Friday’s lousy employment numbers has everyone freaked — with reason. the U.S. has not bounced out of any recession without housing and returning jobs. This chart is horrible:
It’s made horrible for three reasons:
1. Companies have learned to do more with fewer employers. Computers, networks and software have made remarkable progress in the past five years.
2. Big U.S. companies are focusing on where the sales are — overseas, in fast-growing countries like Brazil and China.
3. Housing provides the only jobs in communities where jobs have gone overseas. I have a country house 127 miles north of New York City in Columbia County, NY. New Yorkers scurry up there on weekends. They used to build houses and employ the locals, who had lost their factory jobs to China, Mexico and southern states, Now the locals scurry around in search of odd jobs and lottery tickets. I don’t make this up. I watch, with awe, the sales of lottery tickets at my local gas station.
Here’s the housing chart. Look at the recent dip.
This double dip hurts in three ways:
1. For more Americans their “savings” is their house. Now we know housing prices don’t keep going up and up. That hurts confidence, spending and investing in the stockmarket.
2. It lifts foreclosures and hurts the value of the banks’ portfolios.
3. It depresses the sales of companies who sell to the new home business and to a lesser degree, companies like Home Depot and Lowe’s.
All the above is now getting much attention in the media. Combine that attention with the approaching summer and you have all the ingredients for a lousy next few months in the stockmarket. I remain optimistic. We will get through this. I do see a QE3. But there is no reason to expose yourself to excessive hurt. It does make sense to go increasingly to cash — especially in those stocks showing a recent sharp downturn. Check your charts.
Two videos worth watching:
+ Insane downhill bicycle race in Chile. Click here.
+A day made of glass by Corning. Click here.
My daughter said the driver is me. It’s time for me to hang up the keys, she says.
Nice children.
Harry Newton who ran out of time on his “big” piece on dividend paying stocks he likes — NLY, AGNC, ANH and MFA. Tomorrow, promise.
> We will get through this.
> QE3
What's the definition of insanity again?
This one is too big to do a three-peat. there's not much road left to continue kicking the can down
http://www.cnsnews.com/news/ar…
Here's an even more stunning graph showing the average duration of unemployment:
http://www.businessinsider.com…
Yes, you are right. This is even more stunning.
Here's the url to tom's chart: http://www.businessinsider.com…