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JPM's Feroli Continues On His Doom And Gloom Tour, Anticipates Negative Private Payroll Growth For August

Submitted by Tyler Durden on 08/26/2010 12:11 -0400

It is becoming increasingly apparently that Wall Street forgot to take its collective Lithium this month. After putting the kibosh on the "growth in 2010" thesis, Jim Hatzius started off a wave of downgrades like no other, (incidentally, just as we predicted on August 6: "Look for all other sell-side "strategists" to lower their economic outlook in kind, and the 2011 S&P
consensus to decline accordingly." - so far so good), setting off the herd of groupthinking Wall Street lemming economists into a direction they loathe, yet which even permasomethings like Joe LaVorgna are forced to acknowledge is inevitable. And as of yesterday, it is stating to appear that JPM is now solidly in second place after Goldman in its economic outlook: first the strategist said that the "disastrous" durable goods number would result in sub 1% Q3 GDP growth, which is even worse than Goldman's forecast, while today he was just quoted by Bloomberg as saying that private payrolls likely fell for the first time in eight months.

From Bloomberg:

Employers are reluctant to take on more staff until they see more evidence of durable growth, keeping unemployment near a 26-year high and holding back the consumer spending that makes up 70 percent of the economy. A Labor Department report next week may show that private payrolls failed to grow in August for the first time in eight months, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York.

“If capital spending does weaken further, then that raises some concerns about labor demand and whether firms want to increase hires,” said Feroli, who reckons the odds of a recession have increased in the past two weeks to about one-in- three. A decline in private payrolls “would raise some concern about whether the recovery is proceeding or not. If you see a couple of months of decline you’d be more confident that we actually were in a recession.”

Is it once again cool to be a bear? While we appreciate the sudden truthiness out of Messrs Hatzius, Feroli and LaVorgna, we hope they realize that their compensation is intimately tied in with the banks' capability of extending the ponzi, and avoiding the destructive deflation that could easily require TARP v2 to come to the scene in bailing out banks leveraged to the gills in mismarked CRE loans... although whether or not the bank rescue act passes for a second time is a far more tricky question.

h/t papa swamp

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Thu, 08/26/2010 - 12:25 | 545985 Cognitive Dissonance

The Doom & Gloom Nationwide Alchemy Tour has only just begun. Of course, watching and reading these sad missives is always a wonderful study in feigned reluctance and disappointment to discuss bad news.

"We really were very optimistic that every economic (and bonus) fantasy we've ever believed in over the past 40 years would continue to be supported by an increasingly accommodative Fed. It's always worked in the past and while you should never use past results to predict future performance, we always do so.

Sadly, and with extreme reluctance, we are coming to the conclusion that Fantasy Island has been canceled by the Gods and the viewing lineup for the foreseeable future will consist of endless re-runs of "Truth and Consequences".

One a more positive note, we are confident that our paychecks and bonuses will not be materially affected."

Thu, 08/26/2010 - 12:31 | 546005 carbonmutant

I think I hear Judy singing Somewhere Over the Rainbow....

Thu, 08/26/2010 - 12:39 | 546017 Cognitive Dissonance

Not exactly the fat lady singing but close enough for The Wizard Of Oz aka The United "Banana Republic" States of America.

http://www.youtube.com/watch?v=QhzbzwPNgXA

Thu, 08/26/2010 - 12:51 | 546031 carbonmutant

LOL

Thu, 08/26/2010 - 14:25 | 546284 jmc8888

They should bring back, 'To tell the Truth' as well.

Three People, and only one is really a Bankster that stole it all from you, your family, your friends, your country, and everyone who died fighting for it. Which one is it? #1, #2, or #3.

Thu, 08/26/2010 - 17:00 | 546701 carbonmutant

I'm betting on "Queen for a Day" in which the GSEs take turns handing out free mortgages to "politically correct" underwater home owners.

Thu, 08/26/2010 - 12:38 | 546015 SV

Why is it they abhor the use of the D-word...? When these type of cheerleaders embrace it, it will be too late for the Sheeple to run for cover.

Thu, 08/26/2010 - 14:04 | 546218 curbyourrisk

Only once they complete the theft from said sheeple with they not care about the use of the Depression word. At that point, there will be no tomorrow for a large portion of the American populus.

Thu, 08/26/2010 - 12:46 | 546026 ShaneAshton