. . . to yesterday's post about the unemployment numbers is this prediction from London-based GFC Economics, a self-described "independent economic consultancy," that in a few months the U.S. will be losing one million jobs a month. No prediction about how long this disastrous situation will last. A common phenomenon: not a soul knows what is going to happen and when anything like normalcy will return. My own suspicion is that however we define normalcy, that ain't gonna be it. But that's another post.
An unexpected side benefit of the story, though, was that I got some kind of explanation for the mystery of why the market went up in the face of such terrible news. To wit:
"November's jobs figures were so much worse than analysts had expected that the Dow Jones share index actually rallied by 259 points, more than 3 per cent, as investors bet that Washington would have to launch a major new rescue package for the economy even before President-elect Barack Obama takes over the White House in January."
So let me be sure I've got this right: stock market traders are saying, "Great! The financial disaster is so bad that this is good. Because it will force Uncle Sam to do something major major major even before Obama replaces the vile little pretender in the White House (<-- well, the traders wouldn't call him that; that's what I call him and have called him ever since he took office) in January." Well, it remains to be seen what this miserable lame-duck congress is going to do between now and January 20. (Apparently, they are going to fashion some sort of rescue package for the automakers.) Obama is committed to a large stimulus package ASAP after he's inaugurated--real large: in the neighborhood of $1.2 trillion, as it stands right now. Hell, it could be $2 trillion or more by January 20, which--I don't know about you, but it seems to me--is a long, long way from now.
You know, I'm just your average dude when it comes to understanding the economy. But nobody has yet told me to my satisfaction just where in the hell all this money the government is gushing out here, there, and everywhere is coming from, and, even better, what happens when it's time to pay it back?