Archive - Feb 6, 2015

According to corporations themselves, there were at least 18,000 terminations in the high-paying energy sector. According to the January payrolls report, the number of Oil and Gas Extraction workers declined to 199.5K in January from 201.4K in December, a virtually non-exstant drop of 1,900 workers (and even the not seasonally adjusted, raw data shows a tiny drop of just 3.1K workers). So did the BLS choose to ignore for these thousands of jobs losses, or did it simply forget?

The era of living off borrowed money is over in Greece, and the Greek people now have a choice: they can continue down the path of poverty by leaving their culture of corruption unchanged, or they can grasp the nettle and support a new culture based on transparency, fiscal prudence and strict adherence to the basic rules of monetary management.

As already observed, when it comes to tracking the job losses in the energy space, the BLS had some rather significant "seasonally-adjusted" or otherwise issues in January, reporting just 1.9K job losses in the oil and energy exploration space, when the reality was orders of magnitude higher. But while the Bureau of Labor Services may have failed to notice the collapse of the highest-paying US jobs (after Wall Street of course), it determined that over 250K jobs were created in other sectors. Where were they?

Happily ignoring the 'fact' that the unemployment rate rose in the US today, talking-heads continue to proclaim the US economy will be the economic engine of the world going forward... cleanest dirty shirt... where else are you going to invest. Of course this ignores the fact that US Macro data has been a disaster over the last 2-3 months. But there is one dissident voice who dares to speak up... Canadian Finance Minister Joe Oliver said on Friday, although the United States is carrying the world economy at the moment, "that is simply not sustainable." Blasphemy!!

As UBS' Maury Harris proclaims in the headline, "don't be out of the office on June 17th" - the mid-year FOMC meeting. Today's jobs data will only serve to boost the Fed's confidence that they are reading the labor market correctly, and that is being rapidly 'priced-in' to the short-end of the yield curve as implied rates surge...

Following his outburst at the "independence" of the Turkish Central Bank earlier this week (which crashed the Lira), President Erdogan has opened his mouth again this morning...

*ERDOGAN: TURKEY NEEDS NEW CONSTITUTION AND PRESIDENTIAL SYSTEM, and
*ERDOGAN SAYS PEOPLE SHOULD RESEARCH NEW YORK TIMES OWNERS

So the blame for his nation's weakness is an independent central bank and the NY Times... The Lira just passed 2.47 to the USDollar - a record low.

Remember that whopping 353K jobs number in November? Well, following the data revision, it was boosted by 20% to a whopping 423K - the second biggest monthly increase in jobs in the 21st century! And breaking it more fully down, what was supposed to be a total gain of 2,952K jobs in 2014 has now been revised to 3,197K. And the best news of the day: that average weekly wage you thought you were collecting during all months of 2014? That too was just revised higher across the board.

It would appear "good news is good news" this morning as better-than-expected payrolls data (but the unemployment rate rose so they'll need to spin that) has sent stocks higher, bond yields higher-er, and the US Dollar higher-est. PMs are weaker, crude is sideways. EURUSD is back under 1.14 as the week's volatility continues.

So much for expectations that January, missing on 9 out of 10 previous occasions, will miss again, as the BLS just reported that in January a whopping 257K jobs were added, far above the 228K expected, and up from December's 252K which was revised as part of the annual BLS data revision to 329K, a whopping 147K revision! The unemployment rate rose from 5.6% to 5.7%, above the 5.6% expected. But most notable, the average hourly earnings surged from last month's -0.2% by a whopping 0.5%, the highest monthly jump in average hourly earnings since November 2008. It remains to be seen just how this is happening with mass layoffs in the oil patch, but what is now practically assured is that the Fed will have no choice but to hike as soon as June.

Despite ECB funding restrictions and German demands, it appears Greece will not yield to the pressures from its 'peers' to toe-the-line and accept servitude. None other than Greek FinMin Varoufakis made that very clear this morning...

WILL NOT AGREE TO ANY DEAL RELATING TO PREVIOUS BAILOUT PROGRAMME AT NEXT WEEK'S EUROGROUP - GOVERNMENT OFFICIAL

While ECB's bank supervisor Nouy has proclaimed Greek banks "safe", it appears the market is not so sure as Greek Bank bonds fade along with weakness in EURUSD. It seems last night's pro-government protests have emboldended Syriza further to keep their promises, much to the chagrin of Merkel et al..

Remember the "great rotation"? Neither do we, because the bank that year after year coined the term to prepare investors for a renormalization of the economy as bond yields rise alongside stocks (something that happens in any normal, non-centrally planned banana world), that would be Bank of America for anyone confused, just reported that in the latest week, EPFR data showed inflows to all fixed income funds of $16.04 billion – the highest on record going back to at least 2008. On the "other side of the spectrum were stocks that had $5.52bn of outflows, down from a $1.62bn inflow in the prior week." And just like that, it's a bond-pickers' market, even as central banks trade with each other in various dark pools to keep global equities, and thus confidence, stable even as the capital tsuniami screams deflation for years to come.

• RadioShack files for bankruptcy; Sprint to take over some stores (Reuters)
• Kansas To Issue Bonds and Invest Proceeds to Boost Pension Returns (WSJ)
• Merkel to Make Last Push With Putin as Pessimism Prevails (BBG)
• Islamic State in Syria seen under strain but far from collapse (Reuters)
• Texas Swagger Fades Fast as Oil Town Squeezed Hard by OPEC (BBG)
• SEC probes Blackberry options trading ahead of Reuters report about Samsung talks (Reuters)
• Spanish Bonds Underperform Italy’s as Podemos Gains Popularity (BBG)
• Steelworkers Union Rejects Offer From Refiners (WSJ)
• Brazil January Inflation at Fastest Pace in Nearly 12 Years (BBG)

In 1913 the US national debt was less than $3 Billion, gold was real money, and a cup of coffee cost a nickel.

By 2015 the US national debt had increased to over $18,000,000,000,000 ($18 Trillion), the gold standard was called a “barbarous relic,” most currencies had devolved into fiat paper and digital symbols backed by insolvent governments, and a Grande soy cinnamon latte, double pump, triple shot, extra hot, with sprinkles cost about five bucks.