Friday, September 07, 2007
Fear Creeps In
The August Employment report sucker punched the street today. "Employers cut 4,000 jobs in August, the first time in four years that monthly hiring contracted." That's quite a drop from the 110,000 jobs economists were expecting to be created in August. The hardest hit were the goods-producing sector (46,000 manufacturing jobs were cut), Construction cut 22,000 jobs. Meanwhile, Service industries added 60,000 jobs in August. The result of course is the major indices down over 1% across the board. I'm not sure what had more impact on the market today. Was it really the employment report? Or was it Granpa Greenspan's thoughts on the environment of fear enshrouding the markets that reminds him of the good 'ol days of '87 & '98. He was quoted in the Wall St. Journal as saying; "The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987." Ever since he's left the position as Head-of-the-Fed he's been crying for an impending recession to hit. We all know that every time he speaks the markets react, remember Feb.'07? I know everyone equates February's sell-off to a computer glitch, but let's get real.