"Sobering" Indeed.

Obama referred to today's jobs data, a loss of 263,000 jobs (roughly 100,000 more than economists expected) as sobering. Well, I agree, but to say it was unexpected is to buy into those that thinks we are in recovery phase. To me we are in the lull before the storm. By the way, of over 80 economists surveyed, none, not one, predicted the number to be as high as 263,000. That reality is sobering.

http://www.google.com/hostednews/afp/article/ALeqM5jNat8FSYDU-6wVcrkdfTsuIylT4g

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTo1p6Los8CI

But if you really want something sobering, I suggest the following link. As the author points out, if you are expecting consumers to start spending more money for an economic rebound then you are sadly mistaken. They are already spending at very high (record) levels in terms of a percentage of personal income and as a percentage of GDP. And even that is not really lifting us out of this recession absent government support. Even though consumers are pretty much spending as much as they can, the economy is still struggling. So I don't expect things to improve from here.

http://www.financialsense.com/Market/panzner/2009/1001.html

And as this piece points out, we are in for a world of hurt due to the size of the private debt that has built up. We may do well in the short to medium term while government spending/stimulus props us up, but that will in time end and then we are all in for a world of hurt.

http://www.nakedcapitalism.com/2009/10/the-recession-is-over-but-the-depression-has-just-begun.html

Now I hate repeating myself so much, but let's consider the math and see where it leads us:

• the unemployment rate is nearing a two decade high;
• those with jobs are working the these least number of hours per week ever (roughly 33);
• adjusted for inflation, hourly wages are at their lowest in three decades;
• overall debt, government and private, is at record levels;
• foreclosures are mounting on both a residential and commercial level;
• there are an estimated 13 months worth of shadow inventory of houses, i.e. those that will be for sale but are being held off the market for one reason or another;
• When closing costs are considered, nearly 50% of all homes are under water on their mortgage;
• We have now reached a record in terms of unemployed people who are staying unemployed beyond their unemployment benefits;
• We also have a record in terms of job availability for the unemployed with job openings only there for one in six who are unemployed;
• Our economy is over two thirds reliant on consumer spending, which is a totally unsustainable model going forward;
• Financial companies have doubled their GDP contribution in the past decade or so, though it is now obvious that they are not adding any benefit to the economy; and
• I am tired of repeating all this bad news with seemingly no one paying attention.

Folks, I am not saying when the problems will sink in and take hold, but they have to at some point. At the very best, our economy will be stagnant for years to come, probably over a decade. More likely, in my opinion, we have a world of hurt on the way with the only question in my mind being when will this reality sink in? You tell me. Until then, with the market near record amounts since March 9, I am personally going to hunker down for a while and see what happens.

Disclosures: None.