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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 | Link to Comment gookempucky
gookempucky's picture

Can I borrow 20 bucks from anybody ?

Thu, 01/21/2010 - 10:05 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 10:15 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 10:39 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 14:46 | Link to Comment Anonymous
Thu, 01/21/2010 - 10:40 | Link to Comment perchprism
perchprism's picture

 

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

Thu, 01/21/2010 - 11:24 | Link to Comment Anonymous
Thu, 01/21/2010 - 15:25 | Link to Comment Anonymous
Thu, 01/21/2010 - 10:43 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 11:01 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 15:40 | Link to Comment Anonymous
Thu, 01/21/2010 - 11:38 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 11:12 | Link to Comment 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 | Link to Comment swmnguy
swmnguy's picture

+1

Thu, 01/21/2010 - 11:34 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 14:24 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 11:41 | Link to Comment bugs_
bugs_'s picture

Piled higher and deeper.

Thu, 01/21/2010 - 12:05 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 13:06 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 13:15 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

bat dung?

Thu, 01/21/2010 - 13:14 | Link to Comment 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 | Link to Comment Anonymous
Thu, 01/21/2010 - 13:57 | Link to Comment Anonymous
Thu, 01/21/2010 - 16:11 | Link to Comment Gimp
Gimp's picture

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

Fri, 01/22/2010 - 22:23 | Link to Comment 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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