Monday, December 06, 2010

Eleven of the 18 members of President Obama’s fiscal commission voted Friday to embrace a
controversial blueprint to slash deficits by nearly $4 trillion over the next decade -- too few to command
a quick vote in Congress, but far more than even the panel’s most ardent supporters had predicted just
a few weeks ago. The panel has proposed dramatic cuts in military spending, raising the future
retirement age and eliminating popular tax breaks. – Washington Post
The Economist magazine this week offered a primer for exiting the euro. An exit from the club,
they say, might be as attractive for the strong (Germany) as it is for the weak. The cost of leaving would
be enormous, the magazine says, but they may not be so bad in comparison to the cost of staying in the
single currency. Therein lies the true danger to the euro, they say. – Economist/FTN Financial
Bernanke on “60 Minutes” - nothing too incremental from the interview – Bernanke has
discussed a lot of these view points before. One of the more interesting remarks though was the
chairman’s thoughts on inflation – he thinks the worries about inflation are overblown and that if need
be interest rates can be raised “in 15 minutes”. Bernanke says that more QE is possible if warranted by
economic conditions (this last comment hit the news wires late in trading on Fri). – JPM
Nothing Promising in Ugly November Labor Market Report Just when economic conditions
were beginning to look favorable, the Labor Department released a downright ugly assessment of em-
ployment. There was nothing promising in the November jobs report. The U.S. economy added a paltry
39,000 new nonfarm payroll jobs during November — considerably less than the median expectation of
a 150,000 increase, according to a Bloomberg survey. – Bloomberg

Private Sector Nonfarm Payroll Additions from recession bottoms

This chart shows how the last three recoveries have been ‘jobless.’

Retailers Apply Inventory Management Tactics to Hiring – U.S. retailers, having honed their skills
at just-in-time inventory management during the recession, are applying the same strategy to their
workforce, according to Guy LeBas of Janney Montgomery Scott LLC. Employment in the retail industry
is decelerating while hiring of temporary workers across the economy is increasing, indicating gains in
the latter may be holding back more permanent staffing. – Bloomberg

Regulators see growing putback risk – “The Federal Reserve Board is now leading an
examination of put-back risk at the largest banks, asking institutions to include their exposure to
repurchases in reports to the central bank about their capital strength….Many see this as a first step
toward higher regulatory requirements.” American Banker
John F. Kennedy retains his top position in Americans' current ratings of how presidents of the
past 50 years each handled their job when in office, followed by Ronald Reagan. Bill Clinton, now third,
has moved up on the list in recent years, while Jimmy Carter has sunk from third to sixth. Richard Nixon
remains in last place. – Gallup