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Another Freaky Friday?
Submitted by Leo Kolivakis, publisher of Pension Pulse.
It
was another freaky Friday. First, let's discuss the US jobs report.
There was a decline of 20,000 payrolls in January and the unemployment
rate fell to 9.7%. Despite being off in my forecast (I was expecting
big payroll gains close to 150K), I am still convinced that big job
gains are in store for Q1 & Q2 2010.
There are two encouraging things worth noting from the January jobs report.
First, temporary employment added 52,000 jobs in January and it wasn't
all Census hiring. Since reaching a low point in September 2009,
temporary help services have added almost a quarter of a million jobs.
Why
is this important? Because employment lags the broader economic
recovery, and companies usually hire temp workers initially before
offering them full-time jobs. As shown in the chart below, the pickup
in temp workers has historically been a good harbinger of future
employment gains.
Next,
Stéfane Marion, Chief Economist & Strategist at the National Bank
of Canada noted the following encouraging news from the US jobs report:
...the
wage bill is now expanding at a 4% clip in the last three months, the
best showing since early 2008. We also note that the household survey
from which the unemployment rate is derived showed the addition of
784,000 jobs in January (after adjusting for revisions to population).
The employment figures derived from this survey, however, are much more
volatile than those obtained from the payroll survey. As such, it is
preferable to use a 3-month moving average to extract the underlying
trend. As shown, household jobs still show a gain of 110,000 after
smoothing. In the past, the household survey has led the payroll
survey coming out of recessions.
All
this means that no matter how the BLS muddies the waters, job growth is around the corner. It has been a severe
recession which is why it's taking a frustratingly long time to see
some meaningful employment gains, but the recovery in the US labor
market is already upon us.
Now, the stock market is another
beast altogether. The explosion of algorithmic trading makes it very
difficult to understand the daily movements in stocks. Just look at
today's price action on the Dow:
What
happened at the end of the day? Traders will tell you "it's just short
covering" while conspiracy theorists will tell you it's the "Plunge Protection Team" (PPT) or Goldman Sachs.
Maybe it was just the
big hedgies manipulating shares lower in the early morning so they can
scoop them up at attractive levels. Who knows? All I know is that there
is still plenty of liquidity out there to drive shares much higher.
That's why I keep buying these dips, especially the big dips on solar
shares.
Look, is the market rigged? You bet it is. If you study
stock markets on a daily basis, you'll see very weird things that defy
logic. But at the end of the day, it all boils down to fear &
greed. Forget Greece, PIIGS and all the noise coming out of Europe.
This is just noise that the big hedgies use to feed off retail and less
sophisticated institutional investors.
So, while it was another
freaky Friday on Wall Street, I'd say the US jobs report was
encouraging as was the price action in the stock market. Things are
slowly getting better, but the pace of job growth is painfully slow.
However, as the recovery gains steam, job growth will follow. It's only
a matter of time now.
»
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Leo, cut this algo-trading slamming bullsh*t. You are beating a dead horse. Human short-term traders are done. Go play with your solar stocks and leave that speculation in the peanut gallery.
Leo, I want to like you, I really do but then you post what proves to me you just don't get it:
"but one thing I can tell you is that corporate America also does not want deflation, so they better start hiring Americans because those profits from elsewhere will disappears fast without a sustained US recovery."
I could posit a 1000 words about how that has to be the most foolish statement I have ever read. Suffice to say you believe a company will sacrifice profits to halt deflation which is deflationary in itself.
You then follow up with another comment that is also baseless:
"Thanks and while I agree with you, the commercial RE "bomb" is really not going to hit banks as hard as you think. It's not like they don't see it coming and aren't provisioning for it."
Lets use WFC as just one example. Granted they have more exposer to res then cre loans. The fact is they reduced loan loss reserves in Q4 by 30% at the same time delinquencies increased by over 16%. WFC is not "provisioning" for the coming "bomb" and I doubt any others of the extending and pretending are either.
