Unemployment Up - No Surprise
With so many layoffs in th efinancial sector and homebuilding sector, I'm actually surprised the numbers were so faint: only a 4,000 increase.
http://news.yahoo.com/s/ap/20070907/ap_on_bi_go_ec_fi/economy
That means the next few weeks will show even more massive levels.
My concern, as you know, was the way the market would react. It's never predictable how the market takes bad news.
However, as long as the problem APPEARS to be isolated to a specific sector or two (homebuilders, lenders) the Fed will not be motivated to cut rates. The Fed will cut when it anticipates that the broader economy is slowing and will do so ~6 months from now.
As always, I think the Fed is either a bunch or liars or they are stupid, because 6 months from now consumer spending will be dropping. It isn't going to be a White Christmas.
http://news.yahoo.com/s/ap/20070907/ap_on_bi_go_ec_fi/economy
That means the next few weeks will show even more massive levels.
My concern, as you know, was the way the market would react. It's never predictable how the market takes bad news.
However, as long as the problem APPEARS to be isolated to a specific sector or two (homebuilders, lenders) the Fed will not be motivated to cut rates. The Fed will cut when it anticipates that the broader economy is slowing and will do so ~6 months from now.
As always, I think the Fed is either a bunch or liars or they are stupid, because 6 months from now consumer spending will be dropping. It isn't going to be a White Christmas.
posted by Andrew at
7:52 AM
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