Job Losses Slow

" Westbury is first trust advisors chief economist. Good morning Brian good to -- of -- it's great to be with you -- first and foremost -- get your reaction to the jobs data this morning what you make of it. Carol first of all don't you know you'd dissect some of these numbers at the remember there actually people losing their jobs and that's never good. And six point nine million job losses in this recession is is terrible but. Believe it -- there's a lot of good news underneath all of this and that is in the first quarter of this year we lost about 700000. Jobs a month. In the second quarter was about 500000. Jobs a month. And now we're down to about losing about 200000. Out jobs a month and if you got to continue that trend. I believe by the end of this year we're going to actually see some job gains. Because the economy is in the midst of -- recovery."

" All right you have been Brian for for a long time very bullish. And I've not always agreed with you but you've been relish. Yeah this going to be if in fact we are -- seeing stabilization. Is this going to be written. VU. Or L -- is correct I still see a lot of things out there. That frightening."

" I think we're in a V shape recovery and in fact everywhere I look IICB's I dream about -- at. I mean seriously look at almost any piece of economic data. And and that that it it's turned and we're balancing very rapidly the manufacturing indices that car sales housing starts. Copper prices they called copper the metal with a Ph.D. in economics. All of them are signaling that the economy is bouncing very strongly and I think by the end of this year we're going to have job gains. And as we move into next year for the next eighteen months or so we're going to have a very strong economic recovery we had a panic last year. We are now bouncing off those lows and we're going to carry on for twelve to eighteen months."

" All right silly -- is the case what you want to do right now Brian if I have missed age forty to 60%. Move. I'm scared of the stock market because I lost thirty or 40% of my assets I read the headlines in the paper based scare me still. What ruling pill."

" Yet Lexus -- the great question now what one of the biggest mistakes I see being made. Is that we're proposing lots of stuff that I think's going to be negative for the economy tax hikes in the future. Health care reform cap and trade new regulation all of these things -- they're like hurricanes off the coast. And we we we kind of project the path and we don't know where it's going to really hit. And lots of people are getting so scared abide by those things that they won't go back into the market. I think that's a big mistake right now if you look at the path of those hurricanes if you well tax hikes are not going to come until 2011. The the cap and trade is not going to come until it's really getting hit for eight years or so healthcare won't hit for two or three years even if they're passed. And so what I think is right now you have to play that that the momentum in the economy and that's up for the next twelve to eighteen months."

" Okay if the momentum is shifting. And and let's hope it definitely is shifting and and I think you make some reasonable up points there. What role. Will the Federal Reserve Bank. -- FDIC have an all this could you and I both know what is and a lot more bank failures like can't tell you Bryant how many messages I get from people saying my deposits safe and -- same luck. Nobody ever lost a dying under FDIC insurance. But there's still that Fear Factor so what role do they play in this recovery."

" At absolutely people are fearful -- you know -- I don't know how to stop people from being too fearful here but if you look at the 230 year history of the United States. It's been an amazing success story we've we've drifted away from free markets and we've come back and but but if you look at 230 your history. It hasn't paid to be a real fearful pessimistic person and hunker down and climb into a whole. If you look at bank failures. The worst case scenario in the next few years is we're going to have 500 bank failures I think it's going to be less than 300 but but let's just go with 500. That's still significantly. Less than we have in the eighties and nineties of people don't remember this we lost. Took almost 2800. Banks and savings and loans that went belly up failed. Back in the 1980s and 1990s. And yet during that period people that were invested in the stock market made a lot of money. So if all you're ever doing is looking at the bad things that are happening. Then you're gonna miss the underlying trend and that is technology is is booming. New companies are being started our productivity is is advancing rapidly. That's the what makes America so strong capitalism so great. That's what people want to focus on not that there's always negative things I guess is what I'm saying and yes -- our our big. But if you let them become bigger than they really are you're gonna make some mistakes as an investor. Excellent point spying as always terrific seeing you thank you very much. Thanks Alexis."

" 01 point we think you can look at to participate in the rebound if you don't mind that aren't sure -- you know what they have to take shots at me yeah. At -- the U variety in any in any day so far he is my real bad. And -- I think I'm joking around guys that if I'm married to this man I would be I'd be drinking along my wife and I entered -- an -- Perhaps. We need to bring some alcohol to the set when mr. -- here because he's predicting the doom and -- of that now I'm sorry yeah so I'm not predicting the gloom I'm just trying to talk about it what can look."

" I did for a second -- I'm Brian and I hit crime in these dreams that you have about is -- recovery do you have for -- why. Oh why shape. Like yeah wound up and then when group. I can picture that down you know Dan they're not dreams look at that he. You'd pick open up your your year -- economic heyday it's everywhere work. In fact the ISM. And a man manufacturing. Survey that we do those numbers on new orders and production are back to 2004. Hives so. Bottom line is is that we I think it -- mean you."

