Archive - Oct 5, 2011 - Story

On the docket: ADP employment and the non-manufacturing ISM index. Off the docket, but far more important: another relentless onslaught of rumors, lies and videotape.

Still bullish on the Friday NFP number? According to Challenger we just went through a "sea-change" event as "Employers announced plans to shed 115,730 workers from their payrolls in September, making it the worst jobcut month in over two years. Heavy reductions planned by the military accounted for a large portion of September job cuts, signaling what may lie ahead as the federal government seeks across-the-board cuts in spending. September job cuts were 126 percent higher than the 51,114 announced in August, according to the latest Challenger report. They were 212 percent higher than September 2010, when employers announced just 37,151 job cuts. Last month’s total is the highest since April 2009, when 132,590 job cuts were announced." Yet this is good news, considering that the biggest source of cuts was the bloated government and the insolvent Bank of America: "One-third of the layoffs announced this year came from government employers. It is, by far, the largest job-cutting sector, with 159,588 announced job cuts to date. This figure includes 54,182 government-sector cuts in September, 50,000 of which are the result of a five-year troop reduction plan announced by the United States Army. The second largest job-cutting sector to date is the financial sector, which announced 54,013 planned layoffs between January 1 and the end of September. That is up 177 percent from the 19,474 job cuts recorded over the first three quarters of 2010. Of the 54,013 financial job cuts this year, 31,167 occurred in September, with 30,000 resulting from Bank of America’s multi-year workforce reduction plan aimed at saving the struggling bank $5 billion per year." That said, while there is no correlation to coincident NFP data, this will be very ugly news down the line.

• Merkel Says Euro Bonds no Endgame for EU Woes (Bloomberg)
• China on Course to Squeeze Property Bubble (China Daily)
• Moody’s Sees More European Downgrades (Bloomberg)
• Athens Able to Pay Public Sector Wages (FT)
• Ireland Still Faces Bailout Challenges (WSJ)
• Death of Euro Seen Exaggerated Amid Non-Pimco Political Will (Bloomberg)
• Buchanan: With High-Speed Trading, Market Cannot Hold (Bloomberg)
• China to Subsidize Sales of Building Materials (China Daily)

Remember when yesterday we ridiculed the FT's third attempt at resuscitating the euro and the f(l)ailing continent (attempts one and two crashed and burned previously) and the stock market's lemming-like pursuit of this innuendo once again? Looks like we were correct. According to flashing Bloomberg headlines, "EU Says No Concrete Bank Recapitalization Plan Right Now" and continues: "EU Economic and Monetary Commissioner Olli Rehn “doesn’t speak of a concrete plan in hand,” his spokesman, Amadeu Altafaj, told reporters in Brussels today. "He speaks of an initiative, of discussions in progress and he pleads for a European approach." In other words, when the IMF rumor wears out in a few minutes, expect Liesman to be true to his name some time around EOD when markets are desperate for a lie. Any lie.

You didn't think Athens would take to government plans to fire 120% of the working population quietly. As BLoomberg reports, Greeks walked off their jobs and as many as 20,000 marched through Athens’ central square to protest Prime Minister George Papandreou’s EU6.6b austerity plan. "They are blaming us, firing us with the result that we won’t be able to live," said Katerina Anastasopoulos, 53, who has worked at the Greek Transport Ministry for 28 years and joined the march on parliament. "They are taking away our livelihood, our life. We are all scared." The response, according to Reuters, was prompt: "Greek riot police fired teargas at a small group of rock-throwing youths on the central Syntagma Square in Athens, where thousands of striking workers marched to the parliament to protest against austerity measures on Wednesday."

FT, Liesman and now the IMF (aka US Taxpayer). Rinse repeat. The program for the spin cycle to keep the EUR afloat, and Europe bailed out on any given day ending in -day is now clear as day. After last night's FT rumor for yet another comprehensive bank bailout program was promptly digested and rejected by the market with the EURUSD recouping all losses, it is now the IMF's duty du jour to protect the doomed currency, naturally with other people's money, in this case America's middle class. And in a flurry of headlines, we find that the person tasked with destroying his credibility, after the market no longer trusts anything Lagarde says, is IMF European Department Director Antonio Borges who according to Reuters, said that Europe needs between 100 billion and 200 billion euros to recapitalize its banks to win back investor confidence and should carry out the plan across the continent, not in a staggered process. He also confirmed that other European bureaucrats lied yesterday when they said no recap plan was being considered after saying that, well, "EU officials are working on a European bank-recapitalization plan." Said otherwise, US taxpayers to the European rescue because the EUcrats can not get their imploding house in order. But, but, whatever happened to China?