Recently by Bill Bonner: Things Get Curiouser and Curiouser
Last week, it looked as though a tide might have turned. The Dow fell another 97 points on Friday. And the 10-year US Treasury note rose to yield less than 3%.
What will happen next? We don’t know. But it wouldn’t be a bad thing if investors took a beating. At least, the rest of the country would probably like to watch.
Yes, dear reader, pity the proletariat!
While investors have recovered most of their ’08-’09 losses, the poor working stiff is still getting it in the chops. He doesn’t own stocks. He owns a house. And housing just keeps going down.
His earnings have been going down too.
He’d better get used to it. If we’re right, he won’t have to worry about just a “double-dip” but about a triple-dip…a quadruple dip…and maybe even a quintuple-dip. Forget recovery. What we’re talking about is an on-again, off-again slump that will last for a decade or more. Heck, it’s already in its fifth year!
Everything that has happened over the last 4 years confirms that our “Great Correction” hypothesis was right. This economy is going through major adaptations, adjustments and rehabilitation. And by the look of things, it’s going to be in an out of rehab for a long time.
The latest reports show:
1) No real growth 2) No real recovery 3) No end to the unemployment problem 4) No bottom in the real estate crisis 5) No benefit from QE2
The numbers that came out on Friday were just more bullets shot into a corpse. We knew the economic recovery was dead. But the non-farm payroll numbers killed it again anyway.
The Labor Department reported 54,000 new jobs in May. If this were a real recovery, the number would be over 150,000. Instead, this number shows that the actual number of people with jobs is increasing, not decreasing.
So, the people who live by the sweat of their brow are left idling on the seats of their pants. They have no jobs. And the hope of finding a decent job is receding.
Not only are there few jobs, real wages are going down too. And never before have American working classes taken home such a small portion of national income.
Bill Bonner is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and The New Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007). His latest book is Dice Have No Memory. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning.