Unemployment rate fell to a six-year low of 4.4% but underemployment skyrocketed up – the long term effects on stocks, bonds and currencies
Peter Oberois
Apr. 7, 2007

The underemployment is defined the less than full utilization of the work force. It distorts the employment figures. Simply put, if people cannot get jobs they deserve, they have to accept burger-flipping jobs. That creates underemployment – a typical characteristics in poor developing countries.

People continue to lose well paying jobs in big corporations. They go on unemployment and finally realize they cannot get the high paying equivalent jobs any more. They finally start a small business using their 401(k) retirement savings and loans against their home or accept low paying jobs. The low paying jobs pays little. The new small business is a loser in most cases for the first two years. That is exactly what is going on in the economy. This is called typical underemployment. It creates stagflation at first. Interestingly, the Federal Reserve has started accepting the fact stagflation is in the economic horizon. Eventually, stagflation changes into deflation and creates stealth depression in the economy.

| We are in the very early stage of deflation. Some people are calling it disinflation. Because of the early stage, the economy is still bouncing back of the lows. That is creating gyration in the bond market and creating false hope in the stock market. The bounce in the dollar index is interesting too.

The long term effects of all these on the stock market is severely bad. The bonds can moderately rally.

Unemployment rate fell to a six-year low of 4.4% but underemployment skyrocketed up – the long term effects on stocks, bonds and currencies
Peter Oberois
Simply put, if people cannot get jobs they deserve, they have to accept burger-flipping jobs. That creates underemployment – a typical characteristics in poor developing countries.
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Oil will continue to collapse towards $50 a barrel and stock market will join the downtrend
Sam Adelton
But a point has reached when over supply of oil will make it come down sharply. The stock market will start the downward journey as economy starts going south under deflation.
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Real Estate recovery can last two years but brokers will get wiped out
Karen Zuba
The title insurers, the attorneys, the real estate brokers, the appraisers, the mortgage brokers, the inspection companies…. the list goes on who make big bucks on home resale.
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The bond market correction an ideal opportunity for trade as deflation expands its grip on economy – a steady slide in stock market lies ahead in April
Peyter Oberois
The corrective trend in the bond market is setting the stage for a fantastic rally in the debt markets. The higher than expected payroll rise has seasonal effects and is cyclical move within a new secular up trend in the employment rate.
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Industry chamber, CII today warned that any further tightening of money supply by the Reserve Bank of India would trigger a slowdown of the economy
Media Release
There are already emerging signals in the form of slowdown in the automotive sector and retail banking....
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Start of third world war – the trade war has started - U.S. Plans WTO Case Against China on Movies, Books – Stock markets will collapse in 1929 style
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This in turn has created the domain for the third world war – the trade war. It is taking shape the same way 1929 took shape. The trade war eventually created depression.
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