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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (90154)	1/5/2008 10:44:36 AM
From: Giordano Bruno	Respond to of 110194

Abelson WALL STREET, NOT SURPRISINGLY, didn't give a fig as to who won or lost in Iowa. But that failed to keep it from getting deeply depressed. And who can blame the investing masses? After duly celebrating the arrival of the new year, they woke up only to find the wolf at the door. For many months now, there had been plenty of warning that recession was lurking out there in the tall grass. But it went pretty much unheeded, when not scorned. However, even the most ebullient bull began to breathe heavily as 2008 dawned, accompanied by a swell of evidence that the economy was tanking, led by manufacturing, which was supposed be enjoying a boomlet thanks to the debased dollar and demand from abroad, and retailing, which presumably could always count, in fair weather or foul, on consumers to consume. Alas, it ain't necessarily so. Came Friday and with it the crusher in the form of an exceptionally ugly report from the Bureau of Labor Statistics on jobs -- or more precisely, the lack of them -- in December. As Philippa Dunne and Doug Henwood of the Liscio Report neatly summed it up, the payroll number was quite weak and its household counterpart even weaker. All told, supposedly 18,000 jobs were added. We might note right off the bat that there were no fewer than 66,000 mythical jobs added, courtesy of the infamous birth/death adjustment; save for that curious confection, the total would have gone considerably negative. That handy adjustment, incidentally, was responsible for 89% of all the reported payroll additions in 2007. Unemployment jumped to 5%, from 4.7%. And the big losers were widely dispersed, paced by construction, where 49,000 jobs vanished last month and manufacturing, which lost 31,000. Apart from health-care and restaurants and bars, there were virtually no conspicuous gainers. As Philippa and Doug quip: "Our new economic model: eat, drink and check into the hospital." They anticipate "some significant negative employment numbers in the coming months" and point out that "the unemployment rate is already above what the Fed had projected for the next three years." We imagine the Fed will do what it always does when it gets agitated -- cut rates. And we suspect that'll have zilch lasting effect on the economy and the stock market.