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The latest report of job creation in the US showed 431,000 new jobs, from which 411,000 are temporary government jobs for the census. Well, well, well, the cat is finally out of the bag.
The stock market immediately punished this bad news, but frankly speaking, many were expecting this. Why? Because the rally we have seen was a liquidity rally, nothing else. It was not related to any economic reality. Giving money to bankers to invest it in the stock market will of course bring a stock rally, but it does not much to improve the economy. It should therefore be no surprise that, firstly, the job creation stagnates, secondly the unemployment figure stays at an all time high (did we tell you that the 9.7% unemployment figure does not take into account all job seekers who have given up), and thirdly the stock market would encounter a serious correction.
There you have it, a poor policy provides poor results. There is no chance you get the right result by making the wrong decisions.
So, what should be done? The stimulus package is for the economy, not for the bankers. By the way, all the bonuses those bankers got, [the cash] will now be even more valuable if the stock market goes down and if the economy stagnates. They can now go shopping around and buy anything they want. You have been warned, I would not be surprised to see bankers converting themselves into CEO of their own real estate company.
Anyway, the point is: what should be done? Well, inject money in the real economy, not the fake economy so-called controlled by bankers who do not know how a factory works. A stimulus package is for the factories to get loans, merchants to build inventory, and businesses to keep on working.
Why is there such a frenzy in M&A (Mergers and Acquisitions) activity? Because businesses run out of cash, and they knock at the door of their competitor to be bought out. It is no difference whether you are called AIA or just a garage owner around the block, the same economic reality applies. However, what is important is that the M&A activity benefits the bankers again. They get paid massive fees to arrange the mega deals.
Food for thought
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