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Job creation fails to improve. Wall Street reaction: Meh

Written By | Jan 24, 2013

WASHINGTON, January 04, 2013 – The media propaganda machine is touting this morning’s essentially flat government employment data as something wondrous, even though unemployment remains in stasis at the official Federal Bureau of Labor Statistics (BLS) rate of 7.8%.

So-called job creation remains anemic and well below the 300-350,000+ number we used to hear during the final year of the Bush administration as the number of monthly job creations necessary to drop the real unemployment rate with any significance. Now, ten or twelve jobs will generate phony ecstasy throughout the largely discredited financial media.

Reporting a flat unemployment number as an achievement is, of course, a joke, made worse by the fact that the bulk of employment “improvements” in our faux recovery magically materialize as unemployed individuals lose their unemployment benefits and fall, pretty much forever, into a statistical black hole that masks the real, continuing unemployment/underemployment rate that remains stubbornly at 15-18%.

Reporting horrendous numbers like these could, of course, result in an electoral earthquake, jeopardizing the permanent positions of career politicians in DC, so the truth just won’t do. Why this charade continues—in spite of the considerable number of people who are actually aware of it—is, on the surface, one of the enduring mysteries of this already strange century. Unemployment of this magnitude permanently unseated the Republican Party in 1932—it still remains unable to govern even when it wins these days.




But, given that it’s the Dems who’ve been in charge of this latest economic debacle since roughly 2006, you’d think it was time for these clowns to be unhorsed for the rest of this century. But think again. So deeply entrenched is the current, Democrat-centric, crony-capitalist elite class that cleaning up our current mess like rational adults seems permanently off the table.

Consequently, the markets no longer reflect rational business decisions but bob and weave with daily rumors and announcements from Washington instead, making rational investing a treacherous affair. Add the HFT video-gamers to the mix and it’s scarcely a wonder why the little guy is less and less involved in the market these days. He sees today’s markets as yet another way the elites will fleece him for what little he has left. And so, rationally, he’s stuffed what he has left in gold, in Treasurys, or better yet, in his mattress. It’s come to that.

In any event, given news cycles, the phony news has markets up slightly as of about 10:15 a.m. EST. We wouldn’t be surprised to see things end up flat to down by 4 p.m., however. Until the press starts blaming the Republicans for the next fiscal cliff-style fiasco—the debt ceiling charade that will start to seriously hit the fan likely in mid-February-early March—the market will bounce up and down with a positive QE bias until we replicate the nonsense we’ve just witnessed over the Democrats’ latest tax-and-spend victory over the House Gang That Couldn’t Shoot Straight.

Obama, Reid, et. al. continue their headlong pursuit of One Party Rule in DC, but they’re actually overplaying their hand at this point. They’ve already accomplished their objective. The Stupid Party is more into attacking one another now rather than the Democrats who happily toss stink bombs into the Republican caucus and then sit back and laugh at the results. It’s a sad spectacle, but that’s what happens when your party doesn’t even believe it itself. And that’s the Republican Party today. Maybe that’s what VP Joe Biden was really laughing at during his absurd debate appearance with Paul Ryan during last fall’s election campaign.

Meanwhile, back on the actual or metaphorical trading floors, things will likely wallow around inconclusively today. Technically, that’s probably all to the good as it may take some time for markets to work off the overbought conditions we witnessed at the close on January 2.

REITs and to a lesser extent MLPs and utilities seem to be regaining lost ground, and financials seem poised to resume the forward motion that stalled in late December. That’s good for us little guys, as, at least for now, these investments remain relatively stable and generate incredibly high yields. Some preferred stocks remain attractive as well. We’ll talk about some of them in an upcoming column.

Aside from that, this market remains treacherous—seemingly positive, but ready to tank at a moment’s notice, courtesy of the HFTs waiting in the wings for another big trading opportunity. So let’s clean up our portfolios a little bit here and a little bit there while avoiding rash acts we might later bitterly regret.

Stay thirsty, my friends.

 

 




Terry Ponick

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17