WTO Director General Pascal Lamy, told Reuters Television:

That’s the situation and I’m afraid I can’t read any good news in my trade numbers.

This news doesn’t bode well for any type of recovery. “Jobs picture turns gloomier” say the headlines. The U.S. unemployment rate officially popped up to 9.5% as nonfarm payrolls shed 467,000 jobs in June. The market is tanking today on this “brown shoot”… But the real story is far worse. And as reality seeps into the empty head of Joe Investor it could spell the end for the post-2008 wipe-out sucker’s rally…

As James Davidson points out in Crisis Strategy Alert, the BLS numbers have been massaged, manipulated, and contorted into giving only half the story. He says,

To get a real picture of the current unemployment levels you need to focus on the grossly underreported U-6 data set known as “alternative measures of labor utilization.” The U-6 data set includes everyone counted in U-3, plus “all marginally attached workers” and people who aren’t working full-time but wish they were (i.e., the underemployed). (Marginally employed covers “persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past.)

When you add up U-3 and all the underutilized workers, the official U-6 rate for May 2009 is 16.4%. In other words, the employment picture is twice as bad 14 months after the recent peak as it was in December 1930, 18 months after the peak prior to the Great Depression.

But this surge in people lining up for welfare isn’t limited to the US either. According to the BBC, unemployment in the eurozone also jumped to 9.5%.  Leading the charge is Spain with 18.7% unemployment, while the liberal Dutch are experiencing a mere 3.2%.  Martin van Vliet an economist at ING on the new numbers:

May’s sharp increase in eurozone unemployment demonstrates that the ‘green shoots of recovery’ are not yet showing up in the labour market.

Ireland looks like the next eurozone nation to bite the dust. Our Irish editor, Chris Hunter, is taking holiday in Dublin right now.  In an ode to his arrival, Moody’s slashed Ireland’s debt rating from AAA to AA1.  Dietmar Hornung of Moody’s Sovereign Risk Group had this to say in news release:

The pronounced weakness in the economic activity has been translating into a severe deterioration of Ireland’s public finances, and the country is set to emerge from the current economic crisis with a considerably higher debt burden for the foreseeable future.

Moody’s is the last large agency to cut Ireland’s credit rating.  Fitch and Standard & Poors cut it earlier this year citing soaring public debt and a negative economic outlook.  As Irish GDP continues to contract, we expect further cuts in Ireland’s bleak future.

Yes dear reader the next leg down in this Greater Depression is not far off. The textbook sucker’s rally is losing steam. Take profits and buckle up because the second half of this year could test the March lows. If that were to happen, or even anything close it would be devastating to investor sentiment. Most “investors” have never seen a prolonged bear market, they wouldn’t recognize it or know what to do.  But one thing they will do is flee to cash.

In the short-term, we here are Notes are bullish on the dollar for this reason. Long-term of course we think the buck is doomed. But woe to those who go against the dollar too early. We think that James Davidson is doing all the right things to capture short-term dollar strength while hedging against long-term weakness with the Crisis Strategy Alert portfolio, click here to learn more about what he’s doing…

The U.S. trade deficit grew to $57.2 billion in October, a 1.1% increase from $56.5 billion in September. Imports fell 1.3% to $208.9 billion, but exports fell even further, dropping 2.2% to $151.7 billion – the lowest level since January.

On reason for the reason for the larger deficit was more lopsided trade with China. The trade gap with China increased to a record $28 billion, up from $27.8 billion in September. China last year supplanted Canada as the largest source U.S. imports. Since joining the World Trade Organization in 2001, China has also emerged as the fastest growing major export market for U.S. products.

A record amount of oil imports also sent the deficit soaring, offsetting a significant decline in crude prices. Petroleum import prices fell 25.8%, with the average price for a barrel of crude tumbling by $15.56 a barrel to $92.02. However, that decline was negated by a record-high 70.9 million-barrel increase in oil imports. The sheer increase in the volume of imports drove the U.S. oil bill up by 3% to $37.7 billion.

Trade was also dampened by a resurgent dollar, which made U.S. products more expensive to foreign markets. The dollar surged 17% from mid-July to the end of November, reaching its highest level in three years on Nov. 21, Bloomberg reported.

“Trade is going to be a significant drag on fourth-quarter growth,” Dean Maki, co-head of U.S. economic research at Barclays Capital Inc., told Bloomberg. “The slowdown in foreign demand is hitting manufacturing.”

Trade added 1.1 percentage points to U.S. economic growth in the third quarter, when gross domestic product (GDP) actually shrank by 0.5%.

