Archive - Nov 2010

• Unemployment rate: 9.64%, just shy of 9.7%, compared to September's 9.58%
• U-6 Rate at 17%, down 0.1% from September
  
• September data revised from -95K to -41K
• US Change in Nonfarm Payrolls (Oct) M/M 151K vs. Exp. 60K (Prev. -95K, Rev. to -41K)
• Change in Private Payrolls (Oct) M/M 159K vs. Exp. 80K (Prev. 64K, Rev. to 107K)
• Birth/Death adds 61K after adding just 11K last month
• Those unemployed for over 27 weeks increases to 6,206, represents 41% of total unemployed
  
• Change in Manufacturing Payrolls (Oct) M/M -7K Exp. 5K (Prev. -6K, Rev. to -2K)
• US Average Hourly Earnings (Oct) M/M 0.2% vs. Exp. 0.1% (Prev. 0.0%, Rev. to 0.1%)
• US Average Hourly Earnings (Oct) Y/Y 1.7% vs. Exp. 1.6% (Prev. 1.7%)
• US Average Weekly Hours (Oct) M/M 34.3 vs. Exp. 34.2 (Prev. 34.2)

With just 20 minutes left until the real deal, Goldman highlights its case for ongoing economic weakness, in this case manifesting in an NFP number due at 8:30 am that is about 35K below consensus, at 60K, and Private Payrolls at 75K, also below exp of 80K. The three reasons for Goldman's bearishness: 1. State and local cutbacks, particularly in education; 2. The remaining wind-down of temporary Census employment; and 3. Little change in federal non-Census employment. Will they be right? Check back in 20 minutes to find out.

• Dollar steady against euro, which buys $1.4211.
• Eurozone retail sales down .2% for second month in September.
• Gold rallied to $1,393.40, the highest ever, in after-hours electronic trading.
• Japan's central bank kept its key interest rate unchanged at near zero.
• "Material failure" or "faulty design" the likely cause of A380 engine blowout – Qantas CEO
• Amkor 3Q earnings fell 4% to $78M.
• BHP Billiton to build its Canadian potash business despite Ottawa blocking its $39B bid for Potash Corp.

A more in depth look at Morgan Stanley’s returns on equity reveal an even uglier snapshot of performance than the unimpressive, cursory annual overview illustrated in our quarterly analysis released yesterday. Bubblicious credit, QE x 2, and regulators that look the other way from rotting assets still result in piss poor economic performance. What do you think will happen when rates resume their upward move?

For those who still care about the economy, now that it has no bearing at all on the market, which is merely Bernanke's plaything, today we have payrolls, pending home sales, consumer credit, and a horde of Fed speakers, though only a couple of which are apt to provide any insight into this week's decision…No POMO: enjoy it - starting next week the floodgates open.

RANsquawk European Morning Briefing - Stocks, Bonds, FX – 05/11/10

Back on May 17, 2010, I granted an interview to Lars Schall of MMNews Germany, in which I stated, “if U.S. regulators stepped in and said Goldman Sachs, HSBC and JPMorgan couldn’t participate in the gold and silver futures market for three weeks, I really think you would see the gold and silver price more than double in that time.” The last seven trading days in the silver markets, in which the price of silver has risen 11.93%, has provided a window into just how much Central Banks and their puppet bullion banks have suppressed gold and silver prices over the past decade.

"I thought we could mark this November the 5th, a day that is sadly no longer remembered...to sit down and have a little chat..."

Retail traders are notoriously wrong at picking market direction/tops and bottoms. Most retail traders very naturally seem to adopt a counter-trend stance and this offers very accurate signals for individuals looking to trade against this group. This daily report is designed to help traders focus their efforts on higher probability pairs

QEII has suddenly made this paper appear a bargain. Treasury bond investors are not being compensated for their risk at current yields, but muni bond investors are. If the Bush tax cuts are not extended, the effective taxable yield pops up to 4.27% for top earners. That’s a lot in this zero yield world we live in. And let’s face it, taxes are going up a lot, no matter who won the election, making these bonds even more valuable in the future. The risk of an outright default on this paper has been vastly overblown by the media. (NCP), (NVX).

When we first read Matt Goldstein's narrative of a rabbi named Milton Balkany, whose attempt to extort Steve Cohen's SAC for $4 million landed him in jail, we thought little of it and dismissed the story more or less as one in which an individual had gotten access to information that had been first perceived as damaging, yet ended up being simply innocuous. However, Goldstein's follow up to the very curious saga of Balkany, which also includes recently alleged insider trading in company Human Genome Sciences by one Joseph "Chip" Skowron, most recently of Morgan Stanley spin off FrontPoint (and previously of S.A.C.) caught our attention, and after doing some additional research, we may have uncovered some circumstantial facts that could indicate that the connection between Chip Skowron, the insider trading scandal, and SAC may be more substantial, that the rabbi may have indeed been on to something, and that there may be far more here than meets the eye.

The late night (daily) decoupling is here.

Michael Sabia, President and CEO of the Caisse de dépôt et placement du Québec, Canada's biggest pension fund, was the guest speaker at the the Board of Trade of Metropolitan Montreal's Desjardins business luncheon - Business Voices. He talked about the many facets of the Caisse's contribution to the economic development of Quebec, mainly in the context of a changing world, which both the Caisse and Quebec need to adapt to in order to achieve their full potential.

For the visually-oriented ...

The below chart of implied vol skew from UBS is the closest thing we will get to visualizing the now prevalent "Bernanke put" on the stock market. Also, the commentary from UBS is pretty much all we need to know that even the smallest decline in the market indicates that something is very wrong at the Fed, which has now made any stock drops implicitly impossible.