India and China: The NEW 'New World'?
Optimism in India and China faces off against a weak economy in the West. Has the economic torch been passed?
Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning (dailyreckoning.com).
Subscribe Today to the Monitor
As we were leaving, President Sarkozy was arriving.
It is a Grand Hotel. They come. They go. Nothing ever changes.
One of the problems with traveling so much is that you spend much of your time in a jet-lag fog. It was hazy when we left Mumbai. It is hazy in Kuala Lumpur. Was it the weather…or us?
But when we read the news, our eyes opened wide. Friday’s jobless numbers were shocking.
The latest figures show unemployment increasing, not going down. Here’s the New York Times write-up:
The United States added a total of just 39,000 jobs last month, down from an upwardly revised gain of 172,000 in October, the Labor Department reported on Friday. With local governments shedding jobs, the additions in the private sector were too small to reduce the ranks of the unemployed or even to keep pace with people entering the work force.
The unemployment rate, which is based on a separate survey of households, rose to 9.8 percent in November. It was the highest jobless rate since April and up from 9.6 percent in October.
The outlook remains bleak. More than 15 million people are out of work, among them 6.3 million who have been jobless for six months or longer. Many are about to exhaust their unemployment benefits, which have been extended repeatedly by the government because of the severity of the downturn.
The latest snapshot of the labor market cast a pall over what had been a brightening picture of a steadying economy.
The stock markets shrugged off the report, which was well shy of the forecast for a gain of 150,000 jobs, as all the major indexes rose slightly on Friday.
Part of the surprise in the November report was that layoffs, which had subsided earlier this year, picked up again. The number of people who were unemployed because they had been laid off or had concluded a temporary assignment increased by 390,000.
We don’t want to rub it in. But “we told you so” springs to the lips like a cup of beer to a football fan.
Meanwhile, the housing market is weakening. The Case Shiller index shows prices in such hot-spots as Phoenix and Las Vegas, at the lower part of the market, down by more than 40% – and still dropping. Some of them are now below their levels of 10 years ago.
So how can you have a real recovery when…
A) Fewer people have jobs (less household income)?
B) The average household’s major asset is losing value?
But heck, this is fantasyland now. Anything can happen. The feds are bailing out the banks all over the world…and entire countries, too.