OK, Today is Scary

Unemployment rose to an "official" level of 6.7% today as DOL reports 533,000 jobs lost just last month. This is the worst jobs report in 34 years, since 1974. Merry Christmas indeed.

The name of the game in any recovery is not the Dow, it is not financial stocks, it is not even rising house prices (which are a lagging indicator).

By far the most important leading indicator of a possible turnaround in the overall economy is J-O-B-S. Without jobs, and without confidence in jobs and employment overall, there can be no confidence in the economy, no confidence in one's personal income, and no confidence therefore in new personal or business spending. And that means no quick turnaround.

This means houses will continue to be difficult to sell, although by no means impossible.

On CNBC just now, a trader referred to the jobs report as a "lagging indicator." This may be a technical point, but for most people not on the floor in Chicago or New York, the employment statistics are a tremendous insight into the true state of the economy and the longer term trend.

And when we are measuring economic statistics by the decades in terms of new lows, and not month-to-month, the jobs reports becomes an important forward indicator.

Employers do not like to get rid of experienced employees out of short term pessimism. When employers let employees go, you can be assured that executives believe the company will not be replacing those jobs in the short-term.

The only "silver lining" (I know, I know...) is that oil prices just fell over $1 per barrel, to lows not seen since 2004. It's not 1984, but it's relief. But of course, if you don't have a job to commute to, the price of gas becomes highly irrelevant. Who wouldn't pay 3x per gallon just to keep their job?

And who knew six months ago that it would feel gloomy to fill up my V8 with premium gas under $2 per gallon?

The only true good news is that Europe is in worse shape than we are, which means that although we're not doing well, investors should not be pulling money out of the U.S. any time soon. If another region in the world starts to pull away ahead of the U.S., then... well let's not talk about it unless we have to. So far, so "good."

Indeed.