The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

One Knee Just Buckled

06/01/2012

The all-important monthly Jobs Report was released this morning, and it was terrible.  While economists were expecting 155 thousand jobs were created in May, we learned it was only 69 thousand instead.  The unemployment rate rose from 8.1% to 8.2%.

Dow futures indicate the market will drop about 200 points at the open.  Interest rates on Treasury bonds are sinking to historic lows as investors look for a “safe harbor.”  I expect to see QE3 soon.

All Spring, the U.S. economic data has been getting stronger.  Then, worries about Europe began to weigh on our stock market, if not our economy.  Now, we know the economy is being weighted down as well.

For the third straight year, the market and the economy are both taking a dive during the summer.  Hopefully, it will be the third straight year that both recover at year-end, and I’m confident they will.

Winston Churchill once complained that America can always be counted on to do the right thing, but only after exhausting all other possibilities.  I think that is true of all democracies, which includes Europe, who is taking forever to exhaust all other possibilities.

In the meantime, America needs a knee-brace to support the weight of Europe . . . or a decisive election in November!

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