Tomorrow will be an interesting one – it’s when the new unemployment report (for March) will be released. It’s almost predictable that the report will show either a stable, or slightly improving jobs picture. But what may not be clear is how many jobs are real (not taxpayer supported) and what portion are thanks to increased government spending.
But we do have a couple of clues to help guide us, in this regard, which are out this morning. The Balance of Trade report and the Challenger Job cuts. Cuts first:
New figures released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc. show employers announced the fewest first-quarter job cuts in 19 years, providing further evidence that the economy continues to gain strength as it enters the sixth year of recovery.
The first quarter closed with 34,399 March job cuts, the second lowest monthly total since January 2013. The only month to see fewer cuts during that period was December, when just 30,623 job cuts were announced. The March total was 18 percent lower than the 41,835 planned job cuts reported in February and 30 percent lower than a year ago when March job cuts totaled 49,255.
The other big number this morning is the Balance of Trade report. It wasn’t good. Somewhere in here, we were expecting the US deficit in trade with other nations to begin to improve because of demand or US resource products and food., No such luck. Trade gap is widening.
The U.S. Census Bureau and the U.S. Bureau of
Economic Analysis, through the Department of Commerce,
announced today that total February exports of $190.4 billion
and imports of $232.7 billion resulted in a goods and services
deficit of $42.3 billion, up from $39.3 billion in January,
revised. February exports were $2.0 billion less than January
exports of $192.5 billion. February imports were $1.0 billion
more than January imports of $231.7 billion.
The January to February decrease in exports of goods reflected decreases in industrial supplies and materials ($2.7
billion) and capital goods ($0.9 billion). Increases occurred in consumer goods ($1.2 billion); other goods ($0.6 billion); and automotive vehicles, parts, and engines ($0.1 billion). Foods, feeds, and beverages were virtually unchanged.
One month does not a trend make, however, so we will see what future months bring. For this morning it threw cold water on the markets, though.
There are still plenty of hand-wringers predicting the imminent demise of the US dollar and the immediate rise of gold and silver to levels more than double where they are now.
I don’t buy it, at least not yet, barring nuclear war or Ebola landing in New York. More likely, a continuation of pernicious deflation, with persistent low interest rates for another year, and then – maybe in mid 2015, we should see…no, wait. Enough. The rest for Peoplenomics readers this weekend.
Did I mention Bitcoins are down to $435.9 this morning?
Lean Tactics from History: I would simply remind you that the situation globally was much worse in the 1930’s and the US dollar continued to prevail, although there was the ban on private ownership of gold and silver at the time.
A real student of financial history might recall that if you’d hung onto gold in the last Depression, around $34 an ounce, wasn’t it? You’d still have $34 an ounce as late as the early 1970’s.
People have a terrible propensity to plan the wrong game.
On the other hand, if – when stocks were terribly priced, you would have “bought the Dow” for under $100 in 1931. In 1970, the Dow could have been sold for $900+
While I’m deeply sympathetic to the gold bugs (been accused of being one, too) the reality of Ures truly is that I see “seasons” to where to make money and cash is king in Depressions and coming out the back side (2016-2010?) the return on equities (if there’s still a world to invest in) will be just marvelous!
The reason is stocks will take a serious beat-down as the bond market bottoms and then stocks could do very well indeed, at least judging by past history.
No one made “real money” holding gold more than half an economic long wave (30 years, call it). Since it was 30-years after 1973 (when Nixon opened the gold window) is there any reason to be shocked at the present levels? $1,500 may be when I sell my lone gold coin.
Seasons change in weather and in financial instruments. People who don’t look back on past financial climate data make cannon fodder for the really rich.
And while it’s true that occasional market declines happen at 37-days after a market peak, who said the peak is in already?
More after this…
Another Fort Hood Shooting
To me, there is a subtle two-headed economic coin being flipped in the background of stories like this one and the reported increase in military suicides: On the one side, we have a large increase in people trying to get into the military because there are not enough well-paying civilian jobs so that people can rise a family on them.
On the other, we have a problem when soldiers get out finding them the jobs (and respect) they deserve in return for serving the country.
The REAL employment picture that causes social stress is revealed in the chart that shows the labor participation rate. If you want, you can find it here. But denial’s a fine tool, when used in small amounts, and if you don’t click it, I understand.
America’s labor participation rate is “Back to the 70’s” already and my guess is, before things even out, we will be back to the 1960’s levels, if not earlier.
It means that home prices may continue to drift downward at the grays unload the mcMansions and it means that more people will be house sharing and that’s all pretty depressing stuff if you just did four or six and are facing the task of starting civilian life looking for the mythical social conveyor belt. It’s been in the shop…point is there is an economic undertone to a lot of headlines like this…
The Corporate High Court
The reason for all of this is simple: The US Supreme Court just effectively ensured that Top Dollars will buy American elections into the foreseeable future.
Some mornings, like this one, I wonder if oddly timed shootings (like the Ft. Hood case) don’t almost magically appear to wipe public attention from focusing on headlines like “Supreme Court Strikes Down Overall Political Donation Cap.
Now, the Koch Brothers, George Soros, who whoever else has a deep pocket can operate unfettered.
The Court showed its corporatist bias when it held corporations (legal fictions) had the same rights as humans. Equality gone mad.
So, until the fever passes, I’m going to write less and garden more. A patch of land and some hard work has always been how free men have muddled through in the past. We’ll see how well it plays out this time, of course. Since the Sheriff of Nottingham has been replaced by Agenda 21 and a cocktail of environmental lunatics…oh, wait, I think I hear a cow farting.
Speaking of which, anything to claims the EPA has been conducting dangerous experiments on humans in order to stampede more regs and power? The damning inspector general’s report is over here if you have time to read it.
So You Want to Be an ExPat?
You might want to read “An expat couple’s nightmare: Cuenca residents are jailed then detained in the U.S. under a seldom used legal rule…” to put some sober in your plans to head for the foreign hills.
Leading on of our expat sources to remark:
If your government uses your taxes to illegally persecute you, and uses your taxes to defend themselves from charges of wrongdoing, you are so f*ked that your American mind will refuse to grasp it. Life, liberty and the pursuit of happiness has no meaning if the government can destroy your livelihood without consequence. Its exactly the reason British Citizens turned against King George and became terrorists.
Honest mistakes in the American Judicial Process?
There’s been a building awareness on YouTube of “papers please?” checkpoints in places like Tennessee…showing up in videos like this one.
So we wonder: Heavy-hands on expats, MRAPs for the local cops, “papers please” checkpoints in America, special treatment for corporations on all front….is there a pattern emerging here, or are you exceptionally sleepy this morning?
Maybe it isn’t just you, though. A poll out says Americans trust the IRS and NSA more than Facebook. Which means, I think, that the whole country didn’t grok the data mining story, at all.
The Russians AREN’T Coming
The remnants of the Project for a New American Century have (look surprised here) egg all over as Russia seems to be withdrawing some of its forces from the front line with Ukraine.
Buried in the corporate-owned press is the reason the Russians bulked up on their border: Wild talk about the new Ukraine mobgov sending forces toward Russia. Not the kind of thing to do.
Meantime, the rocketry department of NATO has announced they are suspending cooperation with Moscow, which tells us the lead time for the right hand to figure out what the left is doing is about two and a half weeks.