Stephen Roach, Asia chairman of Morgan Stanley commented the unemployment data and the prospects for the US economy:
"The official unemployment rate at 9.7 percent is distorted downwards by at least 3 million people who have simply given up looking for work and who have effectively taken themselves out of the work force for economic reasons. For some bizarre reason, the statisticians do not count these poor souls as unemployed. If you add them back in, the unemployment rate isn't 9.7 percent. It's 11.5 percent"
Stephen Roach cautioned investors that hiring may not come that quickly as businesses are still nervous about demand prospects:
"The idea that we can get some spontaneous revival in employment and capex when the consumer is under serious trouble, to me, is really missing a key analytical point to take away from this tough post-crisis climate."
Roach pointed out that the american consumer is still in trouble and we could even be looking for a double dip in the economy with a 40 percent chance:
"The American consumer is in serious trouble given the unemployment, the debt, the low savings, and the lack of income growth. That's a key reason to look for a double-dip. The demand side is going to be very impaired by the U.S. consumer and there's no other consumer that is going to fill the void"
Related ETF`s: SPDR SP 500 (ETF) (SPY), ProShares UltraShort SP500 (ETF) (SDS)
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