Storm has passed? I don't think so....

I know I keep yapping on about the subject, but watching this rally in the US and Asia markets makes me laugh...

We can yab on about how the G20 is going to get together at their tea party and talk about resolving the financial crisis and maybe throw a bit more money at the big companies like GM, but at the end of the day, if you want a leading indicator to why we're going to keep heading down - you look at the job market...

The US yesterday reported its highest level of people applying for unemployment insurance.

Read the headlines on Bloomberg and other news sites and you'll start to see the problem coming:

- Investec headcount under scrutiny
- BT to slash 10000 jobs
- RBS to cut 3000 jobs by March 09
- If GM goes bankrupt - US unemployment would jump by 3%
- General Motors in South Africa slashes jobs
- SA Post Office (and SAA) cut jobs
- Chelsea football club has to sell players before it can buy new ones

Etc Etc... blah blah blah...

I watched Steven Koseff of Investec on TV presenting his company's interim results yesterday and I laughed when he said: "The eye of the storm has passed."

How in the world can the eye of the storm have passed when the companies are only just STARTING to announce their job cuts?!

The economics of it are simple - jobs are disappearing from the market and they are not being replaced. In the US consumers are drowing under 900 billion dollars of credit card debt alone. The situation in SA is nowhere near the same levels per creditor, but its big enough for the bankers to worry.

Those creditors who owe hundreds of millions on their credit cards, are the ones going out of jobs. When their cash flow disappears and they can't limp from month to month then what? They're certainly not going to be buying houses, using your banking infrastructure, credit bingeing, investing or any of the like.

Job losses are now a reality - the longer and deeper they go on for, the tougher things become.

Sorry - I can't believe that the storm has passed and we're anywhere near the bottom.