That is higher than economists had expected. However the number of jobs lost, while high, continues to be “less-bad.”  What does it all mean?  As someone who went through the unemployment process this year and who knows lots of other people in the same boat, consumers don’t spend when they aren’t employed. They also don’t spend as much if their friends and neighbors continue to get pink slips, because they fear they could be next.  I don’t want to make too much of today’s 9.7% figure. Since last December I have heard the smartest forecasters predict 10% unemployment.  So it some respects, the number is baked in the cake. But it is worth noting that unless Americans have jobs, they won’t be the world’s spenders. If we aren’t demanding products and services, who will?  Without that demand, how do you sustain a healthy economy?  -Mary

Ellen Hughes-Cromwick made the case for Ford to concentrate on the emerging markets of Brazil, Russia, India and China (the BRICs) almost a decade ago. Her forecast was right on. Ford, the only major U.S. automaker to make it through the recession without filing for bankruptcy, is fighting the good fight for market-share in the BRICs. In her lecture before a Global Interdependence Center audience, Hughes-Cromwick cautioned that investors need to treat the BRIC nations as separate entities with very different issues and needs. I spoke with her just before her lecture. Here a re-cap of that conversation. -Mary Caraccioli

Note: For more on the Global Interdependence Center visit their website: http://www.interdependence.org
I am a member and a big fan of the high quality programming they offer.

Enough with the search for green shoots. The Financial media is missing the point in its constant banter about green shoots. Yes there are green shoots, brown shoots, verdent pastures and drought-choked fields, but that isn’t the point. It is the landscape that has changed. You won’t see that shift if you are obsessed with a single shoot. Reporting on how the changed landscape affects the flow of commerce in different industries is the real story and the more beneficial one to anyone following the financial news. There are so many new twists and turns to navigate and to project – regulatory, geographical, sovereign, and economic, just to name a few.  Rules change here and elsewhere, economies are better some places than others, some businesses are loving the opportunities presented to them, others won’t exist next year.  Until the coverage dives just a little deeper — we won’t see the landscape for the shoots. – MC

The short answer today is yes. But the question will continue to resurface as the relationship between Taiwan and China continues to get more cozy. The newfound warmth has developed over the last 365 days, or the first year of Ma Ying-jeou’s Presidency.  The President of the Republic of China (Taiwan) declared during his inaugural address that there would be “no reunification, no independence, and no war”  during his term in office.  

Ma found some easy opportunities for cooperation with the  People’s Republic of China almost immediately.  Last August, just three months into his term, Time magazine wrote about the transformation,  ”Relations between Taiwan and China have arguably seen the most rapid advancement in the six-decade standoff between the two governments. Ma launched direct weekend charter flights between China and Taiwan for the first time, opened Taiwan to mainland Chinese tourists, eased restrictions on Taiwan investment in mainland China and approved measures that will allow mainland Chinese investors to buy Taiwan stocks.”

Emerson Niou of Duke University believes the U.S. still plays an important role in the region, not only for the security of Taiwan, but for Chinese diplomacy.  In a symposium at the Foreign Policy Research Institute, he suggested that China needs continued U.S. involvement in Taiwan. That relationship gives China a backdoor into Taiwan for diplomatic purposes, with the U.S. playing intermediary. He says the U.S. also needs the relationship, because it relies on China to play the same role with North Korea. China is the intermediary there.  

In the eight years before Ma took office, Washington’s goal was to prevent a serious meltdown or conflict.  Now the Obama administration has a new challenge. Shelley Rigger of Davidson College puts it this way, “Taipei has adopted a brand-new blueprint for its China policy, a blue print loaded with opportunity and risk. The U.S. needs to update its own approach to respond to the new situation Taipei is creating.” 

It is easy to for Americans to say, great let Taiwan go there own way now, after-all we have enough problems to deal with. But that would be a mistake. Economic power is shifting east, American need to be engaged, connected and a part of the future. This can happen even as relations thaw between Taipei and Beijing. 

