Oil, Unemployment Double Whammy Rocks Wall St.

Before Friday's session even began, there was dire news from the Dept. of Labor. With the release of the Non-Farms Payroll data for May - which showed a loss of 49,000 jobs and an increase in the unemployment rate to a ghastly 5.5% - stock futures tanked and when the market opened, the Dow was immediately down 150 points.

As the day wore on, further declines in the value of the US dollar and a monstrous spike in the price of oil - up $10.75, to a record of $138.54 - drove stocks into a deep nosedive.

Dow 12,209.81 -394.64; NASDAQ 2,474.56 -75.38; S&P 500 1,360.68 -43.37; NYSE Composite 9,152.51 -255.98

After yesterday's rally out of thin air, today was a fitting response for those who have not been heeding the warning signs everywhere. $4.00 a gallon gas, layoffs piling up, 1 in 10 homeowners either in default or behind on mortgage payments, home prices still heading lower, food banks running low due to increased demand.

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If there's any question that the US economy is in a world of hurt - recession or no recession - today's unemployment figures and the spike in oil should answer any doubters.

And to Richard Russell of the Dow Theory Letters, who changed his outlook and his opinion in April from Bear Market to correction, you have lost all credibility. Get into line with the liars from the Bush administration, 90% of congress and the jackal of them all, Treasury Secretary Henry Paulson, who keeps insisting that the worst is behind us and the economy will create 1 million new jobs by Christmas.

Mr. Paulson, besides being an ignorant, overpaid buffoon, may be on to something. If things continue on their current paths, there may be more jobs by Christmas - DIGGING OUR OWN GRAVES.

On the day, decliners absolutely squashed advancing issues, 5076-1164, nearly a 5-1 margin, one of the worst thrashings we've seen in a long time. New lows surpassed new highs, 307-211, though the number of new highs is likely incorrect, as are many numbers on the Yahoo Finance web site. One wonders why Microsoft would even entertain any notion of buying up Yahoo in the first place. What they offer is largely second-rate and easily duplicated. Second, they've overstayed their welcome on the internet. Other companies do everything they do, and usually better.

Gold gained $23.50, to $899.00. Silver added 26 cents, to $17.43. It bears repeating that a barrel of crude rose $10.75, on top of $5.00 yesterday, to a record close of $138.54. If America isn't ready for $4.00 a gallon gas, how will they like it at $5.00?

I must point out that I scarcely believe the unemployment figures, since last month's were such a disgraceful exercise in fudging numbers. While the number of jobs lost is likely close (and last month was revised downward to -28,000, from 20,000), it is probably short of reality.

US jobs are going away faster than civil manners at a keg party. The snowball effect is beginning to kick in, wherein so many jobs are lost that there simply isn't enough consumerism to go around, and the spiral worsens.

There's also a hint of the Obama effect. Now that he's secured the nomination and Republicans know John McCain has about as much chance of beating him as a candle in the wind does of staying lit, the truth is beginning to seep out from all corners. Yesterday, it was the Senate Intelligence Committee reiterating - in the nicest possible terms - that the Bush administration selectively employed intelligence to sell the Iraq threat, and the war, to the American public. Today, it was the Labor Department coming clean somewhat. More truths about the state of the American experience will be forthcoming as the unnecessary election campaign season drags on. Barack Obama will not only become the first black man to be president of the United States, he will win by an absolute landslide margin.

So, if you think today's action on the markets was bad, be prepared for much, much worse. The Bush administration and a supine congress has created the perfect mess. It will take determination and unity of purpose to heal the nation.

God save us all.

NYSE Volume 1,377,134,000
NASDAQ Volume 2,197,451,000