When you've been working the markets as long as I have, you learn that the biggest dangers are always found in a place just over the horizon.
It's why I spend my time hunting for stories, news items and opinions that in the old days were considered far "below the fold."
Invariably, what I am looking for is the stuff that everybody else has missed.
Because I believe that's where the real information is -- especially when it comes to uncovering profitable opportunities others don't yet see or understand.
It's the story behind the story that interests me. To find it, you need to go beyond the headline news.
In that spirit, here's my take on five things that I'm thinking about right now.
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Why the Eurozone Debt Crisis Never Really Went Away
How many times have we been told the Eurozone debt crisis is resolved, only to have it turn up again like a bad penny?
Last year's string of good news/ bad news on the Eurozone debt crisis had the markets going up and down like a yo-yo until the routine grew so tiresome that most people stopped paying attention.
But while the crisis faded into the background, it never really went way.
Remedies that were sold as solutions haven't solved a thing.
The celebrated bailouts of countries like Portugal, Ireland, and especially Greece have served mainly to postpone real solutions that would be far more painful.
"The Eurozone politicians in their infinite wisdom have concluded that it is easier to prolong the agony than to take their medicine," said Money Morning Chief Investment strategist Keith Fitz-Gerald.
In fact, the Eurozone debt crisis is getting worse.
Collective debt among the 17 member nations is on the rise, having increased from 85.3% of GDP (gross domestic product) in 2010 to 87.2% last year. That's the highest level in the history of the Eurozone.
Unemployment in the Eurozone rose in March to 10.9%, up from 10.8% in February and 9.9% a year ago. Manufacturing also declined last month, as new orders fell for the 11th month in a row.
And the austerity imposed on the troubled PIIGS (Portugal, Ireland, Italy, Greece and Spain) to bring their budget deficits and debts under control have actually made the situation worse.
"It's done no good at all," Fitz-Gerald said of the Eurozone's efforts to deal with the debt crisis. "It's an absolute travesty."
The steep and sudden cuts in spending are pushing most of Europe back into a recession, which will eventually be felt here at home.
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The March Employment Report: Here's the Real Story with the U.S. Unemployment Rate
Fewer workers are marching in the unemployment line, but the March employment report shows that many are not yet returning to work.
U.S. employers added 120,000 jobs in March, pushing the U.S. unemployment rate down to 8.2%, the Labor Department reported today (Friday). Economists were looking for 210,000 jobs to be added in March, and the unemployment rate to stay at 8.3% as more discouraged workers reentered the job market.
Most market participants will have to wait until Monday to react to the disappointing numbers as exchanges are closed in observance of the Good Friday holiday. However, the bond market is open in a shortened trading session, and the Dow futures tumbled some 111 points following the release.
The less than stellar March employment report conflicts with several recent private surveys that show the economy is improving.
The March Employment Report Numbers
In the previous month, employers added 227,000, slightly more than expected. February capped the best six-month streak for job additions since the height of the financial crisis in 2008.
Michael Erwin of CareerBuilder recently told ABC News, "Thirty percent of employers we spoke to say they plan to hire full-time positions in the second quarter." That compares with 24% in the last survey three months ago.
Erwin added, "The numbers are going back to where they were pre-recession so that's good news employers are back to the table, they're looking to hire."
Jobless claims are now down to their lowest level in four years, after falling to 357,000 in the final week of March, the Labor Department said Thursday in advance of the monthly jobs report.
While the decline in unemployment insurance claims is good news, it does not tell the whole story.
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Five Savvy Ways to Conquer the Wall of Worry
If you like extreme risk and consider living on the edge to be "normal," today's column isn't for you.
Today I'm writing to the millions of investors who are completely terrified by the prospect of what's next and who simply want their faith restored - not to mention their investments.
To all of them I would say: You are not alone and you're not wrong to be apprehensive.
Our political situation is an embarrassing train wreck, our national debt looks like a one way trip to financial hell, housing remains in the dungeon, unemployment is unacceptably high and Europe...oh Europe.
It's nothing short of a gigantic wall of worry.
Plus, there have been so many attempts to "fix" things that I've lost count. Throwing good money after bad is a fool's game and one that will have very real and inevitable consequences.
So what should investors do?
The Fed's War on CapitalismHere's how I see things. The "Whitewash Ministry" has basically five options:
Even though both would be the proper way for free markets to bleed out the excesses of the past, they are essentially political nukes and nobody has the willpower to touch either one of them.
The third, austerity, is being tried but only halfheartedly. Our leaders have no idea what this actually means. Since they remain completely unaccountable, there is no true incentive.
Besides, large numbers of people have figured out it's easier to be on the dole than it is to actually work, so this is another disincentive for meaningful cuts in spending.
As for inflation, this too is officially a non-starter as long as interest rates are held near zero. Unofficially, it's a different story. Most investors I know are feeling the heat of 12% to 15% a year in their wallets.
That leaves option number one - repression.
