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August 01, 2013

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WHAT ARE WE DOING? First time unemployment claims for last week's encouraging number were REVISED UP and this week's numbers increased once again. The unemployment rate targeted by the FED as a reason for slowing their money printing declines because people withdraw from the employment search and NOT because they find jobs or becasue employers split full time jobs into two part time jobs.
The President nowruns around the country claiming housing is in a fantastic rebound and higher interest rates are NOT having an effect on the surge. Has anyone told him that single family houses are being purchased by REITs not people and that the hottest segment of the building business is Multfamily housing. IE People are moving to apartments. Smoke and Mirrors leadership.

RUSSIA's BAD BOY? The President has only taken 5 years to figure out what most Americans have known since WWI: Russian leadership is not our friend. Putin is a former KGB leader and the failure of the administration to label him a vrtual dictator has allowed him to thumb his nose at the west. Unilateral nuclear reductions, Syria, Iran,missile defense systems in Central Europe, are all areas where the administration has treaded very softly with Putin. Now, over the NSA leaker we cancel a meeting as retribution. With both leaders headed to the G20 meeting will it matter? Not likely. The Russian bad boy will continue to play his games pretending to be a Super power in his fantasy world. Meanwhile now that he has been reelected the President has a lot more flexibility to negotiate.(remember that sound bite?) Is anyone sitting down with him?

THEY WON'T ASK ABOUT THE TASK; the 'Headhunters' or anyone else professionally qualified to deal with a specific problem. The Media insists on interviewing itself with few exceptions. The politicians engage mostly each other but on one side of the 'Isle'. They can't even resist 'over-talking'the answers to their own questions.

JOBS,JOBS,JOBS----Remember those promises in 2008 and again in 2012? Today after rosy predictions of 200,000 new jobs to be created and the encouraging numbers from May and June, we learn that we created 162,000 jobs in July and 26,000 less in May and June than reported earlier. We have now borrowed more than $5T under this administration and printed more than $4T in money to prop up the economy with Fed buying of bonds and mortgages. And, what have we accomplished for the middle class Americans the President panders to? Higer taxes. Higher prices for food and gas. Total uncertainty with regard to future healthcare options. A housing market that has no idea if there is to be a future of demand or foreclosures. A President who has no clue how (or desire)to work with the Republican House to negotiate solutions for our long term entitlement programs. A GDP growth that barely supports life as we knew it.

Let's look at the numbers: There are 7.9 Million unemployed workers. There are now 8.5 million part time workers. And, who knows how many under employed workers there are. Likely 10 million or so. The combination of these is around 25 million people in dire circumstances trying to pay their bills and keep their houses. You can argue all you want that employers are not moving to less hours for low wage workers to avoid Obamacare penalties but the numbers continue to show that the part time people and temporary workers are a fast growing segment of the workforce. Ask a headhunter what companies are soaring: staffing companies or permanent placement firms and the answer will be clear: Staffing companies who convert full time workers to temporary workers for companies looking to shed the medical benefits risk.

And, the unemployment rate continues to drop since part time and temporary workers are counted as employed. The average hourly wage DROPPED again this month. Meanwhile, the Administration and Democratic states continue to try and pass higher minimum wages to offset the effects of their dependecy policies. So, is this set of policies really good for anyone? Perhaps, short term, it is good for low income/no income people. But, that includes the millions of college graduates who cannot find a job. And, I could argue it inhibits the opportunity to rise up out of the basement and join the true middleclass.

Meanwhile the failure to do tax reform pushes more and more jobs overseas as companies seek safe tax havens overseas to produce their products and this is not just China and India. Some people argue that it is not just tax policy but it is the availability of skilled workers overseas. That may be true in some respects but it is more likely that employers are avoiding the payroll tax policies, healthcare mandates and employee unemployment taxes of the USA. With the US having the best college education system in the world it is unlikely that there are better trained workers over seas.

JOBS,JOBS,JOBS--it would be nice if anyone in the government would ask the JOB CREATORS what would work to get hiring started again.

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