Economic Update

Job growth was only 17,000 in December. The already anemic prediction had been 80,000 jobs, as opposed to the 115,000 in November.

What's more, private sector employment fell.

As a result, unemployment hit 5%, a 2 year high, and this number is artificially low, due to things like discouraged workers, and statistical machinations of the Bush DoL.

So the job numbers, along with the markets dropping 2% today, have put more pressure on the Fed to cut rates.

BTW, generally the market rallies on bad jobs reports, because there is an assumption that falling interest rates will drive money to stocks.

In the world of $100/oil, we have the rebels in Nigeria's delta area threating an escalation, though oil has dropped in response to the poor job numbers.

Do you remember Bankruptcy reform? Well it ain't working. Bankruptcies have risen 40 percent in 2007.

Just so you know, the Fed is still pumping more money into the collapsing credit markets, so they are increasing the amount of money that they are auctioning on Jan 14 and 28.

You remember these loans...I made a crack about people putting up magic beans as collateral.

Just in case you are wondering how the credit crunch can effect you, the Massachusetts Secretary of State is looking into Merrill Lynch advice for Springfield's reserve fund. They lost 91.4%, about $10 out of every $11 they invested by listening to their broker

There is, however, a bit of good news, asset backed commercial paper, a sort of short term loan used by businesses, has increased for the first time since August.

Of course, there has been an Augean level of currency pumped into the market by central banks, so I'm calling dead cat bounce.