Nonfarm Payrolls Boost Stocks

Did you ever think the phrase "unemployment falls to 10% would elicit such enthusiasm?" Relatively speaking, the employment report was not too shabby, with the Labor Department reporting that nonfarm payrolls fell by only 11,000. That's practically an increase. Last month's number was also revised to an 111,000 drop. The unemployment rate edged slightly lower to 10% from 10.2% the prior month. See? Obama's jobs summit, begun just yesterday, is already working.

Assuming Mr. Bernanke gets to keep his job for another four years, an improvement in employment conditions should convince the Fed Chairman that it might be time to pull in the reigns on the quantitative easing. But then again, wouldn't it be nice to let the banks have yet another year of blockbuster profits so everyone on Wall Street can party like it's 2007 again? Certainly, that would be the easy thing to do. After all, easy has been the road that the Fed has chosen time and time again over the past few decades. Easy first, then worry about the mess from the blow-out later. Certainly, Chairman Bernanke had to take quite the beating yesterday from angry Senators who berated him for allowing the financial crisis to occur and then bailing out Wall Street, without taking any blame themselves for not enacting any regulation that might have enforced some discipline on a banking sector run-amok. And certainly his easy money predecessor Alan Greenspan never had to listen to this kind of garbage when he was in office. But it's a small price to pay to hold on to the coveted position of the man who controls the money supply in the US. No doubt Mr. Bernanke will be reconfirmed, but soon enough we are likely to learn that who we really need right now is Paul Volcker.