Next stock market crash: Low unemployment signaling Wall Street pain

Reuters / Andrew Burton

• The unemployment picture on Main Street looks downright
  rosy, but that could be signaling future market instability or
  even a stock-market meltdown.
• Jim Paulsen, the chief investment officer at Leuthold
  Group, notes that sharp stock-market sell-offs are usually met
  with widespread Wall Street layoffs.
• In an ironic twist of fate, signs of strength on Main
  Street could be foreshadowing a reckoning on Wall
  Street.

When the housing bubble burst back in the
mid-2000s, plunging the US into a deep recession, many affected
workers on Main Street looked scornfully upon
their Wall Street counterparts.

While the normal folk lost their jobs and their houses, Wall
Streeters got off relatively easy. Sure, maybe some of them lost
their jobs as well — but the general feeling was that the big
banks set the middle class up to fail and then were let off the
hook with mass bailouts.

Well, the middle class may soon have its revenge, albeit in
indirect fashion, according to recent commentary from the
Minneapolis-based Leuthold Group.

That’s because as Main Street workers enjoy their lowest unemployment rate in 18 years,
the fact it’s so low could be portending a very dangerous period
ahead for markets, according to Leuthold’s chief investment
strategist, Jim Paulsen.

And when the market melts down, Wall Street trims the fat. …

Sponsored: 


If you enjoyed reading this story so
far, why don’t you join Business Insider
PRIME? Business Insider provides visitors from MSN with a
special offer.  



Simply
click here to claim your deal and get access to all exclusive
Business Insider PRIME benefits.