Financial News

last Friday, the unemployment report was really shocking. The reported decline of 533,000 jobs lost in the month of November was much larger than the 350,000 median estimate of many economists and our own assessment of 300000-400000 for the month. This level of monthly job loss is greater than in the previous recession of 2001-02 and one of the worst recessions experienced rivals in the postwar period. In addition, the loss of jobs have been previously recorded for the months of September and October drastically revised down to a level of more than 350,000 average for the two months, 100,000 more than the average reported. So, has the labor market, how much of the rest of the United States and international economies and strongly declined precipitately since last summer. But the November report, unemployment is far worse than the surface to give numbers. Yes, the job losses spread far and a deterioration in the services sectors and manufacturing and construction. Thus, the pattern of increased job erosion is seen since the second half of 2007. However, was the level of 500,000 monthly job losses are not expected until the first half of next year be seen if it was the level of unemployment could peak as expected. To access this level in November, when the economy is still declining alarmingly and, of course, raises the possibility of monthly job losses in the 750,000 range. Such additional loss of jobs, the unemployment rate would easily take to 7 5% or higher, that would confirm the worst expectations of many economists, including ourselves. But there is something else in the government report is that the employment caused us unemployment in the current recession vicious circle as opposed to everything we have experienced is there to see the Great Depression of the 1930s. The government report said on Friday that it first 9 million people, was available and had looked for work in the past 12 months and did not find employment and in the government’s report “are not counted as unemployed because they had not searched for work in the four weeks before the Centre for employment “for November. When we first this 9 million to 10 3 million registered unemployed in the report, we have an unemployment rate of 7. 9% to a civilian labor force of around 155 million € per government statistics are based. We believe that this seventh 9% level of unemployment is a more accurate measurement of the destruction of jobs as the unemployment rate published in the Government. We believe this by the “free fall” of the U.S. economy since the second quarter of this year, especially when measured by consumer spending and retail sales in the past three months validated. While U. S. GDP shrank by. 5% in the third quarter, we believe the GDP in the fourth quarter of this year at about 5%, with another 3% -5% contraction in the first quarter of 2009. We are still virtually no growth in U.S. GDP in 2008, when the economic decline in the second half of this year is estimated by the modest growth predominates in the first half. Please read our current economic presentation at our Web presentations on our site for more detailed analysis, forecasts and conclusions. Earlier this week, the National Bureau of Economic Research (NBER), a committee of mostly academic economists that the official arbiter of economic cycles, said economic forecasting in our 11th August 2008 article about the “dollar, commodities and geo-politics.” We would still maintain a defensive posture in relation to Capital Asset Strategy, with well above normal cash positions. We would avoid fixed income instruments, mainly government bonds. There are some attractive opportunities in local fixed-income debt markets, but also selectivity and loan due diligence is required. State and local governments are another major victim of this recession and the credit is increasingly tight. Downgrades in municipal credits are to be expected in the next two years. Once the current economic cycle bottom, we expect huge stock rallies in U.S. shares led and followed subsequently by the overseas markets. We continue to invest in infrastructure such as the long-term need for infrastructure upgrade and expansion will be attracted, is great. Other industries we see as attractive for investment include electricity generation, energy conservation, agriculture, water conservation and development, health and education to overtake. We invite questions on our current estimates and forecasts of the economy and capital markets for the rest of this year and next and the longer-term economic prospects and capital market