Stocks plunge as jobless rate rises
Worst yet to come?
- Duration 9:26
- Date Jun 2, 2012
Worst yet to come?
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Jobs rock and facts shocked.
June starting where -- -- Bob what that's huge sell off.
Last month the Dow posting its worst of monthly loss in two years and job growth and -- -- worst in the year.
Now someone here said that that -- to get a whole lot worse but why.
Hi everyone I'm Brenda -- this is bold and iron -- -- and there's this week Gary B Smith Tobin Smith Jonas Max Ferris.
Along with Jim what -- he's the senior vice president at -- portfolio advisors.
And former DNC deputy finance director David Mercer welcomed everybody a PGM fat and getting worse.
Is getting worse and we look at you've got re consumer incomes that are flat lined over the last several months consumer spending it's flat line.
And we look at manufacturing reports that a Dallas -- a Chicago in the eyes -- number on Friday.
It all suggests that this economy that was firing on May -- five cylinders just three months ago is now only firing on two or three cylinders beyond that we have political uncertainty and we -- this fiscal -- That it leaves a lot of employers really worried about what's ahead and that when you're really worried about what's ahead.
That means no jobs.
But even we are seeing private sectors -- the private sector is higher range and government is pulling back that is a good trend -- and that.
It's a very good trained and I'm glad you pointed out and having 25 minds of private sector.
Which is why we should not let one month.
While while disappointing -- albeit.
We want to remove -- as a warning out rather than letting the 25 minds be overshadowed by one month.
And we need to address.
The turn around him making it permanent we need to act on the president's jobs bill from September when he first put -- forth.
We need to help states prevent further firings of teachers and firefighters.
In the light.
And we need to try as the president was doing today.
To get us in a mode where we are helping a -- veterans find jobs that are coming back from Iraq and Afghanistan.
Let's stick to the economy here to chicken out and tell me you're not the hot political -- -- -- -- -- well.
First up David just a little economic 67 months of decline eight -- -- that's actually a little more than just a blip that's actually Trent.
And the reason it's happening is it's.
Purely it's simple.
-- we have an economy that is way out of -- -- it -- is it because job creation in this economy.
It's not from government it's from the private sector of the job is seen as is always been for the private sector and the private sector has said give it all the things that they have to look at and deal with and are uncertain including up -- -- is government who's gonna follow up a -- and -- -- -- just got.
I bet on the last three years we've had more private sector job growth and the less that the -- lost about 600000 jobs because of the products that.
Where we've been shaken and that -- I growth up.
Hey I gotta get to somebody else now.
-- -- the question is going -- -- -- -- -- get better or is it gonna get worse argue a bull or bear on this economy.
I -- I'll look let me break it down -- it -- two things first of all I'm little bearish I kind of agree -- Jim's.
Viewpoint for all the things he had array -- and I I think that.
The government regardless of what David says has done -- a horrible job managing this economy not that they should be managing the economy -- they've been doing has been the wrong -- some bearish on the economy.
That's a different question now as to whether I'm bearish or bullish on the stock market I would think the market gets ahead of itself -- It immediately goes from feel pretty good to Armageddon everything well and -- tomorrow not only Greece Spain.
-- and ten other countries are all leaving there are gonna -- separate union.
That's why I think it's time to buy rather than sell although I'm skeptical about the economy I think it's kind of already been priced into it.
Jonas are you skeptical -- it better are we gonna get better or worse going forward.
I think we're gonna flat line -- that's better than going down and I think there's a reason why and his two drags in the economy got the rest of the world is slowing down that is a drag as we -- to export to those countries as well that's hurting.
And state and local governments are shrinking that is gonna make unemployment rates high for a walk long time it's Gaza -- GDP for a long time.
However unlike Europe and unlike that is not a permanent problem by the way the local level.
We've got his underlining Communists got straight we've got tech sector that is very -- -- growing.
An offsetting the losses in construction other economies do not have that all the great companies in the last decade.
Have been created here pretty much.
And now we'll keep our head above water probably out of recession.
