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It finally happened. After months of anticipation and trepidation, the nation's unemployment rate inched into double digits, reaching 10.2 percent in October, after employers cut 190,000 jobs last month, the Labor Department reported Friday. The increase topped analyst expectations of 175,000 lost positions and a rise in the jobless rate to 9.9 percent. But now that the 10-percent mark has been breached, what does it mean for investors, and more important, those looking for work?

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Just how dangerous are stimulus-driven deficits in the long run?

By Charles Hugh Smith | Nov 7th 2009, 9:30AM EST Filed Under: Economy

Most mainstream academic and government economists -- elites, we should note, who are generally well-protected from the vagaries of the real world -- are united in the view that massive federal deficits to fund stimulus programs are not just a good thing but a necessary thing.

Economist J. Brad DeLong, for example, recently raked a journalist over the coals for suggesting deficits might cause long-term harm to the economy. Accusing the journalist of "not doing the arithmetic," the economics professor at the University of California, Berkeley launched into a questionable string of assumptions to reach the dubious conclusion that massive federal borrowing will add a mere $5 per year to every taxpayers' future tax burden.

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U.S. consumer credit debt falls for eighth straight month in September

By Joseph Lazzaro | Nov 6th 2009, 5:20PM EST Filed Under: Economy

U.S. consumers' efforts to pay down their credit card debts continue. Outstanding U.S. consumer credit fell by $14.8 billion or at a 7.2 percent annual rate in September -- the eighth straight monthly credit decline, the U.S. Federal Reserve announced Friday.

Economists surveyed by Bloomberg News had expected to see a September consumer credit contraction of $10 billion, after a revised $9.9 billion decline in August, and a $19 billion plunge in July. Consumer credit is down 4.7 percent compared to a year ago, and balances have fallen in 12 of the past 14 months.

In September, total outstanding consumer credit, including revolving and non-revolving credit, declined to $2.46 trillion, or by 4.7 percent compared to a year ago, the Fed said. In Q3, total outstanding debt declined at a 6.1 percent annual rate; it fell at 6.6 percent and 3.7 percent annual rates in Q2 and Q1, respectively.

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The goofy Galleon gang: Wacky hedgies play cops and robbers...with real cash!

By Bruce Watson | Nov 6th 2009, 2:30PM EST Filed Under: Economy, People, Investing, Media

As the full extent of the Galleon Group's insider trading comes to light, its story is starting to resemble something out of the movies. Although Raj Rajaratnam's house has already been compared to the homes in both The Sopranos and Goodfellas, the sad truth is that the real-life criminal ring lacks both the class of Tony Soprano's gang and the gravitas of Joe Pesci's. As details emerge, the whole mess seems to fall closer to the cartoonish excess of Animal House.

The central member of the gang -- the Otter, if you will -- may well be Zvi "The Octopussy" Goffer. Robert Khuzami, director of the Securites and Exchange Commission's Division of Enforcement, noted Thursday that Goffer got his James Bond-originated nickname "because of his reputation for having arms in so many sources of inside information." Goffer used his web of spies to cut trades both at Galleon and at his previous employer, the Schottenfeld Group.

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Nomura's Joseph Mezrich sees market rally continuing as profits recover

By Anthony Massucci | Nov 6th 2009, 5:00PM EST Filed Under: Retirement, Company News, Columns, Economy, People, Investing, Earnings

Bears who warn the U.S. stock market has gone too far too fast -- the broad Standard & Poor's 500 index is up 18 percent year to date -- may not get much vindication anytime soon. Investors should see stocks continue to rally as long as corporate profits keep recovering, says market expert Joseph Mezrich (pictured), Nomura Securities International's head of quantitative research.

And the signs look good. The estimated earnings growth rate for the Standard & Poor's 500 during the fourth quarter is 216 percent, according to Thomson Reuters. Even stripping out the volatile financial sector, the other eight out of nine sectors are expected to show a blended growth rate of 7 percent. But that's still double the 3.5 percent economic growth of the U.S. economy in the third quarter. And Mezrich says it's the fact that profit growth is outpacing the U.S. economy that stocks have rallied ahead of an economic recovery.

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Verizon Droid unleashed on NYC: 'We're gonna need more phones'

By Sam Gustin | Nov 6th 2009, 4:40PM EST Filed Under: Company News, Technology, Google , Motorola, Apple, Verizon

After weeks of build-up, Verizon Communications's (VZ) Verizon Wireless unleashed its new Google (GOOG)-powered Droid smartphone on Friday, and New York City retailers were selling out of the device -- billed as the first legitimate challenger to Apple's (AAPL) iPhone's first legitimate challenger -- on the first day.