Then of course we have your NFP prediction which has so far proved you wrong, very wrong. Selectively choosing one article and omitting the massive 1.4 revision which was 66% worse then even the most pessimistic predictions is nothing short of malpractice.
I wanted to believe you had some inside track regarding employment. Your wild eyed optimism is laudable, who doesn't like an optimist but just like your statements noted above it's just not base in any reality.
Good luck, regardless.
TT
Leo...obviously your MS, Nortel, the breathtaking decline in solars, being dead wrong in 05 and 06 and being fired have not humbled you at all. Your smug know it all act is a character flaw that I am surprised you have never come to grips with especially with your medical history.
What if there are people who actually follow your advice!!!! They are getting crushed! I have never,ever read one thing about investing or trading like you.....yeah yeah...I used to run money for all the big hedgies...buy solars on the dips...yeah yeah...liquidity...dips...buy buy. Your intellectual dishonesty is frightning.
The only nice reason I can think of why you act this way, is that you have been brainwashed with the whole optimist self help cult...placebos don't always work and neither does optimism in the face of cold hard macro economics and charts going from upper left to lower right...true optimism helps people cope with reality... (hint...its not going to make solar stocks rise no matter how many people in here you get to buy them.) You may not care because obviously it does not effect you, when you lose other peoples money...but the people in here, don;t want to lose 30 percent of there money in a few weeks or 50% in a few months. Most of us are not on an unlimited time line investing for pension funds that will eventually go bust...and most likely after all the jack ass pension managers who invested them in solars are dead!
If you want to be respected at all, respect the trade and respect the people you are giving advice too...you come off as a juvenile. Even if you are right...you need to bring something else to the table to be taken seriously. If you have not learned from the above mistakes...let me be the first one to tell you...you are not as bright as you think you are!!! And you have a lot to learn....as do I.
I was not wrong being bearish in 2006 (even if I was early) and I couldn't care less if you or anyone else here respects me (you all obviously do or else why bother replying with such intensity). I am going to live and die with my trades.You can do whatever you want with your money (if you are older, buy high quality dividend stocks). This is my money and I can deal with the wild gyrations in solars, accumulating more when they get whacked, knowing they will go right back up. Have a nice weekend and god luck buying gold or whatever else you are doing with your money. As for brains, never really met anyone in finance that was exceptionally bright. The brightest person I ever met taught me political philosophy at McGill University, so excuse me if I do not take that comment of yours too seriously.
Disclaimer: I do not run pension money, only my money. You do not have to do what I do with your money. I am a risk taker and will live with gut wrenching volatility. I can't explain my strategy to risk averse people, but I do accumulate solars on the big dips. This is one sector I really like for the long-run. Others I really like are tech, medical devices, and agriculture. Will start buying more of these companies in 2010.
Good on ya Leo.
I don't think there is anyone on earth who doesn't see the risks out there. I can see plenty of ways the world might screw up but that does't mean its guaranteed or that specific situations won't do well even if/when those things happen.
I mainly trade exploration and mining companies. Indiviual ones - not ETFs - and I have had everyone and their mother lecture me about how ugly the markets were and that I was crazy to be in that stuff going into a "depression".
They are entitled to their opinions but I know I made a hell of a lot more than any of them in the past year. You have to trade smart and take money off the table all the time but anyone who thinks people riding a one year 70% rally are stupid clearly spends alot more fantasy time trading than real time.
Not a big solar fan either but keep up the good work Leo.
Leo,
Too much kool-aid, or too much prescription drugs....in the real world there are several things, and several reasons why this will turn to a depression.....
1. Consumers are tapped out...Debt ridden, no more credit. ( current fact)
2. Banks will die this year in the coming CRS collapse. ( look at all the empty retail space)
3. Politicians are still spending like a drunk sailor, it will induce the tax environment of Europe x2.
4. DELEVERAGING.....look at all the carry trade margin calls going on....greedy traders with bernanke bucks are screwed.
5. China is the last lender, and they are about to implode with a real estate bubble.. then bernanke will print more money, devalue our currency further.
