recession

       Let's stipulate right up front: it's silly to infer much from one month of job-creation numbers.  The numbers bounce erratically, they are often revised dramatically one month later and they routinely  defy the consenus forecasts by a wide margin. 

      Last month, forecasters were surprised and the media were elated when the Labor Department reported that job losses dwindled to just 11,000 in November -- much lower than expected (and revised today to a net gain of 4,000).  The newly exhuberant forecasters were surprised again on Friday, when the estimated job losses in December jumped back up to 85,000.  

       "U.S. Job Losses Dim Hopes for Quick Upswing," declared a headline in The New York Times.  I'm not sure how much hope there was for a quick upswing, but I'm even less convinced that the new job numbers change the picture all that much. 

      But here's what's interesting: the Fed's policy under Ben Bernanke seems intentionally geared to high unemployment for the next several years.

It was a scene at the end of The Matrix Revolutions -- the third in the series -- when Neo defeats the machines and Link, the character played by Harold Perrineau, shouts to the people of Zion, "It's over.  The war is over."

CNBC today did the financial equivalent of what Link did when it shouted to its viewers that the recession is over. Take a look for yourself below.

Is everyone else having to make as many changes to their address/phone list as I'm doing these days?

Between layoffs and job moves, I now seem to have to set aside a hour or two a month just to keep my Contacts up-to-date.  As you might imagine for someone who deals with the media, these days the biggest number of changes is to my list of reporters.

Maybe this is a new business opportunity: create an economic statistic that measures the relative number of changes per monrth.

We'll call it the "Contacts Index," get someone to sponsor the survey, and move the markets when it's reported on CNBC on the third Tuesday of every month.

I'm sure we can get Santelli to rant about it.

Every morning this week the Fed has announced another action to bolster financial markets.  At 7 a.m. this morning, the Fed and six other central banks announced a coordinated 50 basis point (half a percentage point) interest rate cut.  That's the first global economic policy change ever.

I'm not sure about Andrew, but Pete and I are old enough to remember Alfred Kahn, the economist who, during the Carter administration began to use "banana" instead of "depression" after the president reportedly was furious about Kahn's speaking the D-word in public.

We're coming up on the 30-year anniversary of this momentous event in the history of economic policymaking. Thanks to Carter and Kahn, a fruit became the name for the economic hardship people were concerned about or actually experiencing.

It was also 30 years ago that Carter was promoting a $50 per person tax rebate to help stimulate the economy.

Carter's $50/person plan was widley derided. I have a lasting memory of then Ways and Means Committee Chairman Dan Rostenkowski looking down at Council of Economic Advisors Chairman Charles Schultze from his seat at the Ways and Means Committee and asking in a very sarcastic tone what Schultze was planning to do with his $50. It was a simple question that immediately made the policy look silly.

Andrew Samwick, one of my bloggers-in-crime here at Capital Gains and Games, had an interesting post on Thursday about whether we're in a recession.

Andrew was speaking like an oustanding economist, which he is.  I can report that after spending most of the past week talking at conferences sponsored by two of the largest brokerage firms as well as doing separate meetings at several individual offices of a third, there is little doubt that the people on the ground have already concluded the downturn is real.

Wall Street constantly complains about how Washington incessantly debates issues instead of acting on them.  That's why its almost comical to watch the current situation as Wall Street continues to debate whether there is or will be a recession while Washington has already enacted legislation to deal with it.