If you would like to get in-depth insight on the Cross-Strait relationship, go to FPRI.org. It is a great resources. -Mary Caraccioli

Foreign Policy Research Institute Symposium on Cross-Strait Relations

If you think you are the smartest person in the room and you happen to work in finance, then you don’t want to see Chris Whalen walk in the door. Chris is one of the brightest minds on the street. He gets what has happened in the banking industry and saw much of it coming. Over a year ago I first discussed the meltdown at Bear Stearns with him. He spelled out just how ugly things could get. A year later, he is appalled with how badly the banking system clean up is going. In part one of my conversation with him he shoots back at the folks who say, let Goldman and others pay back the TARP money and go on their way. As you will hear, Chris says there are two components to the government bailout. The banks can’t pay back the equity until they do something else first. Take a look. -Mary Caraccioli

Barry Ritholtz is the CEO of Fusion IQ and prolific writer and blogger (The Big Picture Blog). Barry was one of the few pundits who didn’t buy into the “Golidlocks scenario” (the economy is just right) in 2007 and 2008. At the time that was the mantra on the street. He believes the current strategy of bailing out the banks is wrong. He believes the policies in play now demonstrate a division in the Obama administration. In part-one of my interview he tells me more about that and about what the Fed will have to do concerning interest rates in the months ahead.
Take a look and feel free to comment. Thanks. – Mary Caraccioli

Dr. William Poole, former President of the St. Louis Federal Reserve Bank and target of the famous Jim Cramer diatribe, told me he and others at the Fed absolutely didn’t see the banking crisis coming. He said, “I missed it.” In an unemotional and straightforward discussion he also didn’t rule out the Fed losing its regulatory responsibility for the banking industry. While he stopped short of actually calling for that, he did call for visibility from all regulators. In this interview he offered me his plan for fixing the banking crisis and it is not a call for sweeping regulation. Take a look. Do you agree with the plan? Feel free to comment. Thanks -Mary

With rash of hearings, bailouts, investigations and other such activities on Capital Hill, you may not have realized that legislation to help curb climate change is making its way through the U.S. House of Representatives. The U.S., following Europe’s lead, wants to put a price on pollution, particularly carbon dioxide. The hope is that making polluters pay for carbon emissions will encourage them to invest in cleaner energy.

Of course that is the simplified argument. The truth is there is a big expense tied to eliminating coal and other fossil fuels from our biggest polluters, the utility companies. Switching to clean alternatives, while desirable for many, is expensive and time consuming. The concern for consumers is that the energy companies will pass those costs on to us in the form of higher rates. More expensive energy is a tough pill to swallow for Americans already bruised by a tough recession and job losses.

Because of the Environmental Protection Agency’s declaration that carbon dioxide is a threat to human health, change is coming. Either the EPA will make the rules or Congress. That is why it pays to be an educated consumer on this matter. The more you know, the better the national debate.

There are two main proposals out there that could spare the consumer some of the pain. One is Cap-and-Trade, where by the amount of carbon pollution a business can emit is capped at a certain level. The companies that don’t have the technology to stay under the cap, can purchase permits to pay for their excess carbon emissions. The permits could be purchased on the open market from companies whose emissions fall below the carbon quota.

Are you still with me? The big question with Cap-and-Trade: does the U.S. government sell all of the permits at auction (raising over $1 billion in the process, or does it give some away for free to help the Utilities transition to cleaner energy and to prevent a huge run up in energy costs for consumers?

Another plan that has been getting some attention is a Cap-and-Dividend. In this scenario the consumers that do the most to lower their consumption would receive some of the cash (a dividend) collected by the sale of carbon permits. Some feel it is the best way to incentivize both consumers and business. Others find it a logistical nightmare to implement. There are other ideas out there, but right now, the traction is with Cap-and-Trade. You would do yourself a service by investigating the pros and cons of this policy so that you can be an informed voice as the debate gets louder. -Mary Caraccioli

Famed investor Jim Rogers explains why he sold his NYC (before real estate prices tumbled there) and moved his family to Singapore. He believes raising his children in Asia will give them the upper hand.

In Part 3 of Mary Caraccioli’s interview with Jim Rogers he talks about what opportunities he believes are out there for investors as a result of the banking crisis and recession.

Famed commodity investor Jim Rogers talks to Mary Caraccioli in late November 2008. This is part 1 of 5. Jim was bashing the government bank bailouts long before most critics. He has remained consistent in that criticism.

