Democratic senator Chris Dodd unveiled a bill today that is 1,136 pages long and proposes several sweeping changes in the financial regulatory system. The bill would include adding a consolidated bank regulator, which would combine all federal bank overseers. Dodd believes this would stop banks from searching for a regulator with the lowest standards and keep an even playing field for the entire industry. In addition to this the Dodd bill would remove the Federal Reserve’s oversight responsibility. In the bill the words are “The Federal Reserve will focus on monetary policy without being distracted by responsibilities for bank oversight and consumer protection.” The third important addition this bill would bring is a Consumer Financial Protection Agency. The agency would write rules for mortgage and credit-card products that would be offered to consumers.

The bill is definitely going to have some strong opposition from republicans and probably even some moderate democrats in the senate. The creation of a consolidated bank regulator may be the most controversial part of this bill, while the Consumer Financial Protection Agency seems to be the most popular part of the bill because it should help keep the credit rating agencies honest.

One has to wonder if anyone will ever actually read the entire 1,136 pages of this bill? Sure seems like a whole lot of reading for one bill. I think that the debate over moving forward with financial regulation that tried to help us avoid something like the credit crisis of last year is a positive one, but all steps should be taken to not overstep boundaries or block a group like the Federal Reserve from being able to make necessary moves to help consumers. What is clear is that the current financial regulatory system isn’t working. The part that isn’t clear just yet is exactly what the solution should be.

There is a saying on Wall Street that says “sell in May and go away.” Obviously that didn’t hold true this year, and historical patterns don’t always hold true, but they are definitely things that you should be aware of and consider when making your investment decisions.

Now that we are in the month of November the stock market has entered what is generally its best three and six month periods of the year. The three month period from November through January is the single best three month period historically for the market, and the November through April time period is the season trade that many traders point to as being very successful. The single best month of the year for stocks based on past returns is the month of January. New Year and its optimism is definitely a part of the positive action in stocks during this time period. Over the past 49 years the S%P 500 has gained 1.5% on average in January.

Why is this time period so strong? Typically as we head into the holiday season investors tend to be a little more upbeat about the current state of the market and the economy. For example, the week before Thanksgiving has produced a positive week for the stock market in each of the last 15 years. Investors and traders are simply in a better mood this time of year and it truly does make a difference. The seasonal trade of November through April has shown to be a very solid one over time. Looking back at the last 20 years the Dow has averaged a seasonal gain of 6.86% from November-April and only a gain of 0.44% from May-October.

Remember, November starts the beginning of what is typically a healthy bullish period for the stock market, but historical averages don’t always stand true. Be wise with your money and your investments!

As was pointed out earlier today the 10% level of unemployment has now been breached. The unemployment level in the United States is now higher than it has been in the last 26 years. In October the economy shed another 190,000 jobs, bringing the total number of jobs lost to 7.3 million since the recession began. The construction sector lost another 62,000 jobs and manufacturing lost another 61,000 jobs last month.

The debate is now raging on Wall Street. Some economists and analysts are saying that this is your typical labor market lagging the overall economic recovery, while others are saying that this economy that is not producing any jobs is becoming a real threat to the overall recovery. The White House economic advisors are saying that this is the typical pattern and investors and consumers should not be too concerned just yet, but there is definitely increasing amount of worry surrounding the unemployment situation.The breaching of 10% is pretty important psychologically for many people who are looking for a job. Many wonder if this level will discourage them and keep them from trying to look for a job.

It is definitely true that the labor market lags the overall economy in a typical recovery, but is this getting to be a troubling sign? As of now the labor market has still improved from where it was a few months ago, but the fact that it can’t get over the hump and create any jobs is certainly worrisome. The construction sector that is supposed to be reaping the benefits of the stimulus package and all the projects associated with it continues to get hurt quite badly. More and more Americans are being forced to work part-time to try to make a living, which is definitely not a good sign. The labor market seems to be stuck in the mud right now, and I think if this happens for too many more months it could threaten the overall economic recovery. Without a jobs recovery there will be no real recovery.

It seems that choppy trading will continue for few more weeks. Yesterday, Dow went up by 203 points after positive report from Cisco. In an earnings conference call on Wednesday, Cisco CEO John Chambers said a recovery “is well underway” and added that economic improvements were “gaining momentum” world-wide. He predicted Cisco’s year-over-year revenue would grow in the current quarter after a year of declines.

