The economic community is holding its collective breath, hoping that the jobs report early Friday morning is negative.
You read that right, the financial folks are hoping that job creation is low as measured in this federal government report because, in this bad news is good news world, that likely would mean the Federal Reserve would slow its pace of hiking interest rates in the pursuit of choking down the economy and taming inflation.
The hopes for a bad jobs report took on increased urgency when Silicon Valley Bank collapsed in price Thursday based on its announced need to raise capital. The spillover was the collapse of major averages, with the Dow down 500-plus points.
“Stay calm” the Silicon Valley Bank CEO advised investors, who took that as further indication of the need to panic.
The stock, which had closed the previous day at $267.83 a share, ended the regular trading session Thursday at $106.04, down $161.79 on the day. That’s not a haircut, it’s a scalping.
Other regional banks, even the major money center banks, the so-called too-big-to-fail operations who are held to a higher standard of liquidity, fell in sympathy.
The Silicon Valley Bank panic didn’t stop with the 4 p.m. closing bell. The after-hours session saw advisers telling clients to pull money from the bank while they could, and shares dropped another $20-plus, being last quoted in the $82 range.
It was quite the event in a week of great volatility as Federal Reserve Chairman Jerome Powell spent two days testifying before Congress and markets swung wildly with his every word.
Basically, Powell warned that interest rates may have to be raised more than expected and remain high for longer than anticipated. Neither is good news for investors, or business owners, or consumers borrowing money.
I didn’t watch it all, just enough to see it for what it was, typical political posturing by both parties.
Too many of these politicians are pathetic self-promoters. They sounded like those pompous television sports announcers who make it a point to tell you how they spoke individually with the coach, manager, players, etc., and they were told (fill in the blank). Hey, people, those huge rights fees you pay for the games buy you that access. Get over yourselves.
So it was with too many politicians, taking their five minutes to tell everyone listening that they actually have spoken with Powell in private about various issues.
Beyond these exercises in self-promotion, the Democrats wanted Powell to absolve Clueless Joe Biden of any blame for raging inflation. He would not.
Republicans wanted Powell to pin the inflation tail squarely on the butt of the main donkey. He would not do that, either
You would be correct in guessing the ridiculous hectoring of Powell to appoint a Latino member to the Federal Reserve, to demand Republicans roll over on the matter of raising the debt ceiling, or to get more actively involved in climate warrior topics came from Democrats.
Similarly, you would be correct that those insisting climate was not the Federal Reserve’s purview (price stability and maximum employment are the two official mandates) were Republicans. The Republicans also tried to elicit from Powell that reckless governmental spending – fiscal policy – was making his inflation fighting all that more difficult and that raising the debt ceiling just enabled the freespenders on the other side of the aisle.
Powell wouldn’t take the bait.
Senator Pocahontas Warren played the populist card, badgering Powell that raising interest rates to slow the economy would put people out of work, maybe one or two million of them.
Powell’s response was classic. If he fails to rein in inflation, he noted, prices rise and everyone gets adversely affected by that.
Bringing this to a local basis, impoverished Johnstown has agreed to spend $1.6 million on an out-of-state consultant to spearhead yet another Main Street revitalization.
We’ve had several similar pushes already through the years and all have been about as successful as the war on poverty initiated by President Lyndon Johnson in his 1964 State of the Union address.
A person posting on the Revitalize Johnstown Facebook group calculated that $111 million has been spent in the past two years by the City of Johnstown, money obtained from infrastructure sales, tax revenue and various government handouts.
Using faux binomial nomenclature a la the old roadrunner cartoons, Johnstown would be Spendibus Maximus.
But results? Littleus Minimus.
As long as federal or state governmental gooses keep producing golden egg handouts, Johnstown can spend merrily onward and upward.
However, should the nation decline into a depression-like economic morass, federal and state resources will need to be husbanded for things such as feeding and housing the unemployed masses, not for stringing a few more electric light bulbs across Main Street.
.
Sam Ross Jr's site 