Famed commodity investor Jim Rogers talks to Mary Caraccioli in late November 2008. This is part 1 of 5. Jim was bashing the government bank bailouts long before most critics. He has remained consistent in that criticism. This is one of Mary’s most popular videos with over 10,000 views. Enjoy.

If you find yourself feeling this way too, then I feel your pain. But we both have to get over ourselves and get back out there. The best way to find a job is through other people. Networking. The law of averages says you should only spend about 10% of your time looking online or at job ads. If you want to improve your odds, you have got to do more than search the ads. An easy way to get started is by getting on to some of the social networking sites. Facebook and Linkedin are very easy to set up and good general starting points. Then move on to more industry/interest specific sites. Quick rule of thumb for social networking; share. You’ve got to be part of the community, not just take from it. If you are trying to get a job share the stuff that makes you a great hire and an interesting person, not the beer bong photos from the bachelor party. Think of it like this; don’t share anything you wouldn’t want in the headlines of the newspaper. Talking about your interests and asking/answering questions about personal and professional development is a great way to build a community. As wonderful as the Internet is for community building, there is nothing better than real human contact. Get involved with something you enjoy. It will get you out of the house and in touch with lots of people.

Two more tips. Create an elevator pitch about yourself. That is a quick 20 or 30-second description of what you have to offer the world (particularly the working world). Practice it many times before you use it on a stranger. A great book for honing this skill is Peggy Klaus’ BRAG! The Art of Tooting Your Own Horn Without Blowing It.

Getting that pitch together will help you with this last tip. Don’t be afraid to ask for help. Not everyone can or will help you, but you’d be surprised how many people are happy to lend a hand. You never know where that connection will lead. So share your story and your goals with anyone who will listen, they may be able to help. Be positive, be concise and be helpful to them too. – Mary Caraccioli

By Mary Caraccioli

If you don’t have time to sleep, then St. Petersburg in May is where you want to be. When you have 20 hours of daylight you can cram a lot into a day. Meetings with multinational executives, educators, entrepreneurs, a little site seeing, the ballet and a late dinner somehow all fit into one day. I was lucky enough to get assigned to Russia in May of 2008. The trip would count as the international residency portion of the MBA program I was in at Drexel University. Once the trip was announced, I knew what it would mean for me, double duty, as a student and a journalist. There was no way I could travel to what Churchill described as “a riddle wrapped in a mystery inside an enigma,” and not do a story on it. So before I packed a bag or researched the hotel, I worked the phones to find a Russian film crew.

The long days are actually called the White Nights in Russia. One of my 20-hour blocks of daylight was spent with Sasha and Sergei, a Russian film crew. Two fellow cohorts, Lt. Tim Alexander and Kevin Seifert volunteered to help me coordinate the shoot that would result in a half hour television show. From soldiers, to software gurus, to outspoken economists we found great interviews all around the city. By the 18^th hour some clear trends had emerged.

Commodities rule: Russia’s economy is built on the stuff you pull from the ground. Oil, natural gas and metals have created eye-popping wealth in Russia. Thoughtful observers in Russia believe the nation may have too much of a good thing. Economist Dr. Vadim Volkov told me “ it’s a paradox, if you have too much money you can also destroy the economy because it stimulates inflation because there is too much money, money supply and prices go up.” It is not just inflation that concerns Dr. Volkov, the quality of economic growth matters. If the only industries that flourish in Russia are commodities and related technologies, the nation’s long-term outlook will be bleak, a breadth of economic activity is needed to create a strong dynamic economy. It’s called a resource curse. The economist’s concern about the curse would play out even sooner than he imagined. The abundance of resources priced so richly in the spring and summer, would fall to earth in the fall and winter.

No angels: There is a new class of entrepreneurs working in the tech sector and they are concentrated in St. Petersburg. While their products and services and relationships with Europe are giving the Silicon Valley a run for its money, these companies are still treated like non-profits by the government. There is no angel or venture cash for them, only government grants and the revenue they generate on their own. The oil riches had made those grants plentiful. But as those funds dry up, many are concerned that investment in technology will also dissipate. There are other challenges for the tech sector. Small companies are feeling the squeeze of the infamous Russian bureaucracy. Nicolay Vasiliev, Sales Director at Prompt, a software company, told me “This is a difficult market due to the regulatory constraints… Every business needs to go through huge paperwork procedures. Larger companies can handle that. Smaller ones don’t have the budget or the know-how to fill out the scores of forms, nor do they know who to communicate with in the bureaucracy.”

