WASHINGTON, June 1, 2012 – June may be bustin’ out all over—at least if you like the irresistible music and trippy lyrics of Rodgers and Hammerstein—but the month looks to be bustin’ down on Wall Street. This morning’s job report surpassed pathetic, as the U.S. Bureau of Labor Statistics (BLS) reported that only 69,000 new jobs had been created in May, boosting the official unemployment rate up to 8.2 percent.
The Dow futures are reacting accordingly. As of 9 a.m. EDT, that number was down 185 suggesting a market downdraft in the neighborhood of negative two percent. On top of a miserable May, this might just force a change in those Carousel lyrics we just alluded to: “June is bustin’ down all over…” Seems about right. And appropriate, too. That wonderful musical is a bit of a downer. So is this market, but it lacks a suitable score.
BLS’ 69,000 count is well below the 300K+ jobs allegedly needed to drop the U.S. unemployment rate, which in itself woefully underreports actual unemployment and underemployment to begin with. The average American worker and his family budget today are routinely feeling like the dude trying to emerge from his burial under the earth that’s depicted in J. Seward Johnson’s riveting sculpture “The Awakening.”
Once set into the ground at Washington D.C.’s Haines Point, that sculpture was moved to the nearby National Harbor development in Maryland where it still attracts gawkers and admirers today.* We couldn’t help think of that riveting image when we contemplated the plight of the American worker in the current economy.
But switching metaphors again, Carousel is perhaps a more appropriate and complex metaphor for this no-account economy and the market that doesn’t love it. Just like no-account Billy who beats his wife and offs himself after a botched robbery, this economy and this market keeps whirling into and out of trouble. Mostly into. The descent never seems to end, and rallies, like the one we had for the first three months of 2012, are merely respites before the misery begins again.
The only silver lining in what looks to be a horrendous day today might be that we’ll finally get the kind of selling climax we need to turn things around. For a few days anyway. The systemic problems remain, and everybody except the Obama administration seems to know it. Which leads us to the other silver lining. If the deterioration here is exacerbated by the epic fail in Europe along with the economic botching that the Indian and Chinese governments are engaged in, we might just be able to transform the still-upon-us Great Recession into Great Depression II transforming Mr. Obama into Herbert Hoover and ushering in a painful era of economic sackcloth and ashes leading to repentance and redemption.
But we’re ahead of ourselves here, and this isn’t a bad novel. It’s life as we currently know it.
Meanwhile, we need to post this so we can get back to the market itself and redeem the relatively few positions we have left, either paring the losers, doubling down on utilities and REITs, or running to treasurys like everybody else, the heck with the essentially negative yields. What a mess.
This too shall pass but not without a lot of pain. Bottom line is that people need to get serious at the ballot box this fall, voting only for those politicians who are willing to show the courage to get things done. It’s a tall order, but the promises of largess are largely a thing of the past now. We need to elect politicians who will pay the overdue bills and loosen the tax codes so small businesses can grow again. Without having to worry about Obamacare or the flat-earth eco-freaks who want us to pay more for fossil fuels.
Speaking of fossil fuels, fears of deflation are setting in once again and oil prices, Iran notwithstanding, are plummeting this morning along with the market.
Yep, it’s a Carousel of chaos this morning. The musical’s character-challenged hero, Billy Bigelow, at least gets a heavenly chance to make amends for his misdeeds. Unfortunately, Mr. Market might not be so kind to us and to the overpromising Idiotarians we return to Congress again and again. Time for the adults to take back the reins of this economy. If indeed, we have any adults left in the house.
* In 2009, an authorized copy of this sculpture was also installed in Chesterfield, Missouri.
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Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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