Ben Franklin Report: Consequences

Observable in most economic aggregates of data, there is a form of statistical lag, which is how long it takes those who count to count the count that they choose to count. This phenomenon is acutely visible in the most recent jobs report, which is accompanied by a downward revision of data from December, to the tune of 376,000 jobs in the level of employment. According to the latest figures, the economy lost about 17,000 jobs in January. There is a large disparity, according to the aforementioned story, in the number of jobs expected and those that actually were, wherein lies the statistical lag. If one can assume that there is a two month lag in the system when it comes to employment figures, how will they look two months from now? In my opinion, the stock market could come to reflect the 2003 levels of the job market, depending on the fundamental strength of the U.S. Dollar, because it is all about the Benjamins. The reporter, Rex Nutting, Washington Bureau Chief for MarketWatch, covering the jobs report also says hard times are coming, starting, "The last pillar to hide behind has fallen. Jobs are being lost in the U.S. economy."

Speaking of, the dollar isn't seen to be in the best shape, having lost ground against most of the major currencies since the beginning of the year, such as the Euro and the Yen. Canada's Dollar is enjoying the benefits of a difference in interest rates, again stronger than the American greenback. Of course, the U.S. Dollar is continuing it's increasingly not so gradual slide against the Chinese Yuan (RMB).

In a minor aside, the subprime crisis is continuing to develop in an international way. The latest casualty of the curious lending practices is Mizuho Financial Group, to the tune of $3.2 Billion. In a sign that the subprime crisis is going to spread into other sectors of the economy, pharmaceutical giants like Bristol-Myers Squibb and IT tech companies like Ciena Corp. are posting writedowns on subprime investments. Moody's is predicting that the subprime loss could amount to 85% of all such loans made, their CEO blames flawed models. It looks like the State of Florida is going to blame Countrywide Financial Corp, and the FBI is looking at 14 companies and counting. Alan Greenspan is trying to deflect blame from his time in office. In an exercise of States' Rights, states are refusing to take on the burden of refinancing subprime mortgages, a primary part of Bush's economic crisis recovery plan. And, also, there's video goodness, as Jon Stewart talks about the economy.