6. The market will never see 10,723 again for at least 5-10 yrs and we are headed to 450 on the S&P where the P/E will be about 5 times...due to STAGNANT GROWTH prospects for many years dues to the TRILLIONS of debt we are mired in now and more to come.
7. Sell that shit you are drinking, you'll make more money than being long.
8. This is/was NOT a bull market, just an up-leg before the c wave down.......of a continuing BEAR market.
9. The few things we make in the USA, are mainly MORE DEBT. Wow, what a commodity!
10 The only jobs, will be blow jobs, hand jobs and screw jobs.
I am no Harvard grad, or a floor trader, or hedge fund guru... Just a main street guy looking at the big picture, and buying lots of bullets. AND, I AM SHORT, for all the above reasons... WITH MY OWN MONEY, NO ONE ELSES.
R U KIDDING ????????????
R U KIDDING ????????????
The March 2009 bear market rally is over.
DOW/SP500 downtrend is confirmed on the daily chart.
The 'recovery' is dead.
http://www.zerohedge.com/forum/market-outlook-0
Demand is all there is. Everything else is it's bitch. There is and will be very little demand as the sheep are shorn. The wool will grow back ... in a while if you let them do it. Then you can go back to ... whatever it is that you do.
Two scotches and I'm an economist. ;)
Are there any optimists on ZH or is the world always dark and gloomy for you folks? How many of you expert traders made money in 2009? Where are you investing now and more importantly, WHY???
Mostly dark and gloomy, wife hates me...but stays with
me because I make money!
to answer your question
1) been long in Au for years . Mostly averaging up
(yes, taking a recent beating, but its not the first
beating Au has given me)
2) CREE LED lighting is the future and Cree has
excellent R&D coupled with good marketing
They recently broke 200 Lumens/watt.Started using
CREe LED lighting in the house about ayear and a
half ago and that sold me on CREE
3) Long oil,farming. Started investing in pasture based
farms (low cost basis farming) about 3 years ago.
Pasture based farm products in high demand and bring
top dollar. A dozen pastured eggs is about 10 buckss..
Acorn finished, pastured hogs can command up to
64 bucks a pound!
Agree with your calls on oil and pasture based farms. GL.
Leo,
I'm not an optimist, but I'm also definitely not a pessimist, either. If you were to show me an 8oz glass with 4oz of water in it and ask me for an opinion, I'd tell you it is neither half empty or half full- simply an 8oz glass with 4oz of water.
Wait, you use the metric system, don't you...
Well, I've been dollar long for the past two months, out of equities, and counting my winnings on my VIX options. As for the long-term (10 to 20 years), I think there is a lot to be said about solars and other alternative energy companies. But ultimately, someone needs to figure out how to make these damn things efficient in order for them to become part of everyday consumption.
I would be skeptical about getting involved in alternative energy plays for the next 5-or-so years unless I had a good source inside DARPA, but that's just my take.
Keep you chin down, your fists up, and keep moving forwards, Leo.
Solar amounts to nothing without a better battery; unless, of course, Leo, you have developed the technology to have sunlight for 24 hours.
I, sir, am an optimist. But optimism ought to be well founded. When I hear a beating drum, I run for the hills and preserve my scarce capital.
The world is dark and gloomy for many people. Depression is rampant. Lots of dysfunction and stress out there. Having the luxury to risk money on solar stocks, gold or anything else is a privileged situation. Always darkest before the storm you know. Personally I'm looking forward to the meltdown of this business so I will be more optimistic about my children's future. The current path we are on is bleak. Nothing but political spin, corruption, and short term selfish strategies. I'd rather invest my energy in building a better future for them than to work my ass off to feed into this Ponzi. I would suggest that many of us are optimistic that this dark chapter ends.
agree completely
mostly bad trades including the one I am stuck in now (as in long an equity index since week before last). Cannot fathom how this can possibly end well.
