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