There was little information in today's unemployment numbers other than business talk shows analysing the impact of snow storms and census workers on the overall job picture. What lies ahead are years of structural high unemployed levels ultimately resulting in modest GDP growth. That is good news on inflation which is bad news for most markets, since most strategies, even in equities, are relying on a jump. Markets will continually have to rely on declining governmental stimulus for trade opportunities such as the odd but understandable developing demand for weak corporate and sovereign debt, since they are the only markets with perpetual guarantees, thanks to a new world of governmental economic intervention.
The markets are gearing up for disappointment as it becomes evident there will be few areas to mine for growth. In the 90's we had the "I want to be a tech investor" fool. In the 0's we had "I want to be a borrowing" fool. And while some will argue that the Green Revolution will be the spark, it just does not seem that an 'I want to be a wind and solar fool' will work .
Now with low job growth ahead, the horizon is flatter than ever. Polarized social discontent will deliver fitful governmental commitments as political forces lean back to the right. Stagnant real estate prices will not recapture lost asset wealth and China will turn out to be more of a danger than an opportunity.
