Huge New Job Losses Send Stocks Soaring!
It's another new new unemployment record, America! The happy month of March saw 669,000 U.S. jobs vanish, bringing thejobless rate up to 8.5% -- the highest since the end of Reagan's Lil' Depression at the end of 1982. About 5 million jobs have now been lost in this current Great Recession. And stocks are on fire -- the Dow's over 8,000 again!
This always seems weird, with these Economic Downturns, how at some point absolutely nobody can ever predict with any certainty, the markets turn around. How can stocks rally when these awful unemployment numbers keep coming out, month after month?
Because! Also, there are Other Indicators, which are looking a little bit hopeful. Here are the big ones, today:
- The G20 meeting actually accomplished a trillion-dollar stimulus bill, hooray! And it looks like they've agreed to avoid the worst sort of protectionism that made the Great Depression so "great." [MSNBC]
- American mortgage rates hit an all-time low, 4.78% for a 30-year-fixed, which means you can probably buy a pretty decent foreclosure today and the payment will almost certainly be (and will stay) less than your rent. [Reuters]
- And that small uptick in pending home sales seems to be supporting this "now people will buy" theory, especially with the FHA now guaranteeing a third of all mortgages, which you can get into for as little as 3.5% down. (Yes, this may also cause a whole new wave of foreclosures, unless the FHA starts cracking down on fraud-o-lenders and/or real-estate prices stabilize.) [Forbes]
- China's manufacturing is rising, for the first time in six months. Somebody's starting to buy some more shit somewhere! [Bloomberg]
- The main cause of the financials rally is this new rule from the Financial Accounting Standards Board, which takes effect as of yesterday (the beginning of the second quarter) and will change the way banks are forced to value the shitty mortgages they're holding -- the "mark to market" thing. Never mind, it just means banks will officially have smaller losses on this trash, which may have the weird effect of making the things worth more, in a recovering market. WTF, right? [MarketWatch/New York Times]
- Unemployment is what's called a "lagging indicator." A recession is well on its way before companies start laying off workers, and a recession is usually over for six months before companies start hiring people back. Sucks, but it's true. [Bloomberg]
- Facebook is about to do an IPO. Jesus, when's the last time you remember hearing about a tech company with no revenue or business model doing a public offering? Web 3.0, bitches! [Breaking Views]