"We're gonna need more phones," Amanda Leavelle, a Verizon Wireless store manager in Manhattan's SoHo neighborhood, said around 2 p.m. "I just checked, and our inventory is running low, so I've got to call for some more."

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What to do about Fannie and Freddie: Restructure -- or terminate?

By Matthew Scott | Nov 6th 2009, 4:00PM EST Filed Under: Company News, Investing, Fannie Mae

Fannie Mae's (FNH) report of a third-quarter loss of $19.76 billion and subsequent plea to the federal government for $15 billion in additional aid is sure to intensify a big question that so far has gone unanswered: What can be done to stem the bleeding at the giant mortgage lender and its sibling Freddie Mac (FRE)? Given this week's bankruptcy filing by CIT, which will probably lead to the loss of $2.3 billion in taxpayer money, Fannie Mae's request for another $15 billion will strike many as throwing more good money after bad.

Fannie Mae had previously posted second-quarter losses of $14.8 billion, on top of $23.2 billion of red ink in the first quarter, leading Morningstar equity analyst Matthew Warren to write in a report: "Nothing fundamentally has changed with the situation at Fannie Mae, and we remain quite certain that the equity shares are worthless barring a ridiculous public policy decision on the part of the U.S. government."

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Wall Street gets it all: Bailouts, bonuses, first dibs on H1N1 vaccine

By Peter Cohan | Nov 6th 2009, 3:00PM EST Filed Under: Company News, Economy, Healthcare

$\wall-street-gets-billions-and-first-dibs-on-H1N1-vaccine$ When it comes to allocating scarce public resources, large corporations seem to have the upper hand in the US. We already know that many powerful companies, particularly the Wall Street investment banks, having gotten plenty of Washington cash. Now it looks like they're getting first dibs on the scarce H1N1 vaccine as well.

If I remember correctly, last fall the problems with the financial sector nearly cratered the global economy -- what with the $30 trillion in lost stock market value and over a trillion dollars in bank write-offs. As I've written before, Wall Street accounts for 0.057 percent of our population, but because it has given $5 billion to Washington politicians and lobbyists over the last decade, the government poured trillions of dollars into bailing it out after its little collapse last year.

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Gold futures top $1,100, oil prices sink on economic worries

By AP | Nov 6th 2009, 2:31PM EST Filed Under: Energy, Economy

New York gold futures topped $1,100 an ounce for the first time ever as investors continued to funnel funds into safe-haven gold amid the slumping world economy.

Most-active gold for December delivery on the New York Mercantile Exchange's Comex division reached the $1,100 mark about one year and eight months after it topped $1,000 for the first time in March 2008.

The benchmark contract posted a new closing record of $1,089.30 the previous day, ending higher for four days in a row.

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Apple really needs a better iPhone answer to Google Navigation killer app

By Alex Salkever | Nov 6th 2009, 1:30PM EST Filed Under: Technology, Investing, Google , Research In Motion, Apple, AT&T, Verizon

apple-really-needs-better-iphone-answer-to-google-navigation-killer-app

Lots of people claim that Apple's (AAPL) iPhone is the first smartphone to really unleash the potential of the Internet on a handset. And they are right. iPhone users suck up so much more Web time than Blackberry (RIMM) users (even though far more Blackberry units have been sold over time) that Apple partner AT&T (T) has struggled to handle the load and, by many indications, still can't keep up. But let's not forget that the iPhone's Web utility was not the only killer app in the mobile devices space.

Long before the iPhone hit it big, the GPS market was hockey-sticking. I watched this trajectory with amazement as Garmin (GRMN) devices went from geek gawkware to standard hardware for housewives in the O.C. and salesmen cruising the office parks of middle America looking...

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FCC's Steve Waldman: Point man for fixing the news business

By Jeff Bercovici | Nov 6th 2009, 1:00PM EST Filed Under: People, Media

Imagine being asked to solve a problem so difficult that the smartest people you know have been trying to figure it out for months, even years, without getting anywhere. Now imagine doing it with one metaphorical hand tied behind your back.

That gives you an idea of the challenge Steven Waldman faces in his new job as the Federal Communications Commission's designated deep thinker on the future of media. As a special adviser to Chairman Julius Genachowski, Waldman will be asked to assess the health of the news business and come up with recommendations for improving it -- without exceeding the agency's relatively narrow charter.

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