June 7, 2010, 08:00 EST [img]http://www.joe-duarte.com/images/line_main_top_03.gif[/img] Dr. Joe Duarte's Market I.Q. [img]http://www.joe-duarte.com/images/line_main_top_05.gif[/img] [img]http://www.joe-duarte.com/images/line_main_top_07.gif[/img] [img]http://www.joe-duarte.com/images/000.gif[/img]
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The Internet's Intelligence Digest
Intelligence, Market Timing, And Trading Strategy For Traders and Investors
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"The End of Work" May Be Upon Us
[img]http://www.joe-duarte.com/images/000.gif[/img] [img]http://www.joe-duarte.com/images/000.gif[/img] [img]http://www.joe-duarte.com/images/line_top_bot_02.gif[/img] [img]http://www.joe-duarte.com/images/pic_04.gif[/img] What's Hot Today:
U.S. stock index futures recovered from last night's initial readings to the break even point. Asian markets sold off, while Europe was slightly lower.
- Employment Situation 8:30 AM ET
- 4-Week Bill Announcement 11:00 AM ET
- 3-Month Bill Auction 11:30 AM ET
- 6-Month Bill Auction 11:30 AM ET
- Consumer Credit 3:00 PM ET
Town hall meetings dead this year. According to The New York Times: "If the time-honored tradition of the political meeting is not quite dead, it seems to be teetering closer to extinction. Of the 255 Democrats who make up the majority in the House, only a handful held town-hall-style forums as legislators spent last week at home in their districts." And according to the Times it was no "scheduling accident" but an act by design. According to the report: "many Democrats heeded the advice of party leaders and tried to avoid unscripted question-and-answer sessions. The recommendations were clear: hold events in controlled settings — a bank or credit union, for example — or tour local businesses or participate in community service projects. And to reach thousands of constituents at a time, without the worry of being snared in an angry confrontation with voters, more lawmakers are also taking part in a fast-growing trend: the telephone town meeting, where chances are remote that a testy exchange will wind up on YouTube."
More trouble between Israel and Palestinians as four in diving suits killed. Palestinians sources say the four men in diving suits were taking part in a "training excercise." Israel says they were "terrorists." The timing and the occurrence of the deaths is likely to increase the tensions in the Middle East, at least in the short term. VOA News was the major source for this item.
Jobs report hurts consumer confidence. According to pollster web site Rasmussen Reports.com: "Friday’s disappointing jobs report has had a significant impact on consumer and investor confidence. The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, has fallen seven points since Friday’s report showing creation of only 20,000 private sector jobs. At 78.7, the Consumer Index is now down twelve points from its 2010 high water mark reached just one month ago yesterday. Investor confidence fell even more sharply. The Rasmussen Investor Index is down eleven points since Friday to 84.6." [img]http://www.joe-duarte.com/images/000.gif[/img]
[img]http://www.joe-duarte.com/images/pic_04.gif[/img] "The End of Work" May Be Upon Us [img]http://www.joe-duarte.com/images/blok_rub_top.gif[/img] How A Now Obscure 1990s Futurist May Have Gotten It Right [img]http://www.joe-duarte.com/images/blok_rub_bot.gif[/img]
Last Friday's employment report sent chills down the market's spine. At the core of the decline was the lack of private job creation as roughly 10% of the newly created 431,000 new jobs reported came from the private sector, and the rest came from government hired Census workers.
It was quite clear that the term "jobless recovery" was alive and well. And the markets sputtered, since people with no jobs don't tend to buy as many products as those who are employed. And since the U.S. economy is driven by the consumer, it doesn't take a genius to figure out what the most likely economic scenarios may be in the future.
Yet, there is more to it than that. These things don't just happen. Huge demographic trends take decades to form, and it's their effects that seem to suddenly spring up from nowhere.
In an early 1990s book titled "The End of Work," futurist Jeremy Rifkin put forth an interesting concept. Automation would lead to where we are today. And it looks as if he's pretty much right on the money.
