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Initial Claims Misses Estimate By 42K, Emergency Compensation Explodes By 652K Over Last Week

Tyler Durden's picture




 

After the double dip in new home sales and NAHB confidence, we are starting to see the beginning of the end of the improvement in firings: initial claims in the week ended January 16 came in at 482,000, higher than the estimate which expected a number of 440,000, which was supposed to be an improvement from the prior week's 446,000. The good news was that the spread between seasonally adjusted and non-seasonally adjusted insured unemployment rate tightened by 20 bps from 110 bps to 90 bps (3.5% SA vs 4.4% NSA).

But by far the worst news was EUC, or Emergency Unemployment Compensation, which as even Mr. Liesman acknowledges now is important, which shot up by a stunning 652,364 to 5,654,544. The end-beginning of the year transition sure caught the DOL offguard.

The combination of initial, continuing claims and EUC for the most recent period is a record 10,701,794 Seasonally Adjusted  or a whopping 12,021,880 Non-Seasonally Adjusted. The double dip is here, and unfortunately for Obama, he is all out of stimulus bullets.

 

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Thu, 01/21/2010 - 10:01 | 200565 gookempucky
gookempucky's picture

Can I borrow 20 bucks from anybody ?

Thu, 01/21/2010 - 10:05 | 200571 Steak
Steak's picture

Here's how to make the world's easiest $1 billion:

STEP 1: Form a bank.

STEP 2: Round up a bunch of unemployed friends to be "bankers."

STEP 3: Raise $1 billion of equity.  (This is the only tricky step. And it's not that tricky.  See below.*)

STEP 4: Borrow $9 billion from the Fed at an annual cost of 0.25%.

STEP 5: Buy $10 billion of 30-year Treasuries paying 4.45%

STEP 6: Sit back and watch the cash flow in.

For steps 7-11 see: http://www.businessinsider.com/henry-blodget-how-to-make-the-worlds-easiest-10-billion-2009-12 

Thu, 01/21/2010 - 10:30 | 200594 Fish Gone Bad
Fish Gone Bad's picture

There is a faster way to make the money.

STEP 5: Loan $10 billion from bank to your new friends.

STEP 6: FDIC bails out bank.

There is a banking saying.  The best way to rob a bank is to own one.  Since no one is going to jail for any of the bank failures, it is open season.

Thu, 01/21/2010 - 12:13 | 200685 Eternal Student
Eternal Student's picture

The last I heard, one needed a minimum of $1 Million to form a bank. That was a while ago, and it might be higher by now. Otherwise, you'd see the cheap crooks doing this, rather than just the expensive ones. They do have some standards, you know.

This is probably one key reason why the number of banks has declined from about 15,000 to 8,000, over the past 20 years. And we're still going down. Reggie Middleton was projecting 1,300 - 2,000 being closed in the next few years, IIRC.

Thu, 01/21/2010 - 12:24 | 200724 Anonymous
Anonymous's picture

Only if you agree to pay me back on Tuesday.
Hey, what's with "administrative backlog"?
http://pajamasmedia.com/instapundit/92237/

Thu, 01/21/2010 - 10:15 | 200579 A Man without Q...
A Man without Qualities's picture

The more evidence we get that the only way the government will be able to pay its debts is by printing money, the more the price of the debt goes up.  If only the Greeks had their own printing press....

Thu, 01/21/2010 - 10:35 | 200603 Anonymous
Anonymous's picture

Looks like Obama needs to double down on employer threats.
Hire or else...

Thu, 01/21/2010 - 10:39 | 200610 colorfulbliss
colorfulbliss's picture

No need to be overly dramatic! I just read the headline story about this on Bloomberg, and they listed at least 5 or 6 "these-are-not-the-droids-you're-looking-for" reasons why this is totally to be expected!

 

Jobs? Who needs stinking jobs! Back to the "Recovery"!

Thu, 01/21/2010 - 10:46 | 200618 Anonymous
Anonymous's picture

Oh, well, since it was Bloomberg. I mean, when have they ever been wrong? Besides, their masters on the hill want cheerleading, not reality.

As an aside, CNN is quoting a political analyst's observations on the Mass. election: "People are so angry they can't see straight." Gee, can't imagine why an unemployed electorate would be fuming mad at D.C.

Thu, 01/21/2010 - 14:46 | 200944 Anonymous
Anonymous's picture

It is because they are seeing straight that they are so angry.

The old adage about liking to be kissed while getting...

America isn't getting any kisses from Inside The Beltway.

Thu, 01/21/2010 - 10:40 | 200611 perchprism
perchprism's picture

 

I want to see what Leo K. has to say about these employment figures.

Thu, 01/21/2010 - 11:24 | 200660 Anonymous
Anonymous's picture

Yeah, this is the second time I got duped into his "the numbers are going to be good" predictions.

Hey Leo, take off those rose colored glasses!

