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Fugly Farms Friday
For the better part of two decades I sat at a desk at 8:30 on the first
Friday of the month and waited for the Non Farms Report. That was a
long time ago. Nothing has changed. There are still thousand of people
who will put on a seat belt and wait for the numbers to come.
The ‘market significance’ of these numbers is very high. Quite often
they drive the chitchat for weeks. It always makes some mention on the
evening news.
I have always hated this data series. If you have a book you are ‘at
risk’ at 8:29. If you don’t have a book there is no chance to make
money. It stacked up a lose-lose.
There was a time that I got so frustrated with this process that I
hired a few big shot economist to give me an edge. I paid them serious
money for a year. The results were slightly worse than tossing a coin.
To hell with the economists.
Tomorrow’s numbers have the potential to light some fires. The
expectation for the payroll number is either side of flat. That would
be boring if it turns out that way. Even with that, there will be two
camps. The first will say”
Golly this is GREAT! A year ago we were losing 700k jobs a month and now we have broken even!!
The other camp will cry:
This is crap! We need 250,000 new jobs
a month to sustain a recovery! This lousy number at this stage of the
cycle is a sure sign of a double dip in six months!
If we get a breakeven number tomorrow the Vol's in the things we trade
are going to make a jump and the computers will make some dough but I
don’t think it will mean much for the rest of the month. Too much else
to worry about to get agita over a neutral number.
The worst feeling is when the number comes and it is a blow out. Being
on the wrong side of a blow out leads to sphincter issues.
For tomorrow, I will say that anything that is outside of plus or minus
250,000 is going to cause a stir that will last for a bit. If it is on
the ‘over’ there has to be a mighty hit to the bond market. A very
‘hot’ number coupled with the big calendar next week will take the ten
year close to 4% by the end of the day. On the flip side, if the number
is a big downside surprise the dollar is going to get whacked and gold
will be up $25.
My guts tell me that the economy is growing faster then we might think. I look for a surprise 'upside' number. Big enough to dent the markets.
Can’t wait.
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The recent COT gold shorts indicate that the dollar will go down soon.
Politically it's snafu until the citizenry gets hungry and miffed that their kids are starving. Then the SWHTF. Thus the guv is extending unemployment benefits, food stamps to the 10 percent (haha) unemployed. And the unfortunates know whom to blame this time.
The most recent COT reports on gold manifest a huge increase in the dollar short positions and a thus a probable value decline of the dollar in the immediate future.
Stocks are propped up by the guv and its buds -- for good reason from their POV. (i.e. everyone knows who screwed up and why)
Gold/Silver are being held down by the guv and its buds for good reason. (ibid)
Nothing politically will happen other than SNAFU until a large part of the citizenry gets hungry and miffed that their kids are starving. Then the SWHTF.
Thus they extended unemployment payments to the 10 percent (HA HA!) unemployed.
check out the recent, massive action of the Put/Call ratio ... Tyler you need to investigate!
The point being missed is that we live in the Matrix. Everything that we see has been deliberately engineered - the stockmarket, the economic data, the terrorist attacks, the reasons for invading most of the Middle East. If the jobs numbers come out high on Friday this will just be a construct to make the US look good. Or even an attempt to raise rates via the bond market while still standing on the accelerator? Or is it because Bernanke has to still be confirmed and it wouldn't look good if the Fed head was dethroned when the economy is doing so well, and while Ben is being touted as having saved the whole planet from financial destruction? Is it a cover in front of efforts to get China, who are the big threat to the US hegemony currently? Who knows? But we are being led somewhere, and it's not good, and that is for sure.
You should be ashamed for giving credit to such a broken system for more than two decades.
Up or down, Wall Street can go fuck itself.
Sooner rather than later not even a computer will survive.
Some commenters said gold will fall if jobs surprise on the upside.
Not necessarily.
More jobs combined with Fed ease for a "considerable time" is the 1970s Rx.
Some of us are aware of what gold prices did till Volckerism.
Bernankeism is not Volckerism.
i think the zh bls numbers article from yesterday de-mystified the bls statistics such that any improvement or deterioration is meaningless unless it falls outside of the b/d and seasonal tolerance range. even if employment is up 350k we know that it has no semantical inference to the employment picture - it is merely a statistical mirage enveloped by those two phenomena.
with income tax withholding down 8.2% i do not expect any material improvement in employment - i.e. tomorrow's numbers will be statistically insignificant.
and before anyone pees his pants over a sharp up turn, make sure you understand the margin of error. anything inside moe is completely useless information - except that the numbers are FLAT!
the anecdotal information from head hunters in my profession (technology) are tepid at best.
i am calling crap on crap now. leo's irrational exuberance is unfounded.
How do we know Leo doesn't have a big position to liquidate?
