I mean the markets were sharply down again, the Fed's minutes disappointed, and Spain has now been forced to undergo more painful austerity, and of course even China is slowing-only growing at 7.5 percent don't you know-and there seemed to be a veritable desert for good news.
To be sure I consider it good news at least in the long term that the polls show that even if we don't pull out soon it's unlikely that voters will take it out on President Obama. Which of course doesn't mean we want the pain to continue-which was the firebagger candard: if you say the President can still win re-eleciton with a struggling economy you are advocating a struggling economy.
Still it was nice to come across this piece of good news:
"The number of Americans filing new claims for unemployment benefits last fell sharply to the lowest level in four years, while U.S. import prices fell in June by the most in more than three years, government data showed on Thursday."
"Initial claims for state unemployment benefits dropped 26,000 to a seasonally adjusted 350,000, according to a Labor Department report — a hopeful sign for the struggling labor market."
"The drop, which brought new claims to their lowest level since March 2008, was much steeper than Wall Street economists expected. The prior week's figure was revised slightly higher to 376,000 from the previously reported 374,000."
To be sure it's not all green shoots-far from it. Employers have greatly slowed down the pace of hiring in the second quarter-a fact I am all too well aware of personally!-due to uncertainty and anxiety. Europe remains the big worry. CNBC also ascribes concern over the "fiscal cliff" which I interepret as a worry mostly for the GOP and it's wealthy donors.
That woman at Romney's soiree on Sunday crying because the woman who does her nails doesn't get her might worry about the fiscal cliff. Other than that it's overdone. I say let's call the GOP's bluff for once. We finally have a hostage we should be willing to shoot if need be. There is no fiscal policy in my life time I've hated more than the Bush tax cuts. This is why despite all the kvetching by Jane Hamsher over at old Firedoglake last Summer Obama actually schooled the GOP during the debt ceiling farce. Check out David Corn's Showdown for more on that.
While employers didn't pick up the pace of layoffs they slowed down the pace of hiring. Again, I know this all too well. Maybe though news like this if we see further follow up with more good news will have a certain self fulfilling efficacy-maybe some employers read in the papers that unemployment claims are down and reason that things are better again and they can hire again...
To be sure I personally evidently have a new job starting soon-next week I am told. Finally I'm benefiting from family relations. I often have wondered why I couldn't have family and friend get me a job they way many others I know have. And the truth is a large number of people with jobs got it form someone they knew. The job will start out being very part time but hopefully by Fall should be much more regular.
So next week Nanute all going well Popeye's may be on me-but this week let it be on you! Yes my hints are subtle.
There is one more caveat. Part of the better numbers may be due to a one time event with the auto industry in the first week in July:
"Still, the jobless claims data had an important caveat. A Labor Department official noted that part of the drop might be due to some auto manufacturers keeping their plants open during the first week of July to meet demand."
"Normally plant closures during that week would lead to a spike in jobless claims, but they did not materialize. That suggests part of the strength in the labor market last week might be due to temporary factors."
"The four-week moving average for new claims, a better measure of labor market trends, fell 9,750 to 376,500. That is still a significant drop, although the average is only at its lowest since May."
No one I speak to thinks the banks are a good bet even at bargain basement levels. Not Nanute, not dwb at Money Illusion, now WOJ who writes Bubbles and Busts has added his name to the list.
I should point out he's got a very good blog and is a very knowledgeable guy. His blog is a great resource for someone like myself trying to get a handle on how the monetary world actually works.
WOJ makes the very interesting point that one thing that may restrain the bank profits for the foreseeable future is the low interest rates. That is true. The reality is that you would be better off with your money under your mattress today except for the fact of course that we are living in a debit card, electronic transaction world.
On the other hand, dwb's pessimism has more to do with Basel regulations among other things. He made the best point of all perhaps against the banks by pointing out that bargain basement prices are in the basement for a reason.
He argues that you should stay diversified-he likes the long-short ETFs. My trouble is I don't know how you make money with it. Obviously you can day trade as these are designed to have 300% gains in one day. But that of course, as dwb says, pretty dangerous. I guess the idea is that they are supposed to be part of a more comprehensive portfolio strategy whereby you have cash equities, bonds, etc.
My only money is unemployment check money-not much to build a portfolio on. You know the kind of money that Sumner thinks I'd rather have than work. Yes, I'm choosing leisure at $100 a week over making $800 a week and no leisure. If you think that you don't know me at all.