Thu, 01/21/2010 - 15:25 | 201026 Anonymous
Anonymous's picture

i called crap on his predictions when he was
making them a few weeks ago for q1....right
now i don't have to eat crow and do not
expect to need to partake of such delicacies...

however, i would love to be proven wrong....
and i will not consider a census hiring
surge as being proven wrong....

i will reiterate: there has been no
recovery, there will be no recovery (except
for gs), and there will be no double dip
becuase we are not out of the first...

we are in an old fashioned depression
with a new fangled twist of negative
marginal productivity of debt....recovery
is not happening ever...

Thu, 01/21/2010 - 10:43 | 200616 pbmatthews
pbmatthews's picture

Has anyone figured out why last week's EUC dropped by so much (I think it was 450,000)?  How much of this week's increase is just a reversal of that?  Was there some calendar event in play?

I seriously would like to hear others thoughts on this...

Thu, 01/21/2010 - 11:19 | 200654 Reductio ad Absurdum
Reductio ad Absurdum's picture

The Labor Department said claims piled up due to short holiday staffing at state processing centers. Market News International is quoting a Labor Department analyst as saying the week's gain is "not economic, but administrative." Starting with the next report, the government analyst expects the effect to reverse making for a steady decline in coming weeks. An implication here is that short-staffing this year was greater than prior years and is not offset by seasonal adjustments. Note also that data from an unusually large number of seven states had to be estimated for the current report.

(taken from here)

Thu, 01/21/2010 - 10:47 | 200621 MarketTruth
MarketTruth's picture

Brilliant!!!  Plus i have over $50 trillion dollars (seriously).

 

Umm... the US Fed accepts Zim money i assume. Same FIAT type currency as the USD and all that.

Thu, 01/21/2010 - 10:49 | 200624 Smokey
Smokey's picture

game...............

http://projects.propublica.org/unemployment/

 

over......................

http://www.dailyjobcuts.com/

 

Who makes the printing presses?  I'm looking for a sound investment.

Thu, 01/21/2010 - 10:53 | 200631 Anonymous
Anonymous's picture

brother can you spare a trillion?

Thu, 01/21/2010 - 11:01 | 200639 swmnguy
swmnguy's picture

I'll say it again.  We'd have been better off to take the $12 Trillion we've spent so far backstopping the black hole and giving every man woman and child in America $40,000. 

Some of us would have gambled, drank or smoked it away, sure.  But most of us would have paid off our bills, bought down our mortgages, saved for a rainy day, gone to school to get that licensure, opened that business we've been thinking about, or something.  Instead, that money is gone, and we've fixed...um...Nothing. 

And now people perfectly capable of being productive are on the dole until the dole runs out because the dole keeps them alive but just poor enough they can't do anything to get ahead or get into another line of opportunity. 

Is just giving everybody money "Socialism" (cue scary organ glissando)?  Maybe.  If it saves "Capitalism," who cares?  If we wind up with "Fascism" (defined as a unification of corporate insider power with the mechanism of the State) we'll care.  Uhhhh.  Disgust. 

Now I gotta go roll the rock up the hill again for the day. 

Oh, and another thing; Who exactly didn't expect this?  Thanks to TD for not putting in the word "unexpected," but every other news source has the word in the headline.

Thu, 01/21/2010 - 11:06 | 200644 Anonymous
Anonymous's picture

I love a man that can work sideways references to Sisyphus and Rocky Horror Picture show in casual conversation.

This is entirely inappropriate but here goes:

And I don't want you and I don't need you
Don't bother to resist, or I'll beat you
It's not your fault that you're always wrong
The weak ones are there to justify the strong

The beautiful people, the beautiful people
It's all relative to the size of your steeple
You can't see the forest for the trees
You can't smell your own shit on your knees

There's no time to discriminate,
Hate every motherfucker
That's in your way

[Chorus:]
Hey you, what do you see?
Something beautiful, something free?
Hey you, are you trying to be mean?
If you live with apes man, it's hard to be clean

The worms will live in every host
It's hard to pick which one they eat most

The horrible people, the horrible people
It's as anatomic as the size of your steeple
Capitalism has made it this way,
Old-fashioned fascism will take it away

[Chorus]

There's no time to discriminate,
Hate every motherfucker
That's in your way

The beautiful people
The beautiful people (aahh) [x4]

[Chorus x2]

The beautiful people [x8]

-MobBarleyCorn

Thu, 01/21/2010 - 15:40 | 201055 Anonymous
Anonymous's picture

Sure, if they gave everyone $40,000, we'd be better off, but the banks wouldn't.

If everyone paid off their debts, this is the worst case scenario for banks, since they wouldn't be making any interest on the money they loaned out. Banks only make money by issuing credit/loans and collecting the interest.

And since the government is essentially doing the bidding of the banks, you'll see their needs catered to over the citizens' needs every time.

Thu, 01/21/2010 - 11:38 | 200647 economessed
economessed's picture

This UE claims report reminded me to ask:  whatever happened to the guy with the baseball bat in his garage that whacked the chinese crap whilst offering commentary on the economic landscape?

Thu, 01/21/2010 - 11:31 | 200670 Anonymous
Anonymous's picture

yeah walstreetpro2 has been MIA for a while, even on youtube. Maybe they came and took him away for maxing his CC's buying silver?

Thu, 01/21/2010 - 11:12 | 200651 BS Inc.
BS Inc.'s picture

Instead, that money is gone, and we've fixed...um...Nothing.