+ 167,000...and a 9.90 rate...higher revisions to Dec.
http://www.palgrave-journals.com/eej/journal/v36/n1/fig_tab/eej200946ft....
http://www.palgrave-journals.com/eej/journal/v36/n1/full/eej200946a.html
Tomorrow should be an upside surprise number, but I think the "result" by EOD may surprise people even more.
it doesn't matter what the number is
first, it IS a lie
second, the market reaction is scripted
third, the financial press is a propaganda joke
I don't care what they say the number is, the market will react PRECISELY as they want it to react and the main stream media will proclaim PRECISELY what they are told to proclaim. the entirety of our markets are now a bureaucratic FARCE from hell. the only certainty is that our economy WILL COLLAPSE as a result, and not a little, but totally collapse. the schemers have completely raped our nation. bankstered to death. completely ruined. total rebuild in order, but somehow I'm having a hard time seeing this occur without a bloody revolution. ugghhhhh
"it doesn't matter what the number is
first, it IS a lie
second, the market reaction is scripted
third, the financial press is a propaganda joke"
+10
it's like we're being told the food is poison and we keep eating. they really seem to have us, in spite of our better instincts that tell us to 'move to higher ground' ... odd
Donlast,
all that stuff is a lagging indicator or so I am told.
Mike Shedlock has pursued the issue of ZH's claim that unemployment is being understated by 32% and finds that the reason for the discrepancy is a massive 43% jump in Emergency Unemployment Benefit.
The increase in EUC more than offset the decline in continuing claims and we are now at a new record when combining all measures of unemployment benefits. Economists were pointing out that continuing claims and initial claims were falling as a bullish sign, however what was happening was that those benefits were exhausting for people and these people were not finding employment which is why the House passed a bill in December to extend benefits, thus leading to a massive 43% jump in EUC. This hardly marries with positive job figure tomorrow whatever its size.
I agree. The numbers have little meaning. They never have. But tomorrow morning it will make us stand up. Funny system we have.
I think the Fed would want to see a number that shows growth but isn't hot enough to push interest rates higher so they can keep this thread-the-needle exit strategy charade intact. I'm betting on a middle of the road increase tomorrow. And yea, mostly gov adds.
Oh it will be a big number alright, but 90 pct of it will be for census workers!
Oh it will be a big number alright, but 90 pct of it will be for census workers!
Either way this is going to be great:
-Huge upside "surprise" (how can that be when the market sees everything, but whatever) means stocks moonshot on the recovery strength.
-Downside surprise means liquidity pumps stay on full blast (they will anyway, but whatever) means stocks moonshot.
Can you really lose here?
Yes, because the market may respond opposite the way the news tells you it should.
Or it may respond the way everyone thinks it should just long enough to get everyone on board, followed by a swift reversal.
The price is the news. Nothing else matters.
Buy the rumor SELL the news!!!
counter-intuitive
upside surprise brief (as in hours) equity moonshot until reality of liquidity pumps going into shut down mode -
Bruce,
I am with you - huge upside surprise tomorrow. But I was chatting with a buddy of mine who trades currencies, and he told me that December's cold snap might have affected hiring. I expect crude and greenback will rally while bonds and gold will take a hit. We shall see, but no matter what the headline figure is, buy any dip on the stock market.
" huge upside surprise tomorrow"
Yeah, everyday for 10 months we get some upside suprise.... There is no suprise anymore, its one way and its up.
cold snap affected hiring...really? how? i'm with everyone here screaming that even soaring u6 is underreported, but you kind of contradict yourself there leo. or maybe i misunderstood what you're saying
as for buying equity dips, no thank you
HELLO! Can anybody with a brain hear me? Don't ask some guy who trades currencies, go talk to someone with a real business. NO ONE IS HIRING. 2010 is about preserving capital and hunkering down. End of report.
Any report of a significant upswing is pure malarky, BLS birth death models gone awry, and so-called seasonal adjustments. Look to the unadjusted numbers, if they even hand them out. Period.
Not drinking the Kool-Aid.
this is from Mish who intro'ed the story based on the ZH piece about the us gov't and its reporting.
My answer would be a MASSIVE jump in the Emergency Unemployment Compensation (EUC) benefits, which jumped from 3,594,253 (11/07/09) to 5,143,410 (12/19/09), up 43% in just over a month! The increase in EUC more than offset the decline in continuing claims and we are now at a new record when combining all measures of unemployment benefits. Economists were pointing out that continuing claims and initial claims were falling as a bullish sign, however what was happening was that those benefits were exhausting for people who used up that benefit, leading to the decline in the numbers which is proved by a record (52.24%) exhaustion rate.
I'm just a piece of anecdotal evidence, but only ONE of ten small businesses I've talked with are doing well. And the one isn't hiring.
No one I know is hiring or borrowing. And only ONE guy I know has bought ANY stocks over the past several weeks.
"We shall see, but no matter what the headline figure is, buy any dip on the stock market."
I remember that philosophy well during the tech bubble. So are we at the start of the bubble or the end of it? 2/3 of the DOW names have met or exceeded their highs pre crisis so what about a big gain is to get excited about......we had jobs gains in the 100's of thousands when we were at these prices last time and no one jumped up and down and got excited.
Yep, 'buy any dip' is pure bubble mania. Closer to the end than the beginning, too.
I too, see an upside, due to seasonal hirings. Adding part time Census workers early........
Which will be construed as real JOBS..........Oh, JOY!!!.
When I do not see another 1200+ gone from Lockheed Martin, when real job creations are not adding Government employees.(which produce nothing).
Except more debt, and more cooked employment numbers.
When we see the bulk of 20 million plus going back to REAL jobs ( not part time, not Min wage), then I will be optimistic.
Until then, either way, it's still ALL SMOKE AND MIRRORS.