There are two government reports out today showing that the economic situation is continuing to be grim.  The Labor Department reported that the unemployment insurance claims for the last week were the highest in 7 years since September 2001.  Initial jobless claims increased by 32,000 to a larger- than-forecast 516,000 in the week ended November 8, from a revised 484,000 the prior week. The total number of people on benefit rolls jumped to the highest level since 1983.

The Commerce Department released the international trade figures today.  The U.S. trade deficit shrank in September.  But most of the decrease was due to the declining deficit with the petroleum exporting states.  The trade deficit declined by $2.6 billion or 4.4%, to $56.5 billion in September from $59.1 billion a month earlier.

The petroleum imports declined 15.7 percent.  But excluding oil, U.S. trade deficit actually widened in September as American exports declined. 

The U.S. Treasury Secretary Paulson is catching it from all sides.  The latest epithet is: a “Flip-Flop.”  Yesterday, Paulson announced that the Treasury Department will be abandoning the original plan to buy up devalued mortgage assets in favor of providing more aid to the consumers, through increasing the availability of student loans, auto loans and consumer credit.   He added that there will be an examination of ways to help prevent the next wave of foreclosures.  Ironically, Paulson’s personal fortune has been hard hit by the financial crisis, too.  When Paulson took office in July 2006, the Dow Jones Industrial Average was near a six-year high and Goldman was selling at $149 a share, making the former CEO’s stake worth about $485 million. Today the Dow is down by more than a third for the year. Goldman trades more than 70 percent below its October 2007 peak of $250.70.

As the news of the Chinese government-announced stimulus package sank in, Chinese stocks traded higher on the Shanghai and other exchanges.  The biggest winners were the construction companies that are buoyed by the prospect of the increased infrastructure spending and the steel companies responding to the news of export tax rebates.  Baoshan Iron & Steel Ltd., China’s biggest steel producer, posted a 4.79 percent gain to 5.47 yuan, while Liuzhou Iron & Steel Ltd., soared 8.39 percent to 3.23 yuan.

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