Sure, to the layman, it looks like nothing is fixed, but to a Wall Street banker who had feared for his end-of-year bonus payout under the prevailing conditions in the spring of 2009, a lot's actually been accomplished over the past 10 months, all of it good.

Any bank borrowing from the Fed at 0.25% (or even 1.25%) and reinvesting the proceeds in Treasuries, as the Blodget article outlines, should definitely not be paying bonuses because that's not even "work" for a banker to claim as the basis for the bonus. That's something someone with the ability to push a "borrow" and a "buy" button can do.

The worst thing is that, as I think about how many bad loans the banks have on their books, at the current pace of earning their way out of the hole to replenish their capital, it will take decades to accomplish this. Since we're following the Japan script, I might as well move there, since they're further down the road to this than we are.

Thu, 01/21/2010 - 13:08 | 200796 swmnguy
swmnguy's picture

+1

Thu, 01/21/2010 - 11:34 | 200672 I need more cowbell
I need more cowbell's picture

Leo, Leo, wherefor art thou Leo?

( chirp, chirp, chirp )

Thu, 01/21/2010 - 12:28 | 200729 Anonymous
Anonymous's picture

Leo's busy dumping Chinese solar stocks?
Hey, this is fun but I _like_ Leo. He's honest and up-front about his beliefs. Take it or leave it. He's an OK guy in my book.

Thu, 01/21/2010 - 14:24 | 200909 delacroix
delacroix's picture

leo's like a child, likeable, but naive, I hope he doesn't get hurt

Thu, 01/21/2010 - 17:57 | 201281 RockyRacoon
RockyRacoon's picture

He's out running up and down the hallway. 

Somebody take those scissors away from him.

Thu, 01/21/2010 - 11:35 | 200673 Anonymous
Anonymous's picture

There will be a double dip almost assured due to declining M3 , which will lead to a depression officially imo, but the question is when in their manipulated GDP reports ? My guess is we get the rosy sugar high GDP numbers for Q4 09 and Q1 10 and then by the 3rd Q 10 we will have GDP going negative again - Q4 10 at the very latest and how high will unemployment go after that ?

Thu, 01/21/2010 - 11:41 | 200678 bugs_
bugs_'s picture

Piled higher and deeper.

Thu, 01/21/2010 - 12:05 | 200703 Miles Kendig
Miles Kendig's picture

The combination of initial, continuing claims and EUC for the most recent period is a record 10,701,794 Seasonally Adjusted or a whopping 12,021,880 Non-Seasonally Adjusted.

I appreciate that I am the slow one here, but with the BLS claiming that 7,000,000 jobs have been lost this cycle must also indicate that the BLS believes that somewhere between 3,700,000 & 5,000,000 jobs have been created during the same period.  Folks, am I getting this right or am I being supremely clueless on point?

Thanks.

Thu, 01/21/2010 - 12:17 | 200716 Anonymous
Anonymous's picture

Created or saved, dear friend. Created or saved.

Shamelessly stolen and bastardized from another thread:

Anyone have a baggie of green shoots we can smoke?

Thu, 01/21/2010 - 13:06 | 200771 Miles Kendig
Miles Kendig's picture

Thanks.

A 2.5% hold rate would indicate about 7,500,000 Americans would answer in the affirmative.  I would suspect that this ratio is fairly close to the readership here.  Since green shoots is a federal reserve/treasury deal I would hope that they would do their part.  Especially since a nice hand crafted premium smoke runs between $150 less - $50 more than the price of Palladium bullion and the goal of all of this printing is to increase the velocity of money within the economy.  I agree it is time to be loyal Americans and support this green shoots effort.  Buy and consume American saved or created green shoots and help save our nations economy while supporting your local non governmentally supported agricultural businesses....

Thu, 01/21/2010 - 12:15 | 200713 Anonymous
Anonymous's picture

Minsky Moments are a bitch. Aren't they? Let the beat down continue.

Massively long gama and short everything but the dollar, and cow dung

Thu, 01/21/2010 - 13:15 | 200810 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

bat dung?

Thu, 01/21/2010 - 13:14 | 200806 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

LiesMan acknowledged Emergency Unemployment?  I have to see this!  Lies Man!

"There are no jobs!" -Celente

Thu, 01/21/2010 - 13:16 | 200811 Anonymous
Anonymous's picture

HOW CAN YOU TRUST A GUY WITH THE NAME MR. "LIESMAN"!??!

HEHEHEH

Thu, 01/21/2010 - 13:57 | 200881 Anonymous
Anonymous's picture

Jobs Guarantee Program coming right up (SoU)

Thu, 01/21/2010 - 16:11 | 201107 Gimp
Gimp's picture

I want one of those government jobs paying $170K plus.

Fri, 01/22/2010 - 22:23 | 203322 Mad About Ewe
Mad About Ewe's picture

A Boarder Guard at the US/Canadian boarder in Vermont starts at $90,000 per year.  That's a job that's basically less challenging than operating a drive through window at McDonald's.  All you have to do is hassle French truck drivers and stoned college kids.  Have you ever seen Super Troopers?

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