Market Talk

Okay, I think I’ve got my question for the Fed chairman. But before I tell you what it is, read this snippet from Newswires’ Michael Derby, who’s covering Bernanke’s speech at the National Press Club:

MARKET TALK: Bernanke Lays Out QE2′s Successes

12:40 (Dow Jones) Here are the reasons why Bernanke thinks QE2 is working: “Equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation as measured in the market for inflation-indexed securities has risen from low to more normal levels.” As for the rise in bond yields, the chairman says that’s what you would expect in light of a monetary policy accommodation.

Okay, got it? So here’s my question:

Are you kidding me?

The first thing, the first thing the Fed chairman trots out as a justification for creating $600 billion out of thin air and pumping it into the economy, is that it’s driving up stock prices? Seriously? That’s part of the Fed’s mandate now?

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Fed chairman Ben Bernanke is delivering a speech at the National Press Club in a few minutes (12:30 p.m. eastern time) after which, he will take questions from the press, a rare move.

I’m sure we have one of our reporters covering it, and while nobody asked me my opinion, I wonder, if you had one question you could ask the Fed chair…anything…what would it be?

Oh, boy, it would have to be a good one. I mean, you can’t just come at the guy and say, why are you driving up food prices and causing riots across the world? Or, why are you debasing the dollar? This guy’s an all-star goaltender, maybe not Martin Brodeur territory, but he’s good. He’d slap that thing away in a second. No, if you’re gonna get one past the five hole on Helicopter Ben, it’s gotta be a sneaky, around-the-back-of-the-net shot, one he doesn’t see coming.

With that, the floor’s open: you’ve got one question for the Fed chairman. What is it?

I’m trying to come up with one, too. If and when I get a winner, I’ll share it with you.

We see where, once again, the weekly jobless claims have fallen…after rising the week before…and falling the week before that…and rising the week before that.

I’m seriously starting to think this particular data point is telling us very little about the jobs market and the economy right now. Apart from that brief dip below the 400,000 level in December, this reading has been stagnant for more than a year. We know, too, that while companies are still trimming staff, the worst of the layoff storm is over.

What matters now, and I think it was Dan Greenhaus over at Miller Tabak who I saw first make this point, is the rate of hiring, not firing. On that front, we’ll get the big national, nonfarm payrolls report from the BLS tomorrow. The spin is sure to be pretty, but unless this thing explodes, it’s going to show exactly what the weekly claims are showing: the jobs market is stagnant.

The latest Dow Jones survey of economists has the consensus job growth number at 136,000, with the unemployment rating inching up to 9.5%. That’s barely enough to keep up with population growth, to say absolutely nothing of the 8 million jobs that disappeared in the recession (1.1 million of them were recovered last year,) or the jobs that need to be created but aren’t in order to get the economy back to a more sustainable, stronger position.

“Job loss,” Rebecca Thiess at the Economic Policy Institute wrote, “is only half the labor market story.” It’s not just the jobs lost; it’s also the jobs that needed to be created to keep unemployment stable, but weren’t.

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