You can call it what you want, but repression is really a fancy way of saying that our government is conducting punitive monetary policy.
While they mouth off about how they want to create jobs and take care of the middle class, in reality they're eviscerating it.
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If You're Out of Work Blame Your Cell Phone
Times are tough out there.
We would like to blame China, incompetent politicians, Federal Reserve Chairman Ben Bernanke, the banking system, or some unseen forces for this phenomenon.
But in reality, the answer is no further than our pockets. The real culprit is your cell phone.
The arrival of these gadgets changed everything...
That's because before the cell phone boom, it was very difficult to run an efficient international outsourcing operation. Until then, there were no means of communicating between different offices other than fax, telex, and the balky international telephone system.
Consequently, these communication barriers made manufacturing products overseas cumbersome and expensive.
And since there were relatively few outsourcing operations at the time, there was also an acute shortage of skilled employees in poor countries, making a difficult situation even worse.
As for competition, there wasn't much. That meant the jobs of workers in rich countries were still relatively secure.
But not for long.
Starting in 1995, the Internet and the modern telecommunications revolution changed everything.
The Race to the BottomSuddenly, these same barriers began to come down. The job market was changed forever.
Now it was possible to communicate on a real-time basis with factory or service operations in poor countries all across the globe. Outsourcing had been born.
At about the same time, the retail behemoth Wal-Mart Stores Inc. (NYSE: WMT) discovered a China and the price advantage it could gain by manufacturing goods overseas. Wal-Mart's new world began to take shape.
Goods could now be designed by Wal-Mart, made to Wal-Mart's specifications and delivered to Wal-Mart stores in just a few weeks, enabling the retail giant to keep up with trends in fast-moving markets.
The rest, as they say, is history.
There was only one problem. This sea of change wasn't self-limiting.
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High Unemployment Means More Job-Killing Taxes
The unemployment problem in this country has gotten so bad it's starting to sustain itself.
Essentially, high rates of unemployment have led to tax increases that are further suppressing hiring - thus making an already-ugly unemployment problem even worse.
That's bad news for thousands of prospective employers and millions of Americans.
Paying for the UnemployedSept. 30 was the deadline for states to pay more than $1 billion in interest payments for loans used to cover unemployment benefits. It was the first time since the start of the economic downturn that states had to pay interest on federal borrowing.
And many states were forced to raise unemployment taxes to cope with the extra burden.
Employers in 2010 paid 27.8% more in state jobless taxes than they did in 2009. Employers in 24 states will have to pay between $21 and $63 more per employee following another tax hike in January 2012.
"Unemployment taxes, which were a relatively low bottom-line cost in 2008, are now becoming a significant cost," Doug Holmes, president of UWC - Strategic Services on Unemployment & Workers' Compensation, told CNNMoney. "It discourages companies from electing to hire new employees."
The extra expenses hit small businesses especially hard.
"We try not to hire because we will be socked by a bigger tax bill for unemployment insurance," Margery Keskin, an executive at four small construction-related companies in New York, told CNNMoney. Keskin said she's had to take money from bonuses and profit-sharing plans to pay higher unemployment taxes.
Job Cuts AheadThese additional costs are just the latest obstacles hitting the dismal U.S. jobs environment. While businesses are already uninterested in hiring new workers, the added expenses paired with the weak economic outlook will lead some companies to trim their workforce.
A quarterly survey released last week by the Business Roundtable found 24% of chief executive officers (CEOs) expect to cut U.S. jobs over the next six months, up from 11% in the second quarter.
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Stock Market Bulls Have Bears on the Run Despite Poor Unemployment Report
Stocks survived a big test of the winter rally on Friday as they finished a positive week with mild losses.
The Friday session featured a report on non-farm payrolls that came in worse than expected, but not egregiously so. Energy, industrials and utilities fared the best, while financials and telecoms slipped the most. Treasuries blew higher across the board, showing again why we always say that the bonds love misery.
Earlier in the week, I forecast that a disappointing payroll number and a modestly negative reaction would be the best possible result for bulls for three reasons: a) it maintains pressure on the Federal Reserve to keep interest rates low and to continue buying assets; b) it keeps pressure on the new Congress to keep up the pace of fiscal spending; and c) it provides a mildly oversold technical condition that provides a better base from which to rally later in the month.
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No Rest for the Weary: Unemployment to Remain High Through 2011 and Beyond
Stocks are up nearly 70% from their bear market lows. Corporate profits are rising. And the economy is expanding. Yet the unemployment rate continues to hover around 10%.
Neither President Barack Obama's $787 billion stimulus program, nor the U.S. Federal Reserve's quantitative easing has generated enough good news to convince companies to hire meaningful numbers of new workers.
Of the 8.7 million people who lost their jobs during the recession, more than 7.3 million are still without work. There are still nearly five job seekers for every job opening. In fact, adding in workers who are working part time but looking for full-time work and those who have given up looking all together brings the "real" unemployment rate to a staggering 17% compared to 16.5% last year, the latest government report shows.