This morning I turned on one of the financial media stations to see what was going on in the markets and the big news was the BLS Employment Report which provided some not-so-optimistic figures. A couple analysts on the show were cackling about how the figure was meaningess because of the dire weather in January. Now, if memory serves, these same perma-bull analysts were chearing December's numbers like 15 year old girls at a Lady Gaga concert. Back in December, they showered praise on the central bankers and government beaurocrats for creating the stimulus which was successfully reviving the economy. Not one mentioned that December's positive number might have just been the effect of Christmas and the corresponding increase in economic activity.
I find it odd that the financial media will blame a bad number on an Act of God, but they won't give any credence to a good number having something to do with the Birth of God. Is this an acute sign of hubris when man gives himself credit for the good and blames God for the bad?
Unfortunately, the jobless situation is bad and has no real signs of improving. I don't know anyone finding a job and I don't know anyone who is hiring. But here's the really scary development as far as I'm concerned.
Over the past 15 years, the Federal Reserve has engaged in three monetary binges. The first started in '95 when Greenspan sought to head off a small cyclical recession which ultimately helped feed the Tech Boom (and Bust). The second began in 2002 in an effort to stave off the effects of the Tech Wreck. The direct beneficiary of this binge was the housing sector which ultimately led to The Housing Bubble (and Bust). During both of these binges in monetary creation, unemployment hit all-time lows between 2-3%.
In 2008, the Fed embarked on its most audacious monetary binge yet and since then, the S&P 500 has appreciated almost 100%. But where are the jobs? How are average Americans benefiting? In the late 90's, the money went into technology and helped with the evolution of the internet. I am assuming that generations to come will benefit from the technology that was created in the late 90's. And in the middle part of this decade, the housing boom allowed millions of Americans to upgrade their living situation by either moving up or fixing up their homes. The granite countertops, in-ground salt water pools, media rooms and distressed wood floors will add utility to their lives for quite some time.
But today, the loose monetary policies of the Fed are providing no measurable benefit for the Average Joe. Job growth is non-existant, housing equity continues to be whisped away and meanwhile the cost of everyday expenses is going up at a remarkable clip. Where is the upside? And if the answer to that question is, "just no more downside", then that is a miserable way to drop $3+T into an economy.