" You can open up in his -- goes that if you look at those numbers and I don't disagree with you on those numbers but you've got to look at the fact that interest rates are at zero. There at her hero are -- is not moving. It's not going anywhere jobs are not being created we got -- I that are trying to refinance commercial debt. That they're just trying to hold off of prolong the inevitable that these properties are going to go down the going to be under water and the banks are basically reads. Now the banks are not lending money I've got clients like manage money I know what's out there my clients are not getting the loans from the banks and more they cut."

" Credit lines. -- you're you're absolutely right I'm not I'm not saying everything is perfect right now but if you go back. To the early 1980s let's say that's the last time the unemployment rate was this high. Just because unemployment was high and banks were failing and credit was hard to get. And people were scared it didn't mean we weren't going to launch into a very strong economic recovery if you would've bought stocks. When the unemployment rate was over 10% in 1982. You would have made a killing in the next ten years and that's what I'm trying to say is that. Is it when things look the worse when people fear the most that's the time when there's blood in the streets that's when you need to invest."

" Okay but it and end Brian excellent point but here's what worries me Ashley Webster and what I been -- in a battle morning long. Yeah like we're focusing on the wrong issues right now -- cool even kids -- something called cap and trade right now. I understand how your costs are rising I understand the need to do something about it. I feel like all of our energy and focuses on something. That did not priority gave priority day is getting people back to work."

" Yet I kinda -- is the job creation that's the big question now what I'll -- done just to pick up on both Diana and -- both -- you know points I think that both right to -- it's good to agree I mean the numbers speak for themselves things are stabilizing and spending around but there -- a lot of clouds on the horizon. And because of that the in the bottom line is it's a consumption is a consumer economy wears a consumption going to come from people still worried about their jobs are not going to be spending. I don't know how the economy moves forward when it's so reliant on the consumer."

" X one point yet you know what there's a great point let me let me I I'm worried about cap and trade and health care and tax -- I'm worried about all of those things to."

" But they haven't hit yet I mean -- what were right politically. To focus on them. But you have to be careful because until they're actually in place until there."

" Until they're actually affecting the economy. We shouldn't really worry about them as economic forecasters as investors it's it's something that it's a it's a hurricane that's out at sea."

" Yeah -- you've got this you can't generated that path you cannot tell that to be American consumer. -- right now across this country is feeling the pain and their not lose any letup in the pain and would have been not what president Kennedy attorney. But but yes the wait a second. They're feeling the pain and they're watching their lawmakers focused on two issues that. Frankly at the end of the day is going to put food on the table is an an entitled right to be able paid for their mortgage send their kids to school and we look Alexis doesn't -- But what about the things that matter to our survival every yeah."

" Alexis you've made a great point I would argue Washington can't do anything to help as they need to get out of the way. And it can't happen in fact this this employment number. That we just got is a very important it there's a there's an important underlying thing going on in on July 24 we boosted. People on minimum wage by ten point 7%. We lost in August a 150000. Jobs for sixteen to nineteen year old. Without that we would have only lost 48000. Private sector jobs were actually doing things right now that well that harm our economy. But it's not cap and trade it's not health care they haven't passed yet -- they're talking a lot about that stuff. They're doing some things right now that are hurting us but I still even with the all of that. We're going to have a big boom because the -- is holding interest rates at zero the panic is over and we think mark to market accounting to."

" Connell here's McCain. What are we directed all this energy toward figuring out private public partnerships how to use the stimulus money more -- How can look at perhaps tax cuts or incentives for small business is how to give them tax credits if they hire new people are we having that discussion on the national stage."

" But your point we'll take especially at the small business of lending market which I think while we have really talked about yet that is one part of the credit market that that that's not necessarily return to normalized levels which should -- concern for people that are trying to. Funny business and what have you but I've been listening in on this document or our discussion over the last few minutes and its interest in this one of these rare discussions where everybody might be right it's just a question of degree in timing. -- it's very difficult to argue with Brian because guess what the facts are in his favor the economy. Is turning around just about every measure shows that the recession probably is over and now it's a question of maybe you know. Dan is going to be right to we hope that he's not we all root for the the economy to get better the long term of course but -- that doesn't mean that. We don't turn down to some sort of and another downturn sometime next year if we don't as you say Alexis play our cards right so why aren't jumping in here you know -- participated."

" Yeah I have had -- and have been neo. Following this unemployment rate deny -- some very bearish economists out there rob Carnell an ING over in non londoners are actually doing the best job forecasters see. Radio reminding in his note that if you take into account the revisions to the past couple months -- 49000 more jobs lost were actually a little closer to a worse than many estimates for this much to be sort of fell three months together -- Keep that in mind you seeing an unemployment rate. -- going above 10% in the next couple months but hitting 11%. Are on strike get better so you really have to watch this numbers when they grabbed headlines. It -- will affect people psychologically even though we are seeing the numbers started to decline of people losing jobs invest some."

" Excellent point excellent point mister west -- Chris and you stick around with us this morning that explains it's great to do it you next time I'll hopefully will be -- have a cocktail within a year discussing the future. The economy as -- of the year from now and major bull market how it got we have to end it here I'm sorry Brian."