Employment reports

1.

For every legal worker in the construction business, there are 3-6 illegals. That's why the employment numbers have held up so well. In February, construction lost 56,000 jobs. Multiply by 3 to 6 and you have 168K to 336K, dwarfing job creation. So, while the employment reports won't show it, it's still happening, and it will affect the economy.

How can we play this?

If millions of Mexican citizens lose well-paying construction jobs, they will send fewer dollars back. I read a recent report that said that 10% of Mexico's citizens live in the United States. You can bet on it that they make more than the average in Mexico. 10 million/4 per family = 2.5 million workers. It's probably more than that because many come here without family and send money back home.

What about a short on the Peso? Might be okay, but $50 billion home out of GDP of $700 billion is not enough. Plus, the dollar is dropping, and Mexico exports a lot of oil. I'll have to think of another way.

2.

Ethanol production:

• inflation -- higher food prices
• possibly higher interest rates
• more fertilizer
• more tractors
• more trucking
• more railroad traffic
• more rail tanker cars

Which pond is small enough to overflow when the ethanol rock falls in? Most of them have already gone through the roof; corn, for instance. Again, I'll have to keep thinking...

3.

Where is inflation coming from? - the falling dollar. Look at imports. Everything from China keeps getting cheaper and cheaper. Raw materials keep going higher and higher.