The US employment report out Friday was simply awful. Not only did payroll employment fall by 533,000 in November, but we lost far more jobs than we thought in both October (revised to -320,000 from -240,000) and September (-403,000 vs. -284,000 estimate before).

In other words we have lost over 1.25 million jobs in just the last three months. This is while the auto industry is technically not bankrupt. If it is allowed to go under, things will get much worse in a hurry. It's not that Detroit will turn into Dar es Salaam, but it will be worse than anything this country has seen in the memory of anyone not currently living in a nursing home.

The job losses were very widespread, with goods-producing jobs down 163,000 (construction down 82,000, manufacturing down 85,000) and the service sector shedding 370,000 jobs. The only areas adding jobs were Education and Health Care (+52,000) and Government (+7,000).

Earnings estimates have been plunging for both the fourth quarter and for 2009, but remain absurdly over-optimistic. As things stand now, the bottom-up estimate for the S&P 500 [[^GSPC]]  expects that earnings in 2009 will be almost 15% higher than in 2009, and even if the depressed Financial sector is excluded, earnings are expected to be flat with 2008 levels.

The word that springs to mind is "delusional." When considering valuations based on 2009 earnings, substitute the low estimate for the mean estimate.

Folks, its time to invest in antibiotics such as Bristol Myers (BMY) and Abbott Labs (ABT), canned goods like Del Monte (DLM) and Kraft (KFT) and ammunition, for example General Dynamics (GD) and Lockheed Martin (LMT).