Inquiring minds are reading in stark astonishment the new payroll and unemployment numbers just out:
Payrolls decreased in 28 U.S. states and the unemployment rate climbed in 21, showing most parts of the world’s largest economy took part in the November labor- market setback.
North Carolina led the nation with 12,500 job cuts last month, followed by Massachusetts with 8,600 dismissals, and Ohio with 7,800, figures from the Labor Department showed today in Washington. Joblessness increased most in Georgia and Idaho, while workers in Nevada faced the highest rate in the country at 14.3 percent.
But then the writer feels compelled to add this:
Another report showed the economy is poised to pick up in 2011. The index of leading economic indicators increased 1.1 percent in November, the biggest gain in eight months, the New York-based Conference said today. The reading matched the median forecast of economists surveyed by Bloomberg News.
What is not mentioned in any report of the “leading economic indicators” (LEI) is the little known fact of the equation that makes up the LEI. As is always the case, this ‘indicator’ is just an equation…a mathematical equation that has historically shown to work. Unfortunately, any mathematical equation can be manipulated.
In the first year of Obama’s reign, his magistrates and advisors realized that the rate of increase of cash into the economy was 40% of the weight of the indicator. Therefore, if the Fed could put enough cash into the economy, then the LEI would flip to positive. And that is exactly what happened in Obama’s first year. They increase the money supply something like 120%.
And just like that…the recession ended.
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