Today, Labor department said that U.S. unemployment rose by more than expected in October to hit its highest level in more than 26 years and employers cut more jobs than forecast. The unemployment rate, calculated using a survey of households as opposed to companies, rose by 0.4 percentage point to 10.2%. Economists’ expectation was 9.9%. Dow is down by 61 points few minutes after the market open. Traders are going to take profits they made yesterday just to make sure they don’t hold any positions over the weekend. As always, trade wisely!

The United States government is planning to sell a record amount of treasury bonds next week and traders are preparing by seeking higher returns. Two year treasury yields have been declining while ten year treasuries have been staying flat or rising slightly of late. As this continues to happen we are seeing what is often called a steep yield curve.

The so-called yield curve is currently at 265 basis points, while the long-term average for that curve has been around 135 or 140 basis points. Basically a steep yield curve means that treasury investors are looking to find higher returns and are seeking protection from inflationary risks and in this case they are also preparing for a huge amount of supply from the government.

Is the treasury yield curve steepening good for the overall economy and the stock market? Most would say yes since that generally means that investors are looking for a nice rebound in the economy and do not wish to lock their money up in assets such as bonds, certificates of deposits, or other lower yielding investment products. It means that investors believe that they can do better than these yields, which is a positive sign.

Watch the treasury yield curve over the next week as the government brings $81 billion of notes and bonds to the market next week. The steepening may continue, and some are actual predicting that we could see some records on the level of how steep the treasury yield curve is, but that may well be largely because of the huge amount of supply coming in.

If you haven’t kept an eye on the treasury yield curve before now, you should probably start doing so. Today’s very steep yield curve is a good sign for the economy, but things can change quickly so make sure you are paying attention.

Roller coaster ride in the market continues. It may be good for the day traders, but it creates anxiety for the rest of us. If you are a short-term investor, keep your stop losses tight. Today, the market is moving higher because of positive report from Institute for Supply Management (ISM). It said that its non-manufacturing index moved to 50.6 in October from 50.9 in September. The index was expected to hit 52.0 in October. Initially, I thought the market was going to tank because the index moved down compared to previous month. However, traders like the fact that ISM’s new orders and prices indexes both showed growth from September.

A pair of employment reports also helped stocks. Automatic Data Processing and consultancy Macroeconomic Advisors reported a 203,000 drop in private-sector jobs last month, as expected by economists and smaller than September’s decline. Outplacement firm Challenger, Gray & Christmas said that layoffs announced by U.S. companies in October fell to the lowest reading since March 2008. What a relief!

The Federal Reserve’s interest-rate-setting committee will conclude its two-day meeting today by 11:30am PST. No change in rates is expected, but every active trader is going to analyze the comments from Fed. The Fed may not increase the interest rates, but if they say something negative about economy growth, the market will test the new lows. Otherwise, enjoy the higher prices in the stock market for few more days!

Before you purchase your next mutual fund make sure you take a look at the mutual fund turnover ratio. This ratio measures the annual turnover of the stocks inside a particular mutual fund. Recent numbers show the average domestic stock mutual fund turnover ratio sitting somewhere around 80-90%. This means that the average stock is being held less than 15 months by most mutual funds.

High mutual fund turnover ratios are concerning for several reasons. Number one they should concern you because they will make your fees much higher. Let’s be honest, it costs money to make trades and when a manager continues to churn stocks they won’t be the ones paying for it, you will be! Also remember, high mutual fund turnover ratios are going to be a problem come tax time. The inefficiency of churning stocks is seen not only at the individual level, but also at the mutual fund level. Also remember that if a manager is buying and selling a stock once every year or so it has to bring into question whether they really have a solid grip on what is going on. All investors should understand that predicting what will happen over the course of such a short period is very difficult to do, so why would mutual fund managers consistently take a gamble on what will happen over that period? It makes very little sense.

Not all mutual funds have high turnover ratios, and not all of the mutual funds with extremely low turnover ratios are the best funds out there, but you should definitely be wary of a fund with high annual turnover ratios. Avoid high turnover mutual funds since you will end up paying a lot more out of pocket and you likely won’t achieve great investment returns over the long run either.