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Where Have All the Jobs Gone?


It's just a myth that they're being created and saved.

Editor's Note: This article was written by Richard Suttmeier, chief market strategist at, which is a fundamentally-based quant research firm in Princeton, New Jersey, that covers more than 5,000 stocks every day.

Believe me, I wish it were true,
but in my judgment, the Obama Team of economic advisers should show some real truth about jobs. There has been no evidence of jobs created or saved in recent Beige Books. The Labor Department's own surveys don't back up this ridiculous claim.

According to the Labor Department, there are 6.4 unemployed workers for each available job opening. That's up from 6.1 in October and a record high for this statistic. Job openings fell to 2.42 million in November from 2.57 million in October. Put into perspective, the peak in job openings was 4.8 million in June 2007. This is an additional woe for Main Street. Layoffs may be declining, but hiring doesn't pick up. So where are the jobs created or saved?

I consider the Beige Book as the gossip columns from the 12 Federal Reserve Districts. In early December the Beige Book showed that Housing and Financials weren't out of the woods. I don't expect much of a change in today's Beige Book for the January 26-27 FOMC Meeting. Home prices should continue to be flat or declining modestly with home construction weak. Commercial real estate and related construction should be described as very weak and, in many cases, deteriorating. Loan demand should be described as weak with tight credit standards and steady or deteriorating loan quality. There will be no mention that the Obama Stimulus was creating or saving jobs.

Alt-A Mortgage Resets Coming Home to Roost -- The wave has begun as thousands of homeowners feel the pinch of skyrocketing monthly mortgage payments as principal and interest rise simultaneously.

The value of underlying homes has fallen dramatically since mid-June 2006, making it next to impossible for affected homeowners to even try to make these new payments. It's estimated that 1.3 million mortgages, worth close to $400 billion, were underwritten in 2004 and 2005 alone, and these are in the midst of that fifth year, when monthly payments zoom higher. Sources say that 88% of the Alt-A Option ARM mortgages that originated between 2004 and 2007 are up for resets right into 2012.

The theory that China will lead the global recovery takes a hit.
Asian stock markets declined over night as China moves to curb bank lending, which will slow the pace of economic recovery around the globe. This appears to be just the first step toward reducing the massive stimulus in China. The China 25 Fund (FXI) ended Tuesday down 3.4% since testing my annual risky level at $44.53 last week.

The 10-Year yield
faces a $21 billion supply test today. My monthly support remains at 3.868 with my semiannual resistance at 3.675, as this week's pivot at 3.769 remains a magnet.

Source: Thomson / Reuters

Comex gold stays below monthly resistance at $1167 with quarterly support at $1085.

Nymex crude oil found resistance just below $84 with weekly and annual supports at $77.99 and $77.05. Gasoline is higher than it was throughout 2009, which is a direct tax on consumers.

The Dow finally won a round in the Title Bout with the Bear. The score strands at six to one favoring the Bull. A close below my weekly pivot at 10,619 today will give round eight to the Bear. A weekly close below my annual support at 10,379 would be a knockout for the Bear. Monthly and annual resistances are 10,997 and 11,235.

Source: Thomson / Reuters

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No positions in stocks mentioned.

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