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| 2012-02-06 08:27 |
MELANCHOLY CHEERS
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Rethinking Friday's jobs numbers, I'm very concerned about the amount of people that dropped out of the work force, which coincides with
the dip in consumer confidence and increase in consumer savings rates. The headline number got more juice from media cheerleaders; for the stock
market that's fine, but realistically had a few more million people dropped out, the jobs market and the unemployment rate would have been zero. The
folks at NBC and MSNBC will cheer, but Main Street will surely weep. I continue to think the nation has entered into a melancholy phase, and that
makes it vulnerable.
What is the deal with so many people simply not in the mix, looking to find a job or even desiring work? This period is
most comparable to the Reagan period when the nation was completely in the dumps. Back then the unemployment rate was higher, interest rates through
the roof, and even the sitting president admitted the nation was in a malaise. What did Reagan do so differently than Obama that he saw a string of
GDP reports that reached beyond 9% quarterly and right now we can't manage to crack 3%? What can be done right now to get people to simply believe?
Despite the media and all the pom-poms, there is a grassroots depression that must be corrected in order to have something to truly cheer.
The
labor participation rate was crashing and sitting at 63.9% on Reagan's inauguration day and at the end of two terms it was 66.5%. When President Obama
was sworn in the rate was 65.7% now it's 63.7% yet this works in his favor with the general media and maybe even voters.
Talk about celebrating mediocrity, I believe the real problem is that as we lower
our level of greatness, dumb down school curriculums, and think we can be number one with 1.7% annual growth, it sets us up for real failure down the
road.
Not in Touch
It looks like Greece will accept austerity at about 1.5% of GDP although this saga is never over until it's
over, and even then it's dragged longer. Be that as it may this could be the day or week we get some (short term) resolution to the current debt
hurdle, but this is a lot of good money that will be needed over and over again. The thing is Greece isn't ready intellectually to be a real player in
the global economy. You can debate whether work ethic can improve or austerity can be accepted to make its future better, but for Greece and other
European nations that have squandered former greatness, the biggest hurdle is whether they are smart enough.
The world of the future goes to
the thinkers, especially in science and math, and the PIGS aren't ready. In the developed world there are 34 nations (OECD) and only two; Czech
Republic and Turkey, rank lower in education standards among 15 year old students. Spain ranks 33 in the world in reading, Greece 32, Italy 29, and
Portugal 27 (United States 17). In math and science the rankings are even lower (the US is freefalling in both as well). I guess there must be
something said for being able to chill out on the beach and spend money you haven't earned because you don't even waste time on the Internet. In a
connected world, Greece, Portugal, Italy, and Spain seem woefully detached.
The fact is these bailouts are going to go on for years, maybe
decades, until these nations get into the game. The crazy thing is if Americans keep throwing up melancholy cheer and continue lulled into celebrating
ordinary, even subpar developments, then we aren't far behind the PIGS.
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Disclaimer: Securities Operations Forum is providing this research to assist investors in determining when to buy and when to sell. All investment decisions are yours and as a result you could make or lose money. Securities Operations Forum, its employees and/or its affiliates and family members may from time to time take positions in the open market or otherwise with respect to the securities discussed, but not have stock ownership equal to or greater than 1% of the outstanding stock of the covered company nor does any employee of Securities Operations Forum sit on the Board of Directors of any covered company. The statements made herein include information obtained from sources believed to be reliable, but no independent verification has been made and we do not guarantee its accuracy or completeness. The statements made herein contain general information and do not constitute an offer to buy or sell any security. |
