Today, the Labor Department reported that the economy lost 54,000 jobs, better than the 120,000 (economists) or 90,000 (wall street) loss expected. The unemployment rate rose to 9.6% (Aljazeera, Forbes). Also, Royal Bank of Scotland Plans to Cut 3,500 Jobs. Happy Labor Day people. Nice short covering today, $SPY closed at 110.91 +1.30%, see previous post for long and short term charts with moving averages. I parsed a few things from the video.
*Growth in the second half of the year will be worse than the first half, we'll reach a stall speed for the economy less than 1%.
*By second half of 2010: 1) Fiscal stimulus becomes a drag 2) Inventory adjustment ends 3) Tax breaks over (quantitative easing 2?).
*Stall-speed growth and financial market risks (stock market, credit market, bond market and interbank spreads) could feed the double dip scenario.
*Capex spending is only 10% of GDP, that cannot lift demand on its own and if there's not final sales and final demand, firms that already have excess capacity are not going to invest more".
*India and Brazil will grow faster than China next year.