Unemployment up to 9.2 percent. Ugly economic news.

A part of me wonders if corporations, which are flush with profits and are producing, are gaming the system. Are they holding back on hiring they can (if not should) be doing in the hopes of booting Obama from office next November and getting a Republican President and Senate that will give said corporations a friendlier tax and regulatory environment?

Or am I being too cynical?

 

I don't think so. Corporations are holding back because there is not much demand for their products or services. There is no immediate answer to the problem of millions of people losing huge sums of money in, as they always say, the biggest investment of your life, a home.

 

This whole "unexpected" bad news for the economy has been a recurring theme/pet peeve on the Rush Limbaugh Show.

Here he is from a year and a half ago:

http://www.rushlimbaugh.com/home/daily/site_021810/content/01125106.guest.html

You have to wonder if the people expecting good news see actual evidence to support their predictions or if they're just seeing what they want to see. Or if they're just cheerleading for the economy.

And, because it's always easier to be wrong when you're part of a group than when you go out on a limb, there appears to be a lack of contrary opinions out there.

 

Rush would love it to be 1933 . . . in a land, far away.

God help us , if that happens.

 

People hate the phrase, "do more with less," but that's what's happened.

Companies make hiring decisions on long term predictions. A couple of jobs reports isn't going to change anything. Meanwhile, uncertainty over interest rates and tax policy can be paralyzing. You can't make long term decisions when you can't predict long term conditions.

In the mean time, companies have made decisions to deal with the current environment. They're focusing on core businesses. They've cut or outsourced jobs. They've put off expansion. They're not updating facilities or making capital investments.

And, they won't until they're convinced the economy is on sound footing.

Hiring is a lagging indicator, not a leading indicator. Easier to have people work overtime than to hire new employees if you get busy, but aren't sure you'll stay busy.

 

Nah, come on.

But, I do think that a lot of us on the right thought Democrats -- aided by the press -- talked down the economy under Bush 43 and focused on bad news.

And, when you only focus on bad news, you risk it becoming a self fulfilling prophesy.

Dems are currently accusing the right of the same thing.

But, the press appears to be doing the opposite -- and the numbers are always "unexpected" when they don't follow suit.

Wall Street will always cheerlead for the economy. (On a whole. Certain players will always be short the market.)

CNBC took a lot of heat for eating up whatever Wall St. fed it for years.

If people are still surprised every time bad news comes out, maybe they need to do their own homework.

 

Well, in the case of news moving markets, you always need to be careful. How much of that news is already built into the market/price.

The old rule, "is buy the rumor, sell the fact." Even good news, if it doesn't exceed expectations an be bad news.

When I was starting out on Wall St., this was a tough lesson to learn.

Back then, under very different conditions, good news could be bad news in other ways too. Too much good news could be inflationary, so it was actually bad news.

 

If the government is playing the "expectations" game, it would be in its best interest to sandbag the predictions to make the actual numbers look better in comparison.

They didn't do that, which leads me to believe that the projections were made in good faith and that the anemic numbers were truly a surprise.