The T-Word....

[exedir]

July(for June) was another, "good" jobs report in that it reported growth in the employment numbers of 195,000 and yet, represented, no decline in the jobless rate which remains 7.6%, and statistically showed the job picture as only still recovering, slowly from the crash of 2007-2008.

The US stock market reacted well, rising on an otherwise slow day of trading after the 4th and into a holiday, summer weekend.

There are a number of reasons why things remain slow but positive as to jobs and job creation. And yet, there remains a sense that something is not right, wrong even that cannot or has not been done or remains to be done to increase jobs and job growth.

However, there is the T-word that hangs over many that are involved in the economy both private and public. Taper. Not the one that is a rodent, a large one, found in South America but the idea that Federal Reserve will take its foot off the accelerator of pumping cash into the American economy to create inflation due to demand for investment in the economy. A few years ago the Fed introduced "QE", quantitative easing, as a way to create more money. One of the way this is done is to have the Treasury issued bonds and the Federal Reserve to buy them creating, new cash. As of now the policy is for the Fed to buy up to $85 billion dollars of bonds a month, however, the Fed has always warned the markets that at some point the QE will slow or end, or "taper", but as the market sees it, the end of free money and the taking away of the punch bowl and time to exit the financial markets. The impact on investment therefore, will be negative, stop or reverse job growth and send the markets and the economy in turmoil and uncertainty.

Or not. If the job growth is really the creation of "healthy" economic activity not the hype being done with public money to "stimulate" then tapering and the exit of the Fed from QE is necessary no matter what the short-term volatility is created.

And yes, there is a risk, not a small risk that things will not go as planned which is the concern of what happens in 2014. Already a ObamaCare wild card was played by the postponing the business coverage mandate by a year because of, well, because it can't be implemented as proposed. Other issues remain such as the status of immigration reform, the budget, debt ceiling and the world economy and world events that again mean uncertainty and risk.

[LoveLife&Laughter]

First it was Social Security will destroy the world, then it was Medicare will destroy the world.  Now Republicans tell us Obamacare will destroy the world.  Why should we believe Republicans now, they never have been right before...