From The Business Insider, Dec. 4, 2009:

Analysts were looking for unemployment to hold steady at 10.2%, so this is way better than expected.

And job losses were expected at -125,000, but the economy only shed 11,000.

This is a great number.

Past months were also revised higher.

And the average work week of 33.2 hours is up from the all-time low of 33.0.

Stocks, the dollar, and interest rates are all up. This could be the end of cheap money!

Here's the full announcement from the Department of Labor

------

The unemployment rate edged down to 10.0 percent in November, and nonfarm
payroll employment was essentially unchanged (-11,000), the U.S. Bureau of
Labor Statistics reported today. In the prior 3 months, payroll job losses
had averaged 135,000 a month. In November, employment fell in construction,
manufacturing, and information, while temporary help services and health care
added jobs.

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More coverage from The Business Insider:

• JP Morgan: 10.4% unemployment coming this Friday

Brian Wesbury, chief economist at First Trust, is a free-market capitalist all the way.

"I believe that the government actually caused our crisis," says Wesbury. "It wasn't capitalism that failed. It was government that failed." 

Wesbury, author of "It's Not as Bad as You Think: Why Capitalism Trumps Fear and the Economy Will Thrive", points to two main culprits:

• Mark-to-market accounting: A 2006 rule requiring banks to value assets at current spot market (vs. computer-model) prices triggered an unnecessary panic and turned the banking problem into a full blown catastrophe, Wesbury declares. At its onset, the current banking crisis was much smaller than the S&L of the 1980s as a percent of GDP, he adds.
• Near-zero interest rates: With money seemingly free, of course consumers and investors alike jumped into a buying frenzy.

But wait. Keynesians will note that free-market supporters had full reign during the Reagan, Clinton and Bush administrations. And look where that got us...

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But don't tell that to Brian Wesbury, First Trust's often-optimistic chief economist and author of It's Not as Bad as You Think.

"I believe the recovery is well underway [and] it's V-shaped," Wesbury says. "The trend is very clear: it's up, not down and I don't think we're about to level off or anything like that. I think we're floating on a sea of liquidity and it's going to continue."

Wesbury even believes the recovery -- which so far has mainly been evident in the financial markets -- is "coming toward Main Street [and] already on its way," citing recent improvements in auto sales, weekly jobless claims and retail sales. (He attributed November's disappointing same-store sales results to the notoriously volatile nature of retail.)

Speaking ahead of Friday's November jobs report, the economist predicts...

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The White House, desperate to lower the 10.2% unemployment rate, is looking for any and all ideas to help get Americans back to work.  Not only is President Obama using his jobs summit to listen to some of the country's brightest business leaders, he's also encouraging suggestions from average Americans.

PR stunt or not, Brian Wesbury, chief economist at First Trust, is taking him up on his offer.  His simple advice:  Less is more.

Wesbury, an opponent of Keynesian economics, tells Aaron the government "should be doing more to create jobs but the way you do that is you shrink the size of the government."

Excessive deficit spending makes Wesbury's favored idea for boosting jobs - cutting taxes - a near impossibility.  And, unlike Nobel Laureate Paul Krugman, the economist firmly believes a second stimulus and more government works programs prohibit private sector growth.

Programs like Cash for Clunkers may help boosts sales and save some auto jobs in the near term but "there's no free lunch," Wesbury reminds us. Edmunds.com has calculated taxpayers paid $24,000 for every car sold.

Wesbury also says the uncertainty over health care reform is also hindering job creation. "How do small businesses increase the amount of jobs when they have so much uncertainty about the future?," he asks. 

"You are the definition of a moral hazard," Sen. Jim Bunning (R, Ky.) told Bernanke. "I will do everything I can to stop your nomination and drag out this process as long as I can."

But the Fed chairman has the support of Senate Banking Committee Chairman Christopher Dodd (D, Conn.) and is widely expected to win reappointment.

That would be a mistake, according to Brian Wesbury, chief economist at First Trust and author of It's Not as Bad as You Think.

"If I were a Senator I would vote not to reconfirm Ben Bernanke," Wesbury says. "And it really isn't necessarily about what's gone on in the past six months but literally what's gone on in the past 6 or 7 years."

Like many, Wesbury says Bernanke must share some of the blame for the Fed's ultra-easy monetary policies that followed 9/11 and the bursting of the tech bubble...

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Worries about debt levels were renewed this week following Dubai's debt crisis. And MF Global pulled a $250 million, 10-year bond deal. A year after Lehman's collapse and the credit crisis, it's hard not to wonder whether this is the beginning of another leg down.

