MarketsINFORMATION MOVES MARKETS

Or more precisely, information will finally move markets. Today was the day that everyone seemed to wake up to three facts: 1. The budget deficit is out of control, 2. The Republican Party doesn't give a shit, and 3. the fact that food and energy are causing runaway inflation that isn't being reported. A report from a proprietary analyst today

......with rising monthly home mortgage payments by those homeowners who can still afford those APR's and we have another dent in disposable income. That, in conjunction with rising energy prices and food and service costs, and the stage is set for economic slowdown as consumers are forced to cut back on spending or go further into debt in order to maintain their current lifestyles especially when one considers the loss of high paying quality jobs for lower paying temp or retail positions, many of which carry no benefits of any kind.

Finally some financial guys are waking up. The deficit has been covered by The WSJ; others have been hammering the deficit spending for months, but today was the day that everybody got pissed off at the same time. Finally even the stupid Republicrats got it. The stock market sold off on much weaker economic news caused in part by the siphoning of purchasing power due to food and energy inflation. My Thursday post is here.

Even worse, and I have commented on this before, is the "Cost of Hire". These are the costs that large corporations must bear if they hire someone. Healthcare costs are now out of sight. There is a report today in the Financial Times that spells it out. Costs per hire are killing the economy. I posted on this back in September using the only data I had which was circa 1999. You figure the costs must be at least 25% higher now. My data then as posted:

The cost per hire in a corporation of 10,000 to 25,000 is in excess of $15,000 per hire. Hire 150 people and you are out of pocket before you start two and a half million dollars. That is why the smaller companies lead a recovery even though their cost per hire is almost $12,000. Why so much? Regulations, benefits, training costs; benefits alone run 30% of salary added on; then there are the threats of law suits, women are a law suit waiting to happen, all kinds of weird discrimination suits and so on act to stop the hiring process til it is absolutely necessary to hire. That is why the independent contractors have become so common. We may be seeing employment growth through the 193,000 growth in this area for the last jobs report. And WORKERS COMPENSATION costs in a state like California can add $2,000 to the cost of a hire. That is why we may see a "jobless recovery" for a few more months yet.

Well it has been lots more that a few months and this "crises" needs to be solved by our peerless leader. When, you ask? I have my money on 8 o'clock next summer. Want to play the overs on that one?? The guy is another sleepy head, just like his old man.

Still, small investors should just watch your numbers and pay no attention to the above, which is published so you are cautious.