When Will the Market Accept the Reality of the Recovery?

from Minyanville:



When Will the Market Accept the Reality of the Recovery?

By Mike Mish Shedlock
Feb 25, 2010 1:30 pm

The economy needs jobs and an increase in consumer spending -- neither of which is coming.


Yesterday the market rallied the moment Federal Reserve Chairman Ben Bernanke started yapping to Congress about holding interest rates low for a considerable length of time. Pray tell, what did he say that anyone shouldn't have expected?

Perhaps today the reality of why Bernanke feels compelled to hold rates low will set in. Following news that unemployment claims spiked to 496,000, the S&P 500 gapped down 15 points. Is there more where that comes from?

With that backdrop, let's take a look at the Unemployment Weekly Claims Report for February 25, 2010.



...(snip)...

At some point however, reality will eventually set in. Without jobs, all this happy talk about the impending recovery and all of Bernanke's yapping about low rates won't satisfy the market. It's going to take both jobs and an increase in consumer spending to lift the economy. ........(more)

The complete piece is at: http://www.minyanville.com/businessmarkets/articles/unemployment-claims-spike-recovery-bernanke-reality/2/25/2010/id/27028

indicate a downturn in stock and exchange prices. Since Reagan, and more now than ever, layoffs and mergers/acquisitions always seem to go hand-in-hand with increases on Wall St. Thanks to globalization and cheaper labor, what's good for most Americans is not good for the "market" and what's good for the "market" is not good for most Americans.

There are 6 billion people who are potential customers, and they don't care where their customers come from. If our standard of living tanks and we can't afford to buy, people in other countries will pick up the slack. Just look at the price of oil. U.S. demand is way down, but thanks to surging demand in China, India, and others that have benefited from globalization, the price of oil remains high, in spite of the Great Recession. So for all of those people who loved to save a few pennies at Walmart by buying Chinese goods, and putting Americans out of work, I hope they like paying the higher prices on gasoline from here on out, as well as for other raw materials. We sure showed those union members in America, didn't we? And yet, most Americans don't get it, even now.

this is exactly what it is about and why this recovery will be so hard unless there is a power takeover or restructuring of our economics. in the national interests jobs are not being created so that our productivity per worker will go up. this keeps inflation down under this system. this some grand measurement in the world economy. Jobs create extra demand driving prices up. the problem with this of course is unemployment is worse, and because of globalization inflation and the financial meltdown even many of those working have no money left to spend throughout the economy, therefore layoffs. there is no way out without a big change on way or the other.