Risk Rap

Rapping About a World at Risk

Job Loss Up / Economy Down

The erosion of jobs continues as the economic malaise seemingly deepens in the United States.

Today the Labor Department issued its employment report for August and it points to a weakening economy and an unemployment rate at a 5 year high.

We cannot detect any sector recovery drivers in the US economy. Global drivers are also slowing down as demand from the worlds largest market continues to abate.

One silver lining of the global economic downturn is the slowing of inflationary pressures. This might provide the impetus for the Treasury to send out another round of tax rebate checks. Don’t count on it though.

Hedge funds are deleveraging market positions and raising cash. This may impact market liquidity and contribute to extended market softness.

Yesterday on CNBC Bill Gross, CEO of PIMCO indicated that banks need additional $400 B infusion by the Fed to maintain sufficient capital levels to assure credit availability and market liquidity. Hedge funds and SWF’s are waiting for this demonstrated commitment by the Fed before they can feel confident about a strengthening economy and a more favorable investment environment.

The Hamilton Plan outlines a program to reignite economic growth for a moribund economy.

Music: Stevie Ray Vaughan and Jeff Beck: I’m Goin Down

Risk: recession, banking, unemployment, credit crisis, banking

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September 5, 2008 - Posted by | blues, Hamilton Plan, recession, unemployment | , , , , , , , ,

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