And you know it's not gonna be off to the race that everybody else in the going to -- but I think we will billed a flat line.
I think our stock market will continue to outperform foreign markets even on the way down it'll fall last basically.
Updated from going forward what is the most positive thing you see about the economy what is going to turn.
At this recovery around what's gonna really make it go forward.
Well I think -- and again as I did mention that we have to.
Look for action by congress on a lot of different I don't let's not -- -- don't let let's not let.
That action by all males say that's all of that out right in the economy now.
It say gas prices where everybody was nay saying that gas prices are gonna drive us again over the cliff they're now starting the trend downward.
That's gonna leave more money in the pockets of consumers.
And you create demand and you get more hiring their.
I still higher than they were a year ago food prices a little higher than a year I gotta go and politics is the problem we've got a fiscal cliff that nobody knows what's gonna happen by the end of the year.
And that creates in action not only that if we get.
Bad problems out of Europe that start up faster then it's gonna -- Interbank lending is gonna reach out and that's gonna translate over here.
So we have a lot of issues in front of us I don't think it's over yet I think it's going to be -- but very very -- I even with a dog that.
But don't -- last may we had had we had a rough time last mainland Europe was the issue again and then we came back what's to say that we knew exactly.
Well there's 22 positive things coming here at at and what is is if we get more clarity businesspeople the jobs creators get some clarity forgot like Europe.
Some policy change except that I think -- you get a positive note.
I don't are we gonna get that the next three -- four -- I don't think so.
I'm the same thing with the stock market and economy is -- there are two separate things stock market got way ahead of where the economy was -- that was silly and this is a natural correction.
The bigger issue is as as we know we still have 700000.
Jobs we can't -- in the United States we have some some jobs and they're going to be great at -- and finally we have the energy economy.
The -- economy and energy economy are doing just fun.
-- but let let me.
Didn't let me get kind of give the flip side though because David made I know this is a shock he made one good point -- -- and that was about the gas prices and I am by the way I'm waiting for Obama to bring in the speculators and and asked what.
That's why did you.
Isn't it kind about the -- I guess anybody I've really got going everyone thought gas prices are gonna go to five dollars now look like big Mike go to three dollars.
That that's the same rationale -- -- one thinks -- nothing good can come up Greece and Spain and yet all it takes is one.
Good thing to turn around people say oh my gosh it's not as big.
As we thought that's going to be and then all of a sudden things get rolling momentum gets going and then all of a sudden we see the -- moving back up again.
Jennifer can't keep what you think we're gonna flat line but there are two issues here that make people feel return as the stock market and the whole market.
Neither one of those seems to be picking not so so where does that leave us.
-- -- some of it is full lot higher than it was a few years ago but I will say very recently because of this recent prices interest rates have plunged Italian get a fifteen your mortgage under 3% interest rate.
And I will say a lot of corporation there -- -- get -- it is hated us well I'm an investment well.
Yeah a lot of people can -- that this morning the economy a lot of corporations now can borrow even lower rates because of the fallen race.
They're -- more profitable and congress still can raise a lot of start -- capital both.
In the IPO market as you saw FaceBook and -- an earlier stages so the money's there to juice the economy both in housing.
And you start up businesses and that's -- if -- -- that is there we're not gonna flawless and just viral that it -- like other countries may I think we'll we'll keep our head above water epic jam.
How are you want you want me to reactor that okay.
Here's the problem here's the problem all of these things have happened over and again the last two years it's happened when we ran -- -- stimulus into -- and intent.
The market sold off and then we started going back out where -- -- stimulus in 2011 same thing happened.
The thing as though the Federal Reserve board is is not talking about stimulus now and neither is the ECB.
And we are running into a debt wall now.
These debt walls have we that we kicked the cans down year after year after year but now we've got this giant aluminum death -- Waiting and it and it's bigger ball and we're gonna see Parse defaults.
That is deflationary that's one reason -- -- are going down and that will impact the stock market just.
Okay I don't all right there we go that's got to be the last -- thanks guys.