September 2nd, 2011
08:35 PM GMT
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I was just asked on air why in the world European markets, after two decent days, would fall heavily on the back of U.S. employment figures.

It’s simple - there had been no good reason for markets earlier this week to recover from the crazy, volatile days of August.

Nothing has changed.

The U.S. economy is not recovering. Unemployment numbers are some of the best to watch as a barometer. Only when businesses feel confident do they hire, expand, and increase production. Since it’s easy to hire and fire in America, the creations of jobs (and the reverse, of course) can happen dramatically over a period of six or so months and show the direction of the economy.

Oh, and then there are Europe's own problems - part of which could be solved if the U.S. economy started to really grow again. It is not.

You may notice analysts in the U.S. like to point to Europe’s troubles for the market mayhem. In Europe, they like to point fingers toward the American debt debacle.

Let’s blame Europe for now. Greece is back on the mind - it was confirmed today the country will not meet its deficit targets this year. Its growth is getting worse, not better.

The meetings between Greece and the EU/IMF/European Central Bank troika broke up on Friday without a common understanding of how bad things are getting in Greece – and they won’t meet again until mid-September when Greece has prepared its 2012 budget.

I keep hearing that the Greek people simply will not agree to yet another round of austerity. Will German taxpayers agree to let Greece miss its targets that were agreed in order to get the bailouts?

Greek bond spreads hit euro-era highs on Friday. The market is once again betting that Greek will have to default a la Thailand and Russia in order to start again.

Italy is already backsliding on some of its austerity promises. Talks among eurozone governments about already-approved loans to Greece and the enlarged European System of Financial Supervisors aren’t going well (Why must Europe fiddle with what has already been approved?).

And of course there is the fear of global recession. Good thing Europe isn’t raising interest rates and cutting government spending just when it needs the opposite to stimulate the economy.

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Filed under: Business


soundoff (8 Responses)
  1. GBush

    The Americans should 'rebel" against the current bunch of people in office and call for fresh election. What a bunch of idiots running this great nation until it is no longer that great. That goes for both the democrats and the republicans.

    September 3, 2011 at 9:31 am |
  2. desert voice (troubledgoodangel or Nathanael)

    Each morning we hear more bad economic news. I knew this was happening. It's a home-grown evil of many decades. People's minds have been atrophiated by the education system, which crushed creative thinking coming from the moral certainty of doing the right thing! This certainty is or is not in the brain. It is not in the American brain any more! A few people who stood up against the educational system, were purged from the system, and sent into exile, as myself. I have predicted that this was coming the very day I left the U.S. on the banks of Potomac, talking to a stranger "from the ruling establishment." I still recall his unease and scorn, even hostility when I said, ten years from now, China will be in the driving seat, not the U.S., because of the globalist blunder of exporting our job base! The year was 2,000, so I was off the mark by one year. Nonation in the world can forfeit its job base for the sake of another, no matter how rosy it make look to the investors! America must gradually bring back what she invested abroad, and reinvest in itself! In the meantime, people need to work! I propose giant infrastructure projects, which will put enough mone in people's pockets, so that the savings generated will attract the companies that emigrated, back! We need not just white elephants, but smart white elephants that generate huge profits, beside jobs! We need ideas!, someone said. I have given you some. Ihave no money for gasoline, and can barely afford food. Else, I would have spent some more time, giving you more ideas. By the way, folks, the CEO abbreviation actually means "[C]utting [E]mployment [Overhead] shark. Some corporations are still hiring such, while America cringes in fear for its future!

    September 3, 2011 at 10:38 am |
  3. miriamele

    Desert voice, you are absolutely right. I'm from another corner of the world, and I could see it coming in the very first moment big multinational companies came (were allowed to come, even lured to come) in my country. Now there are no jobs, but there is poverty and a less than well educated or happy population.

    September 5, 2011 at 2:09 pm |
  4. Carla

    Americans blame everything on Americans. That's the problem.

    September 6, 2011 at 7:19 am |
  5. Carla

    Americans, stop competing against each other. Dread China or whatever and get some national goals, sacrifice yourself to excel.

    September 6, 2011 at 7:21 am |
  6. Beefburger

    Ok, in Greece they have been retiring in their mid-50s at 80% of their former income level. Please tell me how this can possibly be financially fit?

    We sent all of our good manufacturing jobs out starting with NAFTA and moreso to China. Now our majority employer is Wal-Mart pushing us to buy all of the "Made in China" crap because now we cannot afford anything better.

    "Made in the U.S.A" used to have meaning, a higher standard of quality. Please tell me where I can buy products that are "Made in the U.S.A." now. Why am I being forced to by clothes labled "Cherokee" and "Faded Glory" with "Made in China" on the tags?

    September 8, 2011 at 7:56 am |
  7. Carl van Zijll de Jong

    “Creating Jobs” is a utopia! Every attempt we implement in the economy will create a catch 22 situation. A solution to be sure of work is to arrange an international barter agreement through which the debt of every country will be repaid. However, it would be important to establish every economy on the dictation of the “Laws of Economics” in order to create a sustainable society. For your information Google “The World Monetary Order”.

    September 8, 2011 at 11:40 am |
  8. icons download

    I can not take part now in discussion – ti is very occupied. I will be free – I will necessarily write that I think.

    hpixel

    September 24, 2012 at 2:43 pm |

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