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The Truth Behind Today's BLS Report

Tyler Durden's picture


The confidence game in turbo boost mode. The market is oblivious of the underlying data behind today's "better than expected" BLS computer model output. Yet for the few remaining who do care about the increasingly irrelevant fundamentals, we provide some observations. Here are facts from John Williams' Shadow Stats:

July usually sees a regular pattern of planned automobile production line shutdowns to accommodate retooling for the new model year, but recent disruptions to the auto industry have changed pattern this year. Without the usual pattern of shutdowns, the government’s computers nonetheless responded by creating the usual offsetting boost in jobs, not only in the auto industry, but in supporting industries as well. The auto industry itself was alone among durable goods manufacturing industries in showing a reported, seasonally-adjusted monthly gain in July, up by 28,000 jobs. [Would anybody who recently got a job at Chrysler and GM please write us immediately]


While Wall Street likely will hype the July employment results as confirmation that economy has turned the corner, such hype and resulting overly optimistic expectations should be slammed in the months ahead, when the positive reporting distortions reverse out in a normal catch-up process.


The unadjusted annual declines in the June and July payrolls remain the deepest since a similar decline at the trough of the 1958 recession, but still shy of the 4.9% trough seen in the 1949 downturn. When the 1949 annual low growth is broken, most likely next month, the annual percentage contraction in payrolls will be the most severe since the production shutdown following World War II.


- Birth-Death/Bias Factor Adjustment. As discussed in SGS Newsletter No. 51, Birth-Death Model biases tend to overstate payroll employment during recessions. Never designed to handle the downside pressures from an economic contraction, the model adds a fairly consistent upside bias to the payroll levels each year, currently averaging about 76,000 jobs per month. The unadjusted July 2009 bias was 32,000, up from 25,000 the year before, but down from 185,000 in June.

And some observations from David Rosenberg:

U.S. nonfarm payroll surprise but less than meets the eye
Today's employment report is being treated as a 'green shoot' of major proportions. While it was by far the best jobs performance of the year, much of the better-than-expected tally in nonfarm payrolls reflected the bounce in auto production as well as the distortion from the federal census workers. Combined, these two influences effectively "added" 100,000 to the headline number, so net-net, the consensus view of -325,000 was not as far off the mark as the market believed at first glance.

  • Payrolls came in at -247k in July — the consensus was at -325k
  • Upward revisions by 43k to the back data
  • Unemployment rate down to 9.4% from 9.5% (but as in Canada, due to a sliding labour force — down 422k in the U.S.)
  • We are going to see a big increase in industrial production for July — manufacturing workweek jumped 0.8% MoM
  • Income was surprisingly strong — average weekly earnings rose 0.5% MoM (after a 0.3% decline in June)

The auto sector added 28,200 to the industry payroll in July, which was the highest tally in 11 years. To show you just how big that really is, it is a 69% annualized surge. Normally, the industry, which is in secular decline, posts job losses of between 20,000 and 30,000 consistently, so this alone represented roughly a 50,000 swing. We estimate that there was about a 30,000 swing in the rest of the manufacturing sector due to the spillover from the current inventory adjustment in the motor vehicle industry. The 0.3% MoM increase in the workweek was also skewed by the 4.1% MoM jump in the auto sector.

[T]here have been large fluctuations in the federal government payroll too. After hiring a slew of Census workers in the spring, there were 57,000 layoffs in May-June and then we saw in today’s report that 12,000 federal workers were “hired” in July. Again, mathematically, this contributed about 20,000 to today’s headline number. In other words, and we have no intent on raining on anyone’s parade, there was about 100,000 non-recurring payrolls in that top-line figure. It may be dangerous to extrapolate today’s report into a view that we are about to fully turn the corner on the job market front.

To be sure, the drop in the unemployment rate was a surprise, but it was all due to the slide in the labour force — the employment-to-population ratio gives a more accurate picture of the slack in the labour market and the hidden secret in today’s report was that this metric slid to a 25-year low of 59.4% from 59.5% in June and 61.0% at the turn of the year. Of those unemployed, 33.8% of them have been unemployed now for over 27 weeks — a record amount (was at 29.0% in June and was at 17.5% at the start of this recession).

And to conclude with Rosie:

“Bear markets have three stages – (i) sharp down, ii) reflexive rebound, and iii) a drawn-out fundamental downtrend”.

