TOKYO (Reuters) - Okuma Group, the Asia-based investment boutique, says that the worse-than-expected US non-farm payrolls figures for May should not come as a surprise to anyone living in the real world reasoning that it was always just a matter of time before the effect of the massive stimulus thrown at the US economy by the government began to wear off.

According to the Labor Department figures, of the 431,000 jobs added in May, only 41,000 were created by the private sector with the remaining 390,000 being temporary workers hired by the government to conduct the 2010 census.

The “Okuma Group” analysts said that the jobs recovery to which so many commentators have pinned their hopes for the US economy is “a mirage” driven almost entirely by government spending. They warned that if future jobs data pointed to the development of a downward trend, the US government could resort to taking far more reckless and profligate measures to get the unemployed into work including further stimulus which could push America‘s fiscal deficit to dangerous levels and result in an EU-style debt crisis.

In response to the data, the Dow Jones Industrial Average plunged by over 300 points as investors became more concerned about the sustainability of the economic recovery.

“Okuma Group” said that unrelenting concerns about the European debt crisis added impetus to the falls since Europe is the destination for a significant percentage of US exports.

“Okuma Group” told clients to expect equities to return to the March 2009 lows.

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TOKYO (Reuters) - Okuma Group, the Asia-based investment boutique, says that the worse-than-expected US non-farm payrolls figures for May should not come as a surprise to anyone living in the real world reasoning that it was always just a matter of time before the effect of the massive stimulus thrown at the US economy by the government began to wear off.

According to the Labor Department figures, of the 431,000 jobs added in May, only 41,000 were created by the private sector with the remaining 390,000 being temporary workers hired by the government to conduct the 2010 census.

The “Okuma Group” analysts said that the jobs recovery to which so many commentators have pinned their hopes for the US economy is “a mirage” driven almost entirely by government spending. They warned that if future jobs data pointed to the development of a downward trend, the US government could resort to taking far more reckless and profligate measures to get the unemployed into work including further stimulus which could push America‘s fiscal deficit to dangerous levels and result in an EU-style debt crisis.

In response to the data, the Dow Jones Industrial Average plunged by over 300 points as investors became more concerned about the sustainability of the economic recovery.

“Okuma Group” said that unrelenting concerns about the European debt crisis added impetus to the falls since Europe is the destination for a significant percentage of US exports.

“Okuma Group” told clients to expect equities to return to the March 2009 lows.

The post Okuma Group: Is US Recovery Losing Steam? appeared first on 12 Press Release.

“Okuma Group”, the boutique brokerage, believes that there is little doubt now that any signs of recovery the US real estate market may have exhibited were nothing more than a mirage.

The final nail in the coffin of housing over-optimism came in the form of the worst slump in the sales of new homes in the US since records began in the 1960s.

The Commerce Department data showed that sales of new homes in the US tumbled by a massive 32.7% in the month of May.

Alluding to the expiry of a government tax credit targeted at first-time homebuyers completing their purchases before June 30th, Peter Scott, Senior Vice President at “Okuma Group”, said “It‘s patently obvious to all that the real estate market in the US cannot even mark time let alone recover in the absence of government support”.

The market has been the target of more than one stimulus measure. The US Federal Reserve spent more than $1 trillion buying long-dated agency debt from the likes of Freddie Mac and Fannie Mae in an attempt to keep mortgage rates low to entice borrowers but, with many Americans out of work or worried about job security and lenders imposing stricter lending criteria, the market remains heavily dependent upon government stimulus.

“Okuma Group” said the housing data cemented its view that the US economic recovery was looking increasingly unstable and warned clients to sell peripheral stocks into rallies as and when they occur.

The post Okuma Group: 33% Slump In US New Homes Sales… appeared first on 12 Press Release.

Okuma Group analysts have apparently stepped up their efforts to encourage their UK clients to protect their capital from the imminent ravages of inflation citing the rush to buy gold and other hard assets in Europe as the single currency plumbs four year lows against the US dollar.

The UK government is tasked with reducing the country‘s huge budget deficit and has already indicated that cuts in public spending and higher taxes on the way. Most economists believe that the measures pose a significant threat to the fragile economic recovery and Okuma Group appears to concur if the content of its latest client newsletter is anything to go by.

The firm believes that the prospects for lower growth will send the British pound lower against the US dollar and other world currencies making the goods Britain imports more expensive. One of the Okuma Group analysts said that with British banks and building societies paying next to nothing in terms of interest and inflation currently running at 3.7%, the need to protect the purchasing power of their hard-earned capital ought to be the number one priority for British savers.

Okuma Group continues to extol the virtues of the traditional safe-haven of gold but also identifies silver and other commodities like oil and foodstuffs as excellent stores of value in times of financial turmoil.

The firm said that the wide availability of exchange-traded funds which invests in said hard assets could yield far higher returns that those achievable in traditional deposit or savings accounts.

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â€Å“Okuma Group” believes that financial markets focused more on what the UKâ€â„¢s Chancellor of the Exchequer, Alistair Darling, failed to say than what he actually did say during his Budget address.

Investors hoping to hear concrete plans for spending cuts and tax increases were offered what they considered to be half-hearted attempts to appease voters and markets. In response, investors sold sterling on the foreign exchange markets sending the pound to a two-week low against the US dollar. They also sold gilts which forced prices down and yields up.

Analysts at the Asia-based investment broker said that Britain could be facing a debt crisis similar to that afflicting Greece unless plans are put in place to tackle the near 13% of GDP deficit.

â€Å“Okuma Group” speculated that despite the urgent need for clarity on the situation to emerge from government, the impending May 6th general election may not result in a clear victory for either of the two main political parties. Such an event could result in even more wrangling and stalling over the terms of any austerity package.

â€Å“Okuma Group” sources believe that both parties are reluctant to spell out the need for austerity to an electorate that wants to be told that there is a painless solution to the UKâ€â„¢s problems and this may increase the likelihood of a hung parliament.

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