Hey… how ‘bout this rally!

Even knowing that the economy is in a recession/depression, it is the kind of headline that grabs your attention: “Recession Worse Than Prior Estimates, Revisions Show” by Bob Willis at Bloomberg.com. “The first 12 months of the US recession,” he writes, “saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.”

The U.S. unemployment rate slipped to 9.4% in July from 9.5% in June, the most encouraging sign yet that the U.S. recession is easing.

First, a historical note…US equities have just come off their best July since 1989. Overall, the market is up over 8% for the year. But if we look backward (after all, hindsight is 20/20), March 1989 also saw a huge run up. It was followed by an even stronger rally in July, during which volume dried up. It appears the same is happening now. What came next in 1989 was a big sell-off in September, followed by an even greater one in October.

The U.S. Postal Service is on track for a record $7 billion deficit this year. That’s more than double last year’s loss.

Will the unions ever learn? YRC Worldwide (NYSE:YRCW) investors are riding a nauseating roller coaster this week as management and the union debate a pension obligation. If a deal is not reached, the trucking company’s next stop may be at a bankruptcy court.

In the currency market, the dollar fell against the euro. Late Thursday, the euro was trading at $1.4036 vs. $1.3882 on Wednesday.

It’s a Hard Life to be Rich.

NEW Unemployment figures Show We’re Still Lingering in Depression.

Deflation and the price of Gold. Give yourself an extra point for spotting the trick question. It’s already tripping up plenty of would-be answers. Because gold must fall during deflation, since it rose so much during the inflation of the 1970s – right?