Time to Bring Out the Howitzers
By John Mauldin
December 3, 2011
1322938081
It is now common to use the term
bazooka when referring the actions of
governments and central banks as they try to avert a credit crisis. And this
week we saw a coordinated effort by central banks to use their bazookas to head
off another 2008-style credit disaster. The market reacted as if the crisis is
now over and we can get on to the next bull run. Yet, we will see that it
wasn't enough. Something more along the lines of a howitzer is needed (keeping
with our WW2-era military arsenal theme). And of course I need to briefly comment
on today's employment numbers. There is enough to keep us occupied for more
than a few pages, so let's jump right in. (Note: this letter may print long, as
there are a lot of charts.)
The
headline number is that 120,000 new jobs were created in November, in line with
estimates. That total is the sum of 140,000 jobs from the private sector
coupled with the now usual loss of 20,000 jobs in the government sector. But
when we look at the details, things are not as upbeat.
First,
the good news: the US economy is continuing to grow. As I have said for quite
some time, the US should not fall into a recession unless it is...
Comments
Russ Abbott
Dec. 3, 2011, 10:46 p.m.
John, you wrote, “The US economy is looking more and more European all the time in terms of unemployment numbers.” We should be so lucky. The Swedish unemployment rate is 6.9% (http://bit.ly/thoLia).
Lon Purvis
Dec. 3, 2011, 11:30 a.m.
It is all just math and the math has caught up with the world. The moral decay has caused a huge shortage of wisdom which has caused leaders to not look to the source of all wisdom. One word from God and this would be fixed. Our country doesn’t not have to fall with Europe if we seek “His” wisdom. What if we found a source of very cheap energy that employed many in it’s production. All our exports become cheaper and un-employment is gone. One “Word” from God would do it but we choose to depend on men and laugh at those who seek God and His ways. Life is just math and relationships and as a country we have abandoned the relationship that would make the math work.