We have little doubt as to which stage we are in today.



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Fri, 08/07/2009 - 13:43 | 29340 Anonymous
Anonymous's picture

Yeah, the amount of "finessing" (to put it charitably) that goes on with the BLS numbers is astounding. John Williams is the man - if you read the story about why he created shadow stats it makes perfect sense.

The manipulated inflation numbers are probably/potentially the most obvious to the sheeple. Sooner or later they'll notice how much more they're paying for the basics (food & energy primarily) They can't escape reality forever.

We wrote about this back in April 2008:

Fri, 08/07/2009 - 13:49 | 29352 ghostfaceinvestah
ghostfaceinvestah's picture

I do admire his work - his number "feel" much more intuitively correct than the official numbers.  Not that I think the BLS is being intentionally false, it's just that their numbers look like what they are - created by committee. Total mess.

Fri, 08/07/2009 - 14:03 | 29400 Anonymous
Anonymous's picture

The government has a vested interest to under report the CPI figures to keep the entitlement programs from growing faster.

Fri, 08/07/2009 - 13:43 | 29343 stockoperator
stockoperator's picture

It should be called BS report from now on.

Fri, 08/07/2009 - 13:54 | 29373 Anonymous
Anonymous's picture

Yes! just drop the "l" from the middle of the name

Fri, 08/07/2009 - 15:36 | 29605 Apocalypse Now
Apocalypse Now's picture

The L actually works, it is the Bull (Laughing) Shit report

Fri, 08/07/2009 - 13:44 | 29344 Anonymous
Anonymous's picture

It seems to me that seasonality has played a role:
the auto sector normally sheds a big number of jobs during the Summer, a less substantial decline means an upswing after seasonal adjustment.


Fri, 08/07/2009 - 13:46 | 29345 Anonymous
Anonymous's picture

Look, I am not nearly as bearish as most of your readers but today's run up is seriously sick. There is no way that the market ought to be this high (but I've said the same thing since S&P 900).

Will hide in cash until this is over.

Fri, 08/07/2009 - 13:46 | 29346 Anonymous
Anonymous's picture

I believe in Rosie but I also believe they will keep fudging these numbers forever to trick the average dumbass american that things are better somewhere in the country, just not in your neighbourhood.

Fri, 08/07/2009 - 14:01 | 29394 zeropointfield (not verified)
zeropointfield's picture

sure. once you start such a thing, you cannot just stop. they have to do it to the bitter end.

Fri, 08/07/2009 - 17:18 | 29733 Anonymous
Anonymous's picture

Question -

There was no S&P 500 in the Great Depression.

Does anyone know what Rosie is referring to in his graphs?

Sat, 08/08/2009 - 13:06 | 30361 TheDreadPirateR...
TheDreadPirateRoberts's picture

There are two things you can look at. One is the DJIA, which I believe will show the same general pattern. Two, the SPX has been 'historically reconstructed' by S&P by backward chaining it to the S&P 90, a predecessor index which did exist at the time. I believe SPX came about in 1957. So, it's not perfect, but it gives you the flavor.

Fri, 08/07/2009 - 13:46 | 29347 Anonymous
Anonymous's picture

That is sort-of cherry picking the data to conform to one's hypothesis. Look at the troughs in 66, 70, 75, 82, 87, 90, 98 -- the "reflexive rebound" led to new highs.

Fri, 08/07/2009 - 14:09 | 29416 Cheeky Bastard
Cheeky Bastard's picture

you must be either new or a 12 yo kid to think that those recession have any similarities with this depression ...

Fri, 08/07/2009 - 14:52 | 29513 Anonymous
Anonymous's picture

The back-to-back recessions in the early 1980s were similar to today's recession. Unemployment was over 10% for 4 years (and that's using the fake numbers that are rosier than reality). There was an S&L mess due to bad lending practices and loose regs. True, inflation was in the double digits, unlike now, but that was not a good thing, especially if you were unemployed.

Fri, 08/07/2009 - 15:04 | 29540 Cheeky Bastard
Cheeky Bastard's picture

yes in the early 80s, but that recession was a inventory recession, not a credit one + there was no where near the amount of leverage like in this one, industrial base was still there to get us out + you had banking regulation in place, you had non-computerized exchanges and statistics was counted in a different manner ... people should really understand that this depression is something new, unpredictable and no one knows how will it behave as a system ...