posted on another thread this is worth watching if you can get by the fact you are watching infowars
Damon Vickers on Alex Jones
pt 1 of 4
http://www.youtube.com/user/kalifornya1#p/u/4/AIT7AnE2W7Q
2of4
http://www.youtube.com/user/kalifornya1#p/u/3/85P3yh9HIV4
3of4
http://www.youtube.com/user/kalifornya1#p/u/2/ISSx0hK_rjM
4 of 4
http://www.youtube.com/user/kalifornya1#p/u/1/lo9b07abMZU
Leo - did you pay for the right to use that pic? You are going to be costing jobs at the AP by curbing their income
FWIW,
i live in Austin Texas - and work for a top web design company. we're busy as heck. but the client base has changed completely. the real estate, financial, consumer goods, and retail clients are gone (or they're dramatically cutting back). but public sector work is coming in strong. and there's a lot more work from local hospital networks, private security firms, bill collection agencies, and others.
so the economy isn't dying, its just changing. I agree w/ LEO.
Hey Anon 220803
Surely you are joking !!! Your business is booming because of "public sector work, hospitals, security firms, and collection agencies ????
That's absolute confirmation the economy is in collapse. Please tell me you are joking.
And while you're at it, tell Bill Burk to pay the $46,000 he owes me.
+100
It's amazing how everyone here is so convinced that stocks are heading lower, and the economy is going to relapse into a depression. And solars will melt away along with all my life savings. LOL, good to know how traders think I am making rookie mistakes. (Love traders but do not take their long-term advice seriously).
Leo, seems that support of the idea of Global warming is beginning to fall apart in you home and native land, at least according to Canada's national newspaper (Implications on Solar???):
The great global warming collapsehttp://www.theglobeandmail.com/news/opinions/the-great-global-warming-co...
The Olympics will be amusing. I live 100 miles from them and this year is amazingly warm. It's 50 F now and that's about normal for this year. I exepect the the massive hay bale base, massive snow trucking and artifcial snow from huge snow making resources to fail.
They are runnig B-Trains full of snow from Manning Park about 80 miles from Cypress Bowl
I will be ROTFLMAO
@leo
1. the jobs numbers are a terrible indicator, all the sp companies just got rid of all the jobs that werent needed, their eps is off the hook, they just cleaned things up, there isnt any revenue growth, 95% of all the revenue growth is in the banking sector(that we all know). and even if the revenue picks up they will be hesitant to hire again, fearing not to fall for the same trick twice.
2. if i had a 1,000,000 at the sp tops and on march 09 i was down to 300,000 even a 200% rally woudnt bring me back to were i was, and ur talking about a 66% rally
In the US, it takes the creation of 150K new jobs created per month in order to absorbe new graduates into the workforce. There has been no net new job creation since 1999. The BLS and the IRS should welcome an audit by Tata Consulting Services in India to help understand their methodology. In the US, the upcoming Census allows us to hand count the unemployed, although I bet that question isn't on the Census form: "your salary in 1999?" Your salary in 2009?" should be the start of figuring the unemployment rate in the
A voter initiative or a consitutional amendment in the US is in order to take out the guesswork in the unemployment rate. Even SGS would welcome the confirmation.
Every small business owner I know, graphic designers, printers, mech. engineers, steel fabrication say growth is non-existant, stabilized at a very low level (-20 to -50%) and now is flat. Two people I spoke to 3 months ago told me business was booming, overtime, travel, etc. One worked for a HR outsourcing company, the other IT services for banks. The two green shooters from 3 months ago now tell me everything dried up and they're worried about getting laid off.
Leo is this your first bear market? I think it must be you seem to have a bad case of Tolstoy Syndrome you only seem to want to look at the figures that confirm you postion in the market. There is the small matter of the trillion plus budget deficit.
I have seen four bear markets and this one is no different from all the others the rally in the last 10 months is no great surprise a fifty percent retracment is no big deal especially when it is so fast on the back of so much money printing.
My dog is called Leo. I asked him about the future. He said he didn`t know which is as sensible an answer as you will get from all these self proclaimed EXPERTS.
My dog is called Leo. I asked him about the future. He said he didn`t know which is as sensible an answer as you will get from all these self proclaimed EXPERTS.
