Yesterday's DMO received a lot of comments and today's hasn't been a disappointment either. If you want to receive this earlier, just send us an email to Daily_Market_Opinion@LandColtTrading.com and type 'subscribe' in the subject line. Come on--you know you want to. :)
President Needs to Make Someone Accountable for Job Losses
By: Todd M. Schoenberger
Two weeks ago, President Obama addressed a small community college audience in Allentown, Pennsylvania, as well as the nation, and talked about his plan for job creation. The timing of the speech was ideal because it happened to fall on the same day the Government had released a much-more-upbeat report on the jobs picture.
As you probably recall, the U.S. had eliminated a very tolerable 11,000 jobs in the month of November; much less than the six-digit figure many had forecasted. As one trader on the floor of the New York Stock Exchange said immediately after the report’s release: “Did they miss a digit?”
The President and his team were rightfully giddy, even going as far as confessing to high-fiving others and giving a hug to his chief economist, Christie Roemer. Maybe, just maybe, the President’s stimulus plan was actually doing some good.
But, all good times must come to an end. After receiving today’s report on first time jobless claims, many are scratching their euphoric heads and wondering why more people are heading to the unemployment line.
Well, it doesn’t take a Harvard MBA to figure this one out. The November jobs report saw a wide jump in new hires for department stores because, why else, it’s the holiday season. Now, after a subpar early holiday shopping season, many of those new hires are being shown the door, and probably without their employee discounts. Think it can’t get worse? Wait until after the New Year.
As it’s great to celebrate small successes, what does the President do if the labor picture begins to really fall apart? Does he simply say “nice effort” and continue to blame the previous Administration? Or, does he find out who’s accountable and show them the door? I think you know what the President is going to do.
The jobs picture will actually take another step back, before getting better. The beginning of the year will show layoffs due to seasonal employment, and don’t be shocked if you see a few major retailers shut their doors in the first quarter. We don’t have a major holiday in the quarter (Easter bunny arrives in April, gang), and many of the majors are already surviving by the skin of their teeth.
Now the President, who is coming up on his one-year anniversary in the White House, wants to focus on jobs. His actions are way too tardy. This is the equivalent of calling the fire department after the house has already burned down. His focus should have been on job creation long before his fantasyland healthcare initiative.
Since 2010 is an election year, look for the President to find a scapegoat within his Cabinet. Anything less will discredit the President and provide even more evidence of his failed leadership skills.