Wednesday’s rise on the market was just a flash in the pan.  The FTSE managed to close 8.5 points higher than Wednesday, but the US markets closed at lower lows.  As I mentioned before all eyes will be on the non farm payrolls data due out at 8:30 EST today (Friday).

In the US banks took another hit, with Citi Group shares selling for $1.  There is increasing nervousness about GM with auditors raising doubts about its viability.  More headlines read: “GE Treated like a Leper as inversors punish shares”, “Recession Deepening Across Regions, Industries, Fed Days”, “12% are behind on mortgage or in foreclosure”.

No wonder the markets are declining.  The real story is the 12% behind or in forclosure on their mortgages, see story

I am sure I remember reading almost 2 years ago that if forclosures reached 3% then those mortgage traunches would be in a loss situation. It would seem the sub prime and even the prime mortgages are going to cost more money yet.  What do you do if you have lost your job?  Cut back on all expenses first, no new car, no eating out, no cups of coffee from Starbucks while looking for a new job. Hold off on new clothes.  All the above is bad news for the retail sector, which in turn is bad news for manufacturing.  So the lay off more people and the cycle continues.

The UK is not out of the woods either.  The headline reads: “UK February House Prices Decline Annual 17.7%, Halifax Says”. Most of the rise on Wednesday was due to speculation about the Chinese stimulation plan requiring commodities.  It seems this hope was dashed by reports out of China.

We are left with the markets probing new lows. Perhaps after tomorrow we will look at how low can it go.