Bigger is best: If an industry matters to Russia, and oil and gas matter, it must be a giant conglomerate with strong ties to the government. Gazprom is the poster child of big business in Russia. It is everywhere and its leaders have been interchangeable with the heads of government. President Medvedev was the former top boss at Gazprom and the former Prime Minister took his place, leaving a vacancy for Vladmir Putin to fill. The cozy relatonship is not an accident. Russia believes its national security (and as we found out this summer with the invasion of Georgia) and foreign policy are closely tied to its commodity resources.

Bubble alert: One of the clear indications that a bust in any market is eminent is the cocky self-assuredness you hear from the true believers, that nothing can bring down the current bull market. I heard it from tech investors in the 1990s, from house flippers a few years ago, and from a Russian stockbroker in May.

The bullishness for brokers like Alexander Dushkin was not for small tech start-ups; it was for the super-cap oil and gas conglomerates and the companies that serve them. When asked: Could stocks be in a bubble? – he laughed at the idea. “There is only one place for stocks to go,” he said. “And that is up.” He quickly reminded me of the famous line uttered by Gordon Gekko in the movie Wall Street. “Greed,” he said with his thick Russian accent, “is good.”

World Class Matters: While in St. Petersburg the Zenit St. Petersburg Soccer club won the UEFA (Union of European Football Associations) Cup Championship. Many of our LeBow contingent watched the win over Glasgow at local watering holes. It didn’t take long for us to make friends with locals who were quick to share their passion for the home team and a match well played. At the ballet a few nights later, the same buzz. The athletes and artists on stage were a source of great pride for Russians. The discipline of both the dancers and the soccer players took them to the level of world class. That was something so many Russians, whom I spent time with, appreciated and admired. They believe, as I do, that you can do anything if you are willing to do whatever it takes to make it happen. This trait, however, was more apparent with younger people, than with the older generation.

Relationships Matter More: Russia and the U.S. have an uneasy history but Russians and Americans have an uncommon bond. When we sit with each other we are forced to accept that our way is not the only way or even the best way. One of my cohorts spent hours with the head of the technology center of St. Petersburg. He walked away from the trip with a new friend and a potential business partner. Americans who want to do business with Russia need such partners. You cannot go it alone here. Professor Alexander Yanchevsky of the Vlerick Leuven Gent Management School told me “its difficult for Russians who know the culture and who are a part of the culture (to understand the business processes). For foreigners it is even more difficult to understand because of the local bureaucracy and the cultural differences. You definitely want a partner if you want to do business here.”

Nation’s such as Russia need to be visited, to be understood. Reading the history in books and the policy papers is not enough. Russia is a place where you have to feel the energy of the people to get a sense of where they are assigning their passion, enthusiasm and fear. What are they talking about in the cafes and in the taxicabs?

My time was spent with entrepreneurs, economists, stockbrokers and soccer fans. These Russians felt a sense of arrival. This, they felt, was their time. The entrepreneurs had embraced innovation and had disdain for their father’s bureaucracy. The economists feared that an over-abundance of wealth created by the vast oil and natural gas reserves, could be more dangerous than waiting in line for bread. The stockbroker believed bubbles never burst and the soccer fans believed in miracles and got one.

Moments are meant to be savored, because they pass. The Russia that I witnessed in May of 2008 has been rocked by the global recession. In a matter of months the strut of the oligarchs disappeared. A crash in prices of all asset classes, and most notably commodities has hit Russia very hard. I don’t know what has become of the stock broker, the technical hub is still there, but can the lucrative government grants continue with Oil at $40 a barrel, not $140 a barrel? A stable Russia is in America’s and Europe’s interests. As the globe weathers the economic storm, this is no time to turn away from Russia. It is an opportunity to work together and to bolster our relationship. – Mary Caraccioli