I Have No Memory

The market sent another clear signal that the entire planet’s economy is FAR from being even remotely in the positive. Continued economic problems sent the Dow on its second largest slide in recorded history, with the largest being only 2 weeks ago, and the third largest; last week.

The Dow tumbled 733.08 points, or 7.87%, to close at 8,577.91 on Wednesday. In addition to this being the Dow’s second largest point drop, it was the blue chip index’s biggest percentage loss since Oct 26, 1987, which followed Black Monday on Oct 19, 1987.

The Commerce Department released abysmal retail sales figures, showing a decrease of 1.2% last month, the widest decline since a fall of 1.4% in August 2005. Analysts were expecting a drop of only 0.7% for September.

My sales are down 20%.

With consumer spending accounting for two-thirds of total economic activity, the new retail figures are a strong indication that we are, for all intents and purposes, in a recession. The technical definition of a recession is two consecutive quarters of negative economic growth as measured by the gross domestic product (GDP). One more and we’re 100% in a textbook proven recession, and I guarantee it will happen.

More bad news came from the Fed with the release of the Beige Book report, which stated that the economy continued to worsen in early fall as financial and credit problems spiraled out of control. The report hit Wall Street on the heels of Ben Bernanke’s comments, indicating that the credit market rescue will not instantaneously shock the economy back into good health.