Fri, 08/07/2009 - 15:15 | 29565 Anonymous
Anonymous's picture

You seem to be remembering some other period.

Deregulation was one of the big things that led to the S&L crisis back then. And FSLIC was understaffed so the few regs in place weren't enforced. (Sound familiar?) Also, the industrial base was shrinking rapidly. The big move to a service economy was already underway and was a big contributer to the high unemployment rate. There were no industrial jobs being created, they were rapidly disappearing. The stats were different but they're always changing those. The big changes in the way unemployment, etc. is calculated had already been made because they needed to fudge the numbers so things didn't look as bad as they were.

Every recession is new. Are you suggesting that there is no point in looking at history?

Fri, 08/07/2009 - 15:29 | 29592 Cheeky Bastard
Cheeky Bastard's picture

the industrial base was at least 50% stronger than it is today; and you really can not compare S&L crisis with what happened here. I agree that there is a reason to look into past recession for some similarities, but there is no point in full comparison between recession X and recession Y. It makes no sense, those are both chaotic patterns and can not be matched or repeated because the circumstances were different. Also I agree that there were no industrial jobs being created, but the labor force was smaller and the percentage of the industrial jobs was higher than it is today. Today even the number of those employed in manufacturing is smaller than the number of those that were employed in manufacturing during the 80s. The problem is that the 80s were financially simple times, and 2000s, with all the de-regulation which was set up in the New Deal, are a complex system of interlocking actions and reactions; it is simply unpredictable. Plus in the 80s you didn't have underwater mortgages, or negative equity on your home, the derivatives were no where near as important as they are today, and are hidden from the masses like some nuclear time bomb . Again, i know that every recession is new because the system from which emerges is far more complex than the the system from which the previous recession has emerged, but what we have here is a quantum leap in complexity and I'm pretty sure even those who are on top of all this have no fucking clue what is  happening, and that is visible from their actions; transforming the economy from main street to wall street because it is far more easy to manipulate that market and give an illusion of improvement ..

Fri, 08/07/2009 - 19:46 | 29885 Anonymous
Anonymous's picture

Cheeky, I'd venture to say that your ancestors were making the same exact argument you are back in the day. If you haven't, you should read Kindleberger for some perspective. I do think there's some merit to your point, but the larger structure of these bubbles/bursts/manias/panics are always the same.
I enjoy following the salient, coherent discussions like this that still occasionally pop up on ZH. Reminds me more of the .blogspot days...


Fri, 08/07/2009 - 19:58 | 29893 Cheeky Bastard
Cheeky Bastard's picture

thank you for your book recommendation, i have just DL it.

And i would like to add, that my comments were a bit sloppy, i was primarily thinking of econometric comparison of the recession X to recessions Y,Z,E,G etc, not how they are formed etc. i fully agree that there are joint parameters which contribute to forming bubbles, recessions and depression, there is no denial about that; but, again, what my problem is, especially with charting comparison is the presupposition that the recession X must follow some pattern, and that comparing the full cycle of recession Y to the time passed in recession X will give us a clear picture about the systemic behavior of recession X. i believed it is flawed, and not economically usable, unless we are using averages gathered from the econometric observation of previous recessions, and i don't think that is useful because that kind of method smooths the volatility of intra-circular behavior of a recession we use as a basis of our comparison.

Fri, 08/07/2009 - 20:43 | 29930 Anonymous
Anonymous's picture

I certainly understand your point and I definitely agree that when training a microscope on specific timeframes and/or events of one downturn compared to another, we're going potentially lose much of the correlation we (thought(?) we) had initially.
To site a very recent example that I presume many ZH readers can relate to: what are your thoughts on Peter Borish's data from 'Trader' showing the insane correlation between 1929 and 1987? Was it just coincedence? A self fulfilling prophecy?
He was off by a few months with respect to his prediction of the actual slide but it was pretty close. Also, at that time, a lot of blame was put on 'program trading' being a culprit which wasn't available, in place and maybe not even thought of in '29.