It's not so much that robots have put people out of work, which is part of the story. It's that so called "productivity" where workers seem to be doing more with less effort is only part of the picture. Millions of jobs have actually disappeared forever, being replaced by machines and the lack of a transitioning mechanism.
According to Rifkin, the solution should have been the creation by government of a work force whose only function should have been to help those who lost their jobs find something productive to do. Instead, we have had an expansion of the welfare state, where people are subsidized by the government for doing no work, and talent and human capital has been lost forever.
This is illustrated quite clearly by the situation in Europe where the social safety net is so vast that it's collapsing under its own weight. And the situation in America seems to be headed along the same path, at least in many ways.
Indeed, what we're seeing now is the product of what corporations and governments did decades ago. The latter increased automation in order to increase profits. We're seeing that now, as many firms have reported healthy earnings, even during economic hard times. That's because they have fewer workers to pay and because machines are more productive than people, plus they don't require health care and retirement benefits.
With regard to the governments, welfare has expanded to the point where states are running budget deficits due to high Medicaid costs combined with fewer tax receipts, because, you guessed it, fewer people are working, and thus paying taxes.
Rifkin's conclusion is interesting. If the world doesn't transition from "work" to something equally productive, humanity is essentially done. The solution, of course, is nebulous, but hints at a Star Trek like situation where we all follow our chosen paths for the sake of self fulfillment and the greater good.
The reality, at least for those without work is a bit harsher.
Conclusion
If "The End of Work" is really upon us, it's not likely that too many people, at least the rank and file every day person is aware of it. Rifkin's books are not exactly part of the everyday curriculum in public or even private schools. We found our copy hidden within a stack of old books as we were looking for something else.
A Google search for Rifkin doesn't even provide any current listings. And Mr. Rifkin is not a fixture on the cable news talk circuit. Honestly, we're not sure if Mr. Rifkin is still alive.
Yet, the concept of "The End of Work" seems to be holding up, and it's quite clear that millions of jobs aren't coming back. So, it looks as if he was, and presumably, is correct in his prediction.
The government is clearly not participating in Mr. Rifkin's suggested solution, the creation of a work force whose job is to help sheperd those who lose their jobs into some kind of meaningful transition. The government seems to be busy trying to stay in power, and little else these days.
So where does that leave us? At least you've been informed, and you may want to get your own copy of Mr. Rifkin'g book: "The End of Work." If you would buy it from our Amazon.com book store, we'd be grateful. Click here.
P.S. If someone knows Mr. Rifkin and you'd like to pass this column to him, we invite his comments and would love an update.
We'll be on Twitter some time today before the market closes with some updated comments.
Prepare for an uncertain future. Get a detailed trading plan in your pocket. Read Dr. Duarte's All NEW Books "Market Timing For Dummies." and "Trading Futures For Dummies." The Trading Manuals for All Seasons. Also Available As Kindle Books.
[img]http://www.joe-duarte.com/images/pic_05.gif[/img] Market Moves Manpower Inc. (NYSE: MAN) Bled Lower After Employment Data
Shares of Manpower Inc. (NYSE: MAN) made a new low after last week's employment report.
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Chart Courtesy of StockCharts.com
The stock market may bounce today. It is very oversold, and last Friday's big hit will bring out the "bargain hunters" and those who will cover their short sales.
But the employment report was bad. Few private sector jobs were created, and fewer and fewer jobs are likely to be created as things develop in a global economy that is contracting under the weight of decades of bad policy and too much spending and leverage.
Shares of Manpower Inc. fell to a new low on Friday, after having plunged over 20% since topping out on April 21, 2010. What makes this most important is that Manpower is a head hunting firm for the executive suite, where jobs have been hit to a lesser degree.
What it tells us is that big investors are starting to bet more aggressively against a recovery in the job market, a fact that could start to spread to the consumer sector and the rest of the market.
So once we get the inevitable "dead cat" bounce on Monday, we'll see what's really on the mind of traders. It doesn't look great at this moment.