"You're starting to get concerns about sovereign debt," says our guest Greg Zuckerman, senior writer for The Wall Street Journal. "'All the debt that's piled up by nations around the globe, we've shoveled money at almost every kind of problem out there," says Zuckerman, also author of a new book, "The Greatest Trade Ever", that chronicles billionaire investor John Paulson's winning wager against the housing market and financial companies.

A year since the global credit meltdown, investors have waded back into corporate debt and junk bonds. "This rally could go on a little longer so you don't want to get too nervous," says Zuckerman, summarizing his sources.

Performance anxiety. Beyond the credit markets, what's notable and worrisome is the growing herd mentality on Wall Street, Zuckerman says...

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While Wall Street was in ruin last year, John Paulson was laughing all the way to the bank thanks to his $20 billion bet against subprime and banks. Almost instantly, Paulson, who was something of a Wall Street unknown, became one of the richest men in hedge fund history.

Today, he continues to bet big. However, in a strategy shift he's actually buying banks now. Paulson this year has bought a significant stake in banks, including Bank of America, which he expects to nearly double by 2011, as well as Citigroup.

Paulson's other big gamble is less contrarian than those in the recent past. Even with gold reaching new highs on a daily basis, Paulson plans to open a gold fund in January 2010 and invest up to $250 million of his own fortune in it, as detailed in a recent Wall Street Journal article.

Already a major shareholder in miners AngloGold Ashanti and Kinross Gold, Paulson thinks there's plenty more money to be made in gold, according to our guest Gregory Zuckerman, author of “The Greatest Trade Ever”.

Zuckerman notes two primary reasons for Paulson's confidence in the trade...

In The Greatest Trade Ever, Wall Street Journal columnist Gregory Zuckerman details how Paulson pocketed $6 billion as his firm made $20 billion betting against the boom from mid-2006 through early 2009.

These returns included $4 billion for Paulson personally in 2007, which Zuckerman describes as the single-most lucrative payout in history.

While few, if any, will ever approach Paulson's staggering accumulation of wealth, Zuckerman says there are some timeless lessons for the rest of us, including:

Have the courage of your convictions: Paulson stuck by his thesis even as the trades didn't initially pay off in 2006, myriad housing "experts" told him he was on the road to ruin, and seemingly all of Wall Street's machinery was working against him. And when the bets starting paying off in 2007, Paulson didn't book profits and run as many advised -- and some clients begged. After shorting subprime in 2007, Paulson effectively doubled down in 2008, shifting some of his firepower to bets against Fannie Mae, Freddie Mac and Wall Street firms knee-deep in the MBS market.

See the forest for the trees: As an outsider to the mortgage world, Paulson was able to see the carnage coming that those on the inside missed. The ability to think independently and see beyond what the "experts" are saying is critical for individual investors because more financial bubbles are likely, Zuckerman says.

Hindsight being 20-20...

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Bankruptcy may prove to be the best thing that's happened to General Motors in a long time. After years of losing market share and money, it looks like the restructured board is finally taking control of this tarnished American icon.

Out is Fritz Henderson as CEO. According to Bloomberg, the career GM man didn't make the cut after the board's 100-day review. The board, led by Chairman and now interim CEO Ed Whitacre, apparently had seen enough, after deals to sell the Saturn and Opel brands fell apart, and plans to sell Saab stalled, all on Henderson's watch.

General Motors still has plenty of issues to contend with but at least the status quo of watching the ship sink while the band plays on looks to be a thing of the past.

Whitacre says the job of finding a replacement "begins immediately." Unfortunately, replacing the CEO won't be as easy as ousting him. Just ask Bank of America.

As Henry and Aaron discuss in this clip, there are many parallels between these two fallen giants...

The DOW hit a new 2009 high yesterday, continuing to defy those who have been predicting collapse since the lows in March.

The market's charge has brought the asset management business back to life--many hedge funds and mutual funds will make a killing again this year--but it has also created a major headache for fund managers.

Why?

Because in the fund management business, you get fired for missing rallies just as fast as you get fired for losing clients' money.

This "career risk" is causing fund managers to pile into the market even as valuations and history suggest a major correction may be looming.

Earlier this week, John Hussman of the Hussman Funds said he sees an 80% chance of a major market crash over the next year--a startling prediction for a fund manager who normally goes to great lengths to hedge his bets.

Morgan Stanley is arguing that the fun is over and that the next few years will see the market move sideways at best. SocGen, meanwhile, continues to predict global economic collapse.

In other words, the market is still climbing the "wall of worry." For the sake of investors who are just beginning to get their confidence back after getting clobbered for two years, let's hope it continues to do so.

See SocGen's logic about the global economic collapse.

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