My dog is called Leo. I asked him about the future. He said he didn`t know which is as sensible an answer as you will get from all these self proclaimed EXPERTS.
Leo,
2 questions
1. You focus a lot on the ISM Manufacturing employment index, but what is you take on the ISM Non-manufacturing employment index which is still contracting, and what is the relative importance of the 2 indexes?
2. What do you make of TrimTabs estimate of a loss of 100K jobs in January? If you look back over the last several years, the BLS's initial estimates are all over the place, but after final revisions, the BLS's numbers generally track TrimTabs estimates quite closely.
About one of the only good questions here. I attach a lot more weight to the ISM manufacturing index, which is clearly bullish for the US economy. The service index is a lot less reliable. As far as Trim Tabs, if I remember correctly, the predictive power was ok but nothing great. Look at the household survey to gauge future employment trends. Cheers.
Leo, if you would, please elaborate on why you attach a lot more weight to the ISM manufacturing index, and also why you view the non-manu. index as a lot less reliable. Much appreciated.
Let assume Leo is right, recovery in labor is here or coming, and further assume there will be no double dip. What i've not seen discussed is just what is 'fair value' of the US capital markets with a 'recovery'. In order to hit dow 14K 2.5 yrs ago, we had to have an unsustainable number of ppl hold an unsustainable number of mortgages, at unsustainably low rates and then use those properties as an ATM in an unsustainably appreciating RE market. Nobody in his right mind can believe we are going back to that. I figures at lease 20% of those who had held mortgages, never will again. Property values simply should not rise with all the inventory, lack of demand, and requiring real down payments. THe ability to finance, via appreciation of one's house, a lifestyle that one does not merit is likely dead for quite a while. Running some numbers, i can't see how the dow is not fully valued at 11-12K, which oddly enough is where we spent a good deal of time in 07-08 before the bottom fell out with the collapse. Thus, if you buy this analysis (and/or market), you're looking at a market that has at best, 10-20% of upside to be FULLY valued ASSUMING FULL RECOVERY.
When the investing public hears "recovery", i wonder if they also hear "dow 14K?" which simply can't be in the near future. If you've missed the run, you've missed it. its over, its done, we are at fair value. THe risk is all to the downside even if there is a recovery because unless that recovery is perfect, u get the idea----
Leo,
Honestly this article is idiotic. This was a very depressing report. The only reason the employment ticked down was becasue the denominator was changed!!! All gimicks. We need 150k+ a month just to keep up with demographics. You are just being unrealistic and unable to admit that your prediction was ludicrous, way off abse and just wrong. The REAL unemployment rate is now above 17%. That is a fact - wishfult hinking aside. And in another 3-4 months mass layoffs will continue. Just watch.
I am accumulating as many solars shares as I possibly can. Would love if they can bring them down more so I can scoop up as much as possible. You do not need to do what I do; there are plenty of safe high dividend stocks for you to choose from. Trading solars is a bitch and that's not my angle. I have seen them go up and down 50% or 60% in a matter of weeks. Not interested in trading them, I just accumulate them every time they get whacked hard.
Hey Leo
Don't forget to buy Nortel on the dips. Oh yeah, ya did. Sigh...
Solar is another empty tech Fuch show...
My point is that "whacked hard" is not a strategy for trading OR accumulation. If I accumulate on the first day they get "whacked hard", I may find the shares I accumulated that day to be 30% cheaper on the 30th day of their getting "whacked hard".
Quite frankly, the way you describe it, your accumulation "strategy" sounds like a very amateurish form of dollar-cost averaging. I mean, just to stick to CSIQ, it was "whacked hard" on January 11th-12th, but fell another 30% from there to yesterday. It was "whacked hard" in the 14th and 15th, too, yet fell another 20%+ from there. That's two instances of the stock meeting your subjective criteria for accumulation where you almost certainly overpaid. At the very least, you could have accumulated almost 1.5X the number of shares after the third "whacking" as you did after the first "whacking" with the same amount of capital.
