The Economy is bad, very bad. GDP was just reported at close to a -4% for the last quarter of 2008. Unemployment is above 7% and could hit the, previously unimaginable, double digits in 2009. We are hearing of massive layoffs everyday and 5 million Americans are on the roles of government unemployment, the highest in almost 30 years. Just last week, there were more than a half million first time unemployment claims.
Corporate Earnings have been dismal as in January more than 65% of the S&P 500 corporations reported. While Banking and Finance were the worst reporting massive losses for Q4-2008, earnings have plummeted or even disappeared across a broad sector of the economy.