the dollar. Start planning a European vacation!