Source: Trade Deficit Grows, Despite Record Decline in Oil Prices

• The World Trade Organization (WTO) has published a new draft of plans for a global trade deal that will be discussed the next time world trade ministers meet, BBC News reported. Although the plan doesn’t change existing tariff or subsidy cuts, it does offer some compromises and clarifies some key “sticking points.” Negotiators hope to have a deal closed by the end of the year.

• Battered by increasing steel costs and dampened consumer demand due to high gas prices, Ford Motor Co. (F) announced yesterday (Thursday) that it would not be able to meet Chief Executive Officer Alan Mulally’s goal of returning to profitability by 2009, Bloomberg News reported. North American vehicle production will be cut throughout the rest of this year due to “the rapidly changing business environment in the [United States],” a company statement read.

• First-time jobless claims fell 9,000 to 365,000, from a revised 374,000 the previous week, the Labor Department announced yesterday (Thursday), Bloomberg News reported. The decline was unexpected and indicates that companies are responding to the current U.S. economic slowdown by curtailing hiring, while trying to maintain current employees.

• Hong Kong’s Hang Seng index hit a one-month closing low yesterday (Thursday) in reaction to the declines in the U.S. markets. Oil firms Sinopec Shanghai Petrochemical Co. (ADR: SHI) and PetroChina Co. Ltd. (ADR: PTR) also weighed on the index. “Weak U.S. stocks and Beijing’s denial on an imminent deregulation of oil product prices hurt market sentiment,” Kenny Tang, associate director at Tung Tai Securities, told Reuters.

• Bookseller Barnes & Noble Inc. (BKS) yesterday (Thursday) reported a loss of $2.2 million, or 4 cents per share, for its fiscal first quarter ended May 3, compared with a loss of $1.67 million, or 3 cents per share, for the same period in the prior year, Reuters reported. Barnes & Noble reduced its full-year outlook based on the difficult economic environment and announced it would consider “the feasibility of a transaction” with rival Borders Group Inc. (BGP).

• The American Petroleum Institute, the trade group for major oil and natural gas companies, spent nearly $1.3 million in the first quarter to lobby on fuel economy standards, appropriations bills, and other issues, the Associated Pressreported. The API also lobbied on various pieces of legislation dealing with oil taxes and fees, renewable fuel standards, climate change, offshore drilling and more, according to the form posted online April 21 by the House clerk’s office.

• Bill Miller, portfolio manager at Legg Mason Capital Management, has not signed on to the Yahoo! Inc. (YHOO) investor coup being led by Carl Icahn. However, in an interview at a New York conference Wednesday, Miller, whose fund controls a 5.4% stake in Yahoo, said he wants Microsoft Corp. (MSFT) to reopen talks to buy Yahoo outright and not simply forge a joint venture. “It is a strategic imperative for Microsoft to change its position,” Miller told Reuters after speaking at the hedge fund conference.

• The International Energy Agency announced yesterday (Thursday) that it is studying depletion rates at about 400 oil fields in its first-ever study of world oil supply. The Paris-based group said the study, to be released in November, was prompted by concern about the volatility of world oil markets and uncertainty about supply levels.

• The spinal-products unit of medical-device maker Medtronic Inc. (MDT) will pay $75 million to settle accusations that it defrauded Medicare by telling doctors to bill in-hospital stay – even when a cheaper outpatient visit would have done the job, The New York Times and The Associated Press both reported. Originally, the accusations had been leveled against Kyphon Inc., which Medtronic spent $4.2 billion to buy in November.

Source: Global Investing Roundups: Friday, May 23rd, 2008

“We’re going to go right at OPEC,” she said. “They can no longer be a cartel, a monopoly that get together once every couple of months in some conference room in some plush place in the world, they decide how much oil they’re going to produce and what price they’re going to put it at,” she told a crowd at a firehouse in Merrillville, IN.

“That’s not a market. That’s a monopoly,” she said, saying she’d use anti-trust law and the World Trade Organization to take on OPEC.

The attack on OPEC and evil oil speculators is a powerful piece of posturing. But according to Doug Casey at CaseyResearch.com, Hill may not have such a high profile target for long, as analysts remain confused over the direction of oil.

This from Doug:

On the one hand, “It just doesn’t look like this market is getting ready to turn around and go down for a long term,” said Darin Newsom, of commodities information provider DTN. “The news in Iraq helps confirm there are still problems on the supply side.”

But on the other, “If the rally in the U.S. dollar index gains momentum and money begins to come out of crude oil, the bearish technical signal established this week could lead to a larger selloff ,” Newsom said.