Download now: The Downfall of Cable, and the Rise of 5G!

But Baby, I Can't Find No Job

Money Goes Where It's Wanted

Written by Christian DeHaemer
Posted September 22, 2010

There are one hundred men seeking security to one able man who is willing to risk his fortune.
— J. Paul Getty

It looks like we are two years into — and out of — the recession, and the job numbers just aren’t showing much improvement in the U.S.

The unemployment rate for July came in at 9.5%.

According to the Labor Department, private employers added a net total of only 71,000 jobs in July — far below the 200,000 or more jobs needed each month to reduce the unemployment rate.

A new report out today says that unemployment stands at 9.6%, while rates in some states like Nevada, Michigan, and California are higher than 12%.

All private workers

Here is a handy chart from the Bureau of Labor Statistics which shows total private employment (in thousands):

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2000

110210

110303

110641

110858

110738

110952

111135

111168

111392

111373

111587

111681

2001

111634

111624

111555

111227

111146

110910

110737

110544

110276

109918

109575

109368

2002

109214

109054

108989

108892

108814

108824

108732

108671

108659

108772

108758

108595

2003

108640

108484

108286

108252

108274

108233

108231

108266

108421

108570

108611

108724

2004

108882

108913

109213

109437

109747

109841

109883

109984

110135

110465

110493

110624

2005

110718

110949

111095

111441

111583

111847

112122

112311

112392

112492

112796

112934

2006

113232

113531

113803

113956

113988

114065

114223

114344

114401

114428

114616

114785

2007

114971

115050

115263

115328

115455

115497

115512

115403

115389

115454

115551

115574

2008

115562

115477

115419

115258

115005

114775

114518

114171

113715

113168

112434

111767

2009

110961

110254

109510

108861

108527

108075

107778

107563

107377

107115

107190

107107

2010

107123

107185

107343

107584

107635

107696

107803(P)

107870(P)

 

 

 

 

P: preliminary


It shows the boom in the late 1990s, the dot-com bust, followed by the housing boom starting in 2004, and the current bust... which seems to be ending in slow motion.

Now here are the numbers for government employees (in thousands):

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2000

20571

20599

20733

20802

21147

20887

20867

20837

20735

20743

20760

20804

2001

20835

20906

20945

20992

21029

21137

21185

21218

21242

21275

21326

21355

2002

21377

21390

21431

21443

21514

21549

21544

21589

21546

21559

21581

21588

2003

21626

21624

21610

21595

21567

21606

21633

21556

21504

21558

21535

21546

2004

21538

21550

21588

21614

21614

21601

21606

21626

21635

21656

21692

21693

2005

21735

21744

21740

21754

21781

21763

21857

21863

21845

21829

21859

21879

2006

21843

21870

21902

21923

21922

21914

21988

22008

22051

22067

22080

22088

2007

22096

22121

22147

22174

22196

22209

22174

22212

22278

22299

22330

22377

2008

22379

22414

22439

22451

22473

22510

22557

22570

22568

22561

22567

22561

2009

22588

22569

22560

22681(C)

22628(C)

22565(C)

22516(C)

22519

22480

22518

22507

22481

2010

22479

22456

22506

22578

22959

22723

22562(P)

22441(P)

 

 

 

 

C: corrected
P: preliminary


You will notice a relentless climb in government workers over the past ten years.

The only slight dip is in November and December of 2009, and in July and August of this year.

This is a classic example of misallocation of resources.

And it reinforces my belief that in order to make money, you can’t invest in the United States...

The U.S. just spent $800 billion dollars on a stimulus package; the vast majority of this money went to the States in order to prop up their bloated bureaucracy.

It avoided service cuts for exactly one year and created a mountain of IOUs...

All it stimulated was debt.

This is money taken from the pockets of potential capitalists — who, as John Paul Getty quoted above, know how to take risks.

It's put in the hands of those who, by definition, sold their freedom for a union job and a desk at the State House.

The U.S. is on the same trajectory as Venezuela, where 55% of the population works for the government. They just vote for their own meal ticket while the smart and the rich flee.

I'm going back to Cali — hmm... I don't think so

The immortal words of LL Cool J are called to mind...

But companies aren't going to Cali. In fact they are leaving as fast as they can.

More than 100 large and mid-sized companies are leaving California for fewer taxes and less regulation in neighboring Utah and Nevada. These companies include eBay, Adobe, Buck Knives, American Racing, Yahoo!, and EA Games.

This is no small thing, and it will impact the Golden State for years to come.

Oil ban unemployment

As I write this, oil companies are packing up their rigs and heading to Africa due to Obama's across-the-board moratorium on oil drilling in the Gulf of Mexico.

The Wall Street Journal reports:

Numerous operators told U.S Interior Secretary, Ken Salazar that they were in the final stages of moving rigs, deepwater rigs out of the Gulf of Mexico and to West Africa and the Middle East.

The current rate for a floating drill ship is $417,495.05 a day, which is a lot cheaper than it was a two years ago....

But it's not the type of money you want to eat on a daily basis for six months — especially since there is no guarantee that the ban will be lifted.

Later, Uncle Sam

Money goes where it is treated the best. And that's not the United States. Not anymore...

A poll by Bloomberg this week says, “The U.S. has fallen behind emerging markets in Brazil, China and India as the preferred place to invest.”

I would take it a step further and go beyond the standard BRIC countries that we've been hearing about for the past ten years.

Don't get me wrong; there is plenty of money to be made in today’s world.

And you can grab your fair share.

I’m looking at some interesting equities in the Middle East that trade on the New York Stock Exchange. I found a sweet undervalued oil explorer with a major find off the coast of Guyana that could be my next 905% winner.

That's all for now — I've got to catch a train to New York City. 

Just remember, when you punish money... it goes away.

Have a good one,

Christian DeHaemer
Wealth Daily

~~ad_0~~

Buffett's Envy: 50% Annual Returns, Guaranteed