20101028 unemployment paperwork 35
NEW YORK - OCTOBER 08: Dale Chandler's unemployment insurance notice sits on a table on October 8, 2010 in the Brooklyn borough of New York City. The U.S. government reported today that the U.S. economy continued to shed jobs for the month of September. The unemployment rate remained unchanged at 9.6 percent in August - 


JEREMY HOBSON: Now to Julie Niemann, she's with Smith, Moore and Company in St. Louis and she joins us on Tuesdays. Good morning.

JULIE NIEMANN: Good morning Jeremy.

HOBSON: First off Julie -- two big stories going today. Obviously the midterm elections, also the Fed starts its two day meeting that many are expecting is going to end with some announcement about injecting more money into the economy. Which one of those stories are you and your investor friends paying more attention to?

NIEMANN: Well the election is pretty well baked into the market. We're expecting the Democrats to win the Senate, the Republicans the House, which means there's going to be no further government stimulus. And that did for about 1.5 percent of growth here in the United States. So we've got a stalled game for next two years as we breathlessly await the 2012 elections.

HOBSON: OK, assuming all those predictions are current and republicans do make big gains in the House -- how does that change the Fed's role in getting the economy going again?

NIEMANN: Well the ball is completely in the Federal Reserve's court. But the problem is it's a deflated ball. QE2 starts tomorrow --

HOBSON: That's quantitative easing two.

NIEMANN: Quantitative easing, right. Buying about $500 billion worth of government bonds -- this will pour more money into the banks. Interest rates are going to stay near zero, and lending stays very anemic to businesses. Banks have little incentive to lend, so it's not going to have any other affect other than to put the financial institutions awash in cash.

HOBSON: Well we'll still be watching what happens tonight. Julie Niemann, analyst with Smith Moore and Company in Saint Louis, thanks so much.

NIEMANN: You bet.