No End in Sight
Reuters wrote, “The euphoria with which investors in the U.S. stock market greeted the Federal Reserve’s decision to stick with easy money policy has begun to evaporate, as the message the Fed was sending about a less than stellar economy sinks in.”
It would seem that with earnings hard to come by stock market valuations maybe too high.
“Profit growth for 2013 is expected at about 6 percent, a far cry from the 31 percent achieved in 2010.” Profit/earning ratios maybe higher than justified and stock prices may soon begin to fall.
“If earning estimates continue to fall, that’s going to raise the markets P/E, or force investors to pull stocks lower in what they see as overinflated valuations.”
Companies are also not able to rely on lost cutting measures to boost their bottom line. They need growth in an anemic economy. So much for the Obama Administration’s help for the small investor and middle class.
Well how are women doing? If you listen to the administration, the answer is quite well. After all, unemployment data, according to Bloomberg, appear to reflect big advances for women. “The jobless rate for females 20 years and older in August was 6.3 percent, the lowest since December 2008, compared with 7.1 percent for men.
However, the lead for this Bloomberg article written by Ian Katz and Alex Tanzi tells it all. Their story is entitled, “Women waiting tables provide most of female gains in U.S.”
Their story begins with the real life of Victoria Honard, a 22-year-old graduate from Syracuse University who works 25 hours a week at a Washington, D.C., restaurant waiting tables as she looks for a more permanent position.
Ms. Honard’s degree was focused on education, health and human services. She has a positive attitude concerning her quest. “It’s a gradual process and I try to be systematic about,” she said. “I’m just lucky I have something to support myself in the meantime.”
About 60 percent of the increase in employment for women from 2009 to 2012 was in jobs that pay less than $10.10 an hour,” according to the National Women’s Law Center using government data. But, the housing boom is underway and American’s are gaining back their lost income. Right? Well, you are supposed to think that. Ms. Diana Olick wrote an article for CNBC entitled, “The Mini-Boom in Housing Is Already Over Realtors.”
As her story unfolds, it would seem given the traffic at lock boxes, realtors are “uncharacteristically pessimistic in their predictions for sales this fall.”
Lock boxes are those small key boxes that allow access to property for sale. For whatever reason, the times these boxes were opened in August took a nose dive. As interest rates rose, many people jumped to refinance or buy. Interest rates are no longer rising and there appears a lack of inventory for purchase. With the overall prospects for the economy, the first-time “homebuyer market has collapsed,” according to realtors – which points to no jobs and a real lack of quality education, which the new world economy favors.
Speaking of education, there was an excellent article in the weekend edition of the Wall Street Journal, it was a half-page interview with Bob Funk, president and founder of Express Employment Services. Mr. Funk’s business is booming due to the desire for part-time workers because of Obamacare.
“Firms are just very reluctant to hire full-time workers,” Mr. Funk says. “So they are taking on more temporary help, which is what we do.” Obamacare imposes new mandates and penalties on companies with more than 50 full-time employees – and even those working 30 hours a week are considered full-time.”
Mr. Funk’s favorite cautionary advice is, “If you’ve got a college degree in psych, poli-sci or sociology, sorry, I can’t help you find a job.” He urges greater emphasis on vocational and practical skills training in schools, universities and community colleges.
Mr. Funk feels too many workers are functionally unemployable because of “attitude, behavior or lack of the most basic work skills.” One in four applicants can’t even pass their drug test. He said America must do something about the “vast social welfare state programs that have become a substitute for work.”
So the economy continues on its phony ascent led by the Federal Reserves purchase of $85 billion of bonds per month. There are no full-time jobs for many Americans and the real prospect of a drop in asset prices especially in the stock market when the reality of limited earnings sets in. Americans need to tell their government to “back off.”