I don't know, man, it just sounds like you're making some very big mistakes. The kind that inexperienced traders make and the fact that you're making them in a very public forum brings out two kinds of people: those who will cheer you on to watch you blow up your account and those who've made those mistakes and are trying to warn you. Put me in the latter camp.
As for your false dichotomy between accumulating solars on dips and buying safe, high-dividend stocks, I will just say that I trade the index ETFs for time periods varying from a couple of hours at a time to however long the market lets me stay in a trade as I ride a trend, so I'm not some grandma looking for dividends to supplement her Social Security checks. I'm in there trading every day for myself and what you describe seems insane.
I am in the "made that mistake camp" and trying
to prevent him from ruination.
25 years ago, I lost my ass averaging down, an expensive
lesson well learned, permanetly learned...
I also think that solar is the greatest wealth destroying
technology ever created.That, coupled with high gov't
subsidies, doesn't bode well for solars
After Obama's state of the union address, where he
devoted $54 B to nuclear, I fully expect nuclear to
go into full production here.No choice. Dealing with reality finally.
SOlar providing our energy needs is pure fantasy..
Best of luck to you Leo, I hope you don't loose your
ass..
so sad, does MS attack the brain too? when a stock goes down, it's not always getting whacked, things go down, when investors realize it's a POS. the chinese, are selling panels, for less than they cost to manufacture, look how well that worked out for GM
delacroix,
I think you know I like you and you can handle it when I say this post to Leo was kinda mean. With that said, MS sufferers deal with brain lesions. The point of their medications is to lessen, or even reverse the spread of the lesions. Between meds and the disease it self, it can make the MS survivor irritable and have an unstable mood. Some days the pain is searing agonizing, or they can tingle, or go numb. They can be in the shower and experience the sensation of the drops of water as burns, too intense to bear. Or a sweater too much to have against their body. On others, they cannot move their bodies the way they want to move them. The meds are always changing, insurance is a bastard to deal with because of the constantly changing meds and scans.
This disease is really hard. Each case is a little different. I have someone close to me with the disease. She has to keep her chin up pretty fake some days, just to get through. She does not want to be seen as disabled and works hard to pass. But the effects are degenerative for most. Later, their bodies can start to twist as the muscles do what they do, and their is no "passing" any more.
It kills folks. It can be managed, with resources. I rode a benefit bike ride called the MS 150 because of the woman I know with the disease. If you cycle, it is a good cause, and a fun thing to do. You get contributions, ride the ride, and they spoil you at a hotel destination with free food and lodging.
MS is a central nervous disease which is a common neurological disorder afflicting young adults. Next time, do some basic research before talking out of your ass.
The only reason why you invest in solars is obvious:
They mostly get governments contracts, so you think you are on the safe side. But that's exactly the problem as others pointed out: this recovery is not real ! The more I read your posts, the more I get convinced you still have a lot to learn.Perhaps in Canada, you find enough morons to believe your BS, but please not on ZH.
Every word Leo the K writes is BS, including 'And' and 'The'.
Edited for multiples
All you have to do is think Calif, it is a mess along with most of the other states. ALL government funds are broke, Social Sec. broke and baby boomers retires. Look at the wars, 735 billion out the door for death and destruction.
Who is making money, Goldman do NOTHING for the economy. This economy is based on smoke and mirrors, anybody that uses the government numbers for any economic decision today is headed for trouble. Double dip recession and a currency collapse within 5 years.
Can people become addicted to Prozac? Leo...look into this, I am concerned.
I met a lady just yesterday who said she was addicted to exercise! so yes you can be addicted to anything.
All you have to do is think Calif, it is a mess along with most of the other states. ALL government funds are broke, Social Sec. broke and baby boomers retires. Look at the wars, 735 billion out the door for death and destruction.
Who is making money, Goldman do NOTHING for the economy. This economy is based on smoke and mirrors, anybody that uses the government numbers for any economic decision today is headed for trouble. Double dip recession and a currency collapse within 5 years.