gives the upbeat version-
“We’ve seen an improving economic picture,” said Ryan Larson, Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc. His firm oversees $250 billion in assets. “That’s been supported by accommodative monetary policy. Any kind of pullback in stocks should be kept in the context of a larger move higher for equities.”
Benchmark gauges rose as data showed retail sales rose 1.1 percent in February, matching the median forecast of economists surveyed by Bloomberg News. Stocks extended gains as Fed policy makers raised their assessment of the economy as the labor market gathers strength and refrained from new actions to lower borrowing costs.
If you’ve already noticed that this seems to be the financial sector pumping/pimping itself up, you’re right to be sceptical. “Buy this car, we’re thinking of adding wheels sometime”, is the general impression.
The fact is that the market was previously simultaneously downplaying the labor issue and talking up the economy when everyone knew it was down the drain and on its way out to sea. A recovery based on hot air can only go one way.
That said, the labor market is painfully getting out of its hole. Pre-2008/9, the unemployment rate was at a static 5% or so. It’s now 8.3%-ish, although Paul Solman of PBS Newshour says the real rate after factoring in other values is more like 16%
. That’s how readable the indicators are, on any given day. The participation rate (people actually looking for jobs) went up by about half a million or so, so maybe optimism is crawling back, maybe not.
There’s an interesting bit of possible spin we haven’t yet seen here. The 8% figure is only 3% above “normal” unemployment, which is generally considered to be 5%. It’s possible to say that the “only 3%” issue will go away over time. Things will be fine, and you’ll be able to vote with a happy smile and forget the insanity and misery of the last 4 years which the finance sector started.
Bloomberg, apparently unintentionally, also added this reflection on the way the financial world sees selectively. Talking about a global rally, this slight IED was included:
European Central Bank council member Jens Weidmann said policy makers are already discussing ways to withdraw some of the emergency cash they injected into the banking system to fight the sovereign debt crisis.
So the big move is from a private sector financial crisis to a public sector financial crisis? Having a short attention span is pretty handy if you’re supposed to be cranking up the ‘ol organ for another wheezy grind.
Some good news, but at a slow drip
The rise in market values is good news for 401ks, superannuation and other investments which build Main Street’s capital. That money does go back into the economy, so the index move will eventually add a bit of actual grunt to the positively feeble small business and mainstream economy.
The jobs are being generated by a complex realignment of different work styles, new economy jobs, self-starting, self-employment and other unavoidable options which seem to be as much desperation driven as anything else. New business starts tend to spend and generate economic activity, too, so the batteries are working and recharging themselves, even if the mains are very erratic.
The really good news is that this isn’t a boom, so there’s no instant bust coming, at least not from this direction. It’s a believable, agonizingly slow crawl out of the grave from an economy hit by a truck.
Election year spin
More immediately, this is an election year, and it’s likely to be a messy, ultra-spun election, with the super PACs putting out high volumes of mythology and misinformation.
Expect to hear the following, simultaneously-
We fixed the economy
They wrecked the economy
We can fix the economy
They can’t fix the economy
Jobs are about morality, not money
Money is about morality, not jobs
Morality is about jobs, not money
This is a class war
This is not a class war
Poverty is optional
Poverty is not an option
Avoid poverty by voting for us
Expect poverty if you vote for them
(Sorry, political copy guys, I know you do a lot to help aspiring maniacs run America. I just thought I’d do a spoiler in case somebody accidentally woke up and accidentally experienced your zero-IQ content by looking down a sewer. Have you considered actually doing something worth watching, for a change? Like mass suicide?)
Believe nothing until you see some actual improvements, real jobs, and a sudden burst in egomaniac business guys talking about how they made it on their own with only the entire country to back them up by buying their products.