Art Cashin Explains Why The ADP Conundrum May Soon Be Resolved

Tyler Durden's picture

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hedgeless_horseman's picture

Art is a fossil.  Truly I tell you, nobody uses this old stale data from ADP or BLS.  At this point, I believe that everyone running money has at least one executive from a large ">PEO (with a network log-on) in his or her expert network.  Better data begets better decisions.

It's not like change in payrolls at large PEOs (aggregated from several PEOs) is insider information, right?

Why else do you think Wall Street analysts would take such good care of so many low-level wonks at Administaff and the like?

drivenZ's picture

somebodies using it for something...albeit it for momentum or whatever but it certainly helped the market tank yesterday. 

hedgeless_horseman's picture

That is the dumb money...the "smart" (see my post above) money is always already positioned, ergo, "sell the news."

For years there have been two camps on the monthly release by the BLS of the “nonfarm payroll” numbers.

What Art fails to mention is that both camps are populated entirely with sheep being led to the slaughter.

rocker's picture

Wisdom comes with age.  Don't you think Art already has that figured in?  He is there for that wisdom.

  Please. Don't be so immature. The older guy has been there, done that and spit most out already.

Withdrawn Sanction's picture

Art may be a fossil, but like a fossil, he's a survivor.  The key here is not his analysis of the data (the trees), but the analogy he uses (the forest).  He's telling us something very plainly, albeit not directly for those unacquainted with history.

hedgeless_horseman's picture

I like Art, but Edwards and McGee are dead and buried.

by hedgeless_horseman
on Fri, 09/03/2010 - 09:41

Fundamental analysis?  Earnings?  Technical analysis?  Charts?  We don't have a prayer when Ben has his finger on the button under the table

You can take the ghosts of Graham, Dodd, Edwards, and McGee, as well as every CFA on the planet to manage a portfolio.  I'll take one insider at 33 Liberty and my performance will wipe the men's room floor with your's.

You didn't see Raj employing any technical analysts, did you? 

jeff montanye's picture

you exaggerate the powers of the federal reserve, imo.  but only time will tell.  

hedgeless_horseman's picture

Do not understimate the power of the Dark Side.

If no more QE and the S&P stays above 1200 or so and the 10y stays below 4%, then you are right.

Carl Spackler's picture

Exactly, Withdrawn Sanction.

Art is "a survivor"...which means he is consistently clever or a fantastic risk manager.

Aside from that, he is a skilled story teller.

Even though many of us know that the BLS' NFP data is BS, the market still jerks when it is released, so you have to pay attention to it.


rocker's picture

My bet is Art watches. Just like the fox. Waits for the extreme, either way, and then makes his money. Yup.

SheepDog-One's picture

I GUESS Bernank could try putting on a dress. Probably does it all the time anyway.

NotApplicable's picture

And he likely runs like a girl.

Dr. Engali's picture

You gotta love Art. Maybe the only credible  man on the floor.

Temporalist's picture

There are so many Rome analogies floating around today it's like the meme that won't quit.

Anaxagoras's picture

BLS May Jobs +250k!!! I mean, if you're just going to make it up anyway (birth/death "adjustment'), why not make it up BIG.

Caviar Emptor's picture

Art! They don't make them like him anymore. 

Regardless of what BLS says the NFP is on Friday, we've moved into a new paradigm this May when compared with May 2010: right up through the Spring of 2011 it was still possible to rationalize that the "Slow Recovery" story was still real and plausible. 

That's out the window as the Depression now enters year 3 and heroic stimulus measures have failed. 

It goes back to what I said in 2008-9: the massive loss of employment  and opportunities wasn't just part of a cycle. It was The Downsizing of America, the result of 3 decades of relentlessly giving away the farm through offshoring and reckless over financialization. 

FieldMarshal's picture

Just looking at the methodologies of the two surveys, its hard not to say that the ADP release would be more accurate and harder to manipulate.  Why anyone believes the BLS numbers is beyond me.  Its getting into CPI territory for fiction.

DosZap's picture

 than due to the traditional Birth/Death adjustment fudge factor.


Someone telll me WHY they use this stupid phrase?.

People near death are not working, anymore than newborns.

This has to do with Pop Growth,how does it affect the jobs market at all?.


flattrader's picture

Just go here for the real unemployment story.

This guy has the best handle on the number which hasn't budged much.

Just eyeballing it, the range seems to be 22-23% since the start of this disaster.

Kilgore Trout's picture

If Art had written the high-school history books I used, I might have actually read them.

spanish inquisition's picture

I like Art, he is based in old school reality that we may resurrect some day in the future.

Currently we have Wall Street creating new realities, just as it is done in the government. With all winners they will write the history when they determine how they want to be remembered at some later date. As they say in Hollywood, we'll fix it in post.

It is what it is, til it ain't.

trav7777's picture

All the Ministries of Truth will show full employment even when nobody knows anybody else who has a job.

If the EPA's disconnect of radnet post-Fukushima wasn't all you needed to know, then you aren't amenable to education

monopoly's picture

Art is real. Am so tired of this market I raised mostly cash, except for my physical, a little FAZ and TWM. That is it. Wearing me down.

Rikky's picture

I think you're being a little harsh in bashing the ADP report as something that's a bunch of unpredictable, useless, fossilized data.  The data that is used in the report comes from REAL PAYROLL across 500k+ companies ranging from 5 to 50k employees.  The data is REAL, the problem is the algorithms Macroeconomic Advisors uses to construct their predictions.  What ADP needs to do is get rid of Macroeconomic Advisors and find a company that is more skilled at building predictive models.

hedgeless_horseman's picture

It is REAL...REAL stale. By the time it hits the press that data has been viewed and shared more than an Internet photo of Christina Hendricks in a tight gown. 

Rikky's picture

i know for a fact that isn't true.  in fact the only people who view the data at this level and detail is Macroeconomic Advisors.  Folks to use it internally for sales and marketing purposes but that's it.  ADP isn't a loose lips company in fact they are very conservative and don't share there data with anyone hence why the ADP report was a big deal.

jsmfr's picture

Keep in mind that the B/D adjustment is to the non-seasonally adjusted data.  You can't take the B/D adjustment and compare it to the reported seasonally adjusted change.  For instance, in April, B/D was +175K, and unadjusted increase in payrolls was +1169K, so B/D accounted for 15% of the rise. In March, B/D was +117 versus unadjusted +925K, which was 13%. February was +112K /+811K for 14%.

rocker's picture

Do you think your data matters to anyone.  Not, unless it actually reflects reality.

rocker's picture

Just a note to the wise ones.  Zero Hedge has some of the best data anywhere. The Hedge Rules on.  

AldoHux_IV's picture

This is why these numbers aren't to be trusted-- they only serve to prolong the agenda of moronic greedy fools.

rocker's picture

+10  Sort of like the first of April. Fools Day.  Eh.