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Banks, Bernanke, and Geithner, Oh No!

Following the Scott Brown victory in Massachusetts, Progressives quickly found new targets to offload some blame.  With U.S. unemployment at ten percent, what’s the impact on job seekers as political leaders attack banks, Bernanke, and Geithner?

As it turns out, while Bam-Bam was crushing the banks last week, the theme carried over to Fed Chairman Benjamin Bernanke and Treasury Secretary Timothy Geithner.  Why not put them on the chopping block, too?

The stock markets swooned 5% last week.  That’s the kind of three day fall we saw during our “mini-depression” last spring.  It ignited volatility.    There was nowhere to run.  Every market was either down or suspect.

Damage sucked the oxygen out of everything.  Even contrarians, looking to buy good companies at lower prices, showed no conviction.

Is it possible that all this will get sorted out next week and markets will stabilize?  Sure.  Would you bet your mother’s retirement fund on it?  Maybe not.

It’s just as possible, as politicians try to disembowel each other, that they’ll take the markets – and our economy – down with them.  Some traders are bracing for an additional 5% haircut in equities.

In 2009, we witnessed an inappropriate sense of certainty in Washington.  Leaders became strangely brave from doing months of triage on a collapsing economy.  It is now in their culture to seize major corporations, cancel contracts, sidestep law, and redefine entire industries.  Either Congress is composed of amazingly knowledgeable people, or it is taking historic actions based on wisdom it does not have.

Our economy was only just beginning to recover before this latest thrill ride.  On Wall Street, “Earnings Season” is kicking into high gear.  Reports have been good.  But stocks are dropping fast.  Investors have no reason to own stock in companies that will not or cannot earn profits.

If our government doesn’t want companies to make money… then what?

Recruiter’s View –  If you can find a business that doesn’t need banks or a stable economy in order to thrive, then you’ll be OK.  Otherwise, expect the strongest foreign markets to continue getting stronger:  China, Brazil, India, and even Russia.  Our multinationals are already developing those opportunities.

There are economies weaker than ours, such as Greece, that could muck things up.  That’s why the Europeans can’t move on their limited strength.  In the E.U., Germany is unable to expand if Greece may actually be failing.

Don’t forget, Dubai – the picture of prosperity – was discussing default just two months ago.  Oil has dropped to around $74 and change.  How will Dubai cover an $80 billion shortfall?  There’s a lot of financial weirdness around the world.

Here at home, businesses must protect themselves from Bam-Bam in the U.S. and faltering markets abroad.  If international barriers go up, this will be more difficult.  The shipping indexes are off, suggesting international trade is soft.  And China is raising rates and telling banks to cut lending.

This may not be a good time to kick the legs out from under the U.S. economy.

Job Seekers:  Whether you drill for oil or flip burgers at McDonald’s, international exposure is critical to the stability and prospects of your employer.

Concentrate on non-union employers who are growing their markets overseas.

Posted in Business Climate, Economy, Employment Scene, Financial Markets, Political Commentary, Uncategorized.


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