I guess ultimately I have two points I'm trying to make based on my perspective of things:

1) I believe that every time there's been a situation like this, many people (active participants, by-standers, un-informed and otherwise) have viewed the event as being 'different', 'unlike anything' they've seen, 'much worse' than they've experienced, etc. Generationally speaking, none of us or those who experienced these before us have a whole lot of real-world reference to lean on. We've got the books and words of others who perceived the events a certain way, but beyond that it's difficult to truly understand and embrace how recession X and recession Y are acting similarly or differently

2) Regardless of the intricacies of how the market is reacting during the slide/bubble/burst or rise/mania, my feeling is that it is certainly helpful to try and understand it as much as possible but for the purpose of capitalizing on it. Sure, some of us may want to know how all the moving parts interrelate and become part of the whole so that it may be prevented in the future, but, if time/history is any reference for us my money is on this type of thing happening again...and again...and again...I hope to be able to take advantage of and leverage the opportunities that arise during this volatile time to be even more financially prepared for the next one.

Please keep in mind, this is just one person's perspective posted out here without any claim whatsoever of knowing more than the next guy.


Sun, 08/09/2009 - 01:13 | 30709 Anonymous
Anonymous's picture

presumably ancient rome had it's own experiences with various forms of boom and bust.

then they hit a megaconvergence of cycles, which led to their fall.

are we there? it's too soon to tell, but we're clearly dealing with some pretty big cycles converging here- unprecedented leverage, a world awash in fiat, peak oil, population explosion, resource scarcity, peak food, increasing geopolitical complications, climate change, and nuclear proliferation to name a few.

while i agree that these things seem to follow a template, every time plays out 'the same but different'.

personally, i feel like i'm traveling back in time. 1st stop will be the 1970's. will we regress to the depression? 1907? 1873? 1863? only time will tell.

Fri, 06/25/2010 - 00:28 | 432932 velobabe
velobabe's picture

cheeky, i again want to reach out to you.

in a motherly sort of way.

you have much to prove†

Sat, 08/08/2009 - 03:25 | 30245 Anonymous
Anonymous's picture

michigan gov needs billion to fund part supply no lending to wit antwhere else. gd

Fri, 08/07/2009 - 13:47 | 29348 Anonymous
Anonymous's picture

So then what's the actual story? Is the labor market continuing to get worse? I can see the government massaging the numbers to make them look better, what US administration hasn't in a recession - but is the government somehow hiding 500,000 lost jobs from the public?

Fri, 08/07/2009 - 14:02 | 29365 Miles Kendig
Miles Kendig's picture

More like 3,000,000 when consideration is given to those whose hours have been cut to part time but do not get reflected in the U3 or U6.

Fri, 08/07/2009 - 13:57 | 29384 Gordon_Gekko
Gordon_Gekko's picture

More like millions.

Fri, 08/07/2009 - 13:47 | 29350 ghostfaceinvestah
ghostfaceinvestah's picture

I can't speak to the overall economy as a whole, but I am fully confident to speak to the housing and mortgage industries - they are going to be horrible in the fall.  The "turnaround" in housing is due almost entirely to the confluence of seasonal factors/buying season, the foreclosure moratoriums, Fed stomping down mortgage rates, and the FTHB tax credit.  Of those, only the FTHB tax credit is still in place (and due to expire in Nov, though it will, of course, be extended).

Being a three month moving average, the Case Shiller number released next month will show yet another increase in house prices, as the mix of REOs is decreased in the front month vs the back month, but in the actual market, the pain is going to resume, and the Case Shiller number will resume its decline by the Sept release.

As for the stock market, or the overall economy, who knows?  I just know that Bernanke's money printing is going to have to continue if he wants to hold down mortgage rates even at this level, there is very little bid for agency MBS outside the Fed.  That money will go somewhere, so staying long commodities seems like a good play to me.

Fri, 08/07/2009 - 16:18 | 29655 Gordon_Gekko
Gordon_Gekko's picture

Yup, especially PM's.

Fri, 08/07/2009 - 18:39 | 29813 steve from virginia
steve from virginia's picture


Right ... the only number that matters is $70 a barrel.

Fri, 08/07/2009 - 19:56 | 29890 Anonymous
Anonymous's picture

Steve, I hear you on this, but did you see the Wednesdays EIA report? I've have to assume that the fundamentals have GOT TO have an effect again at some point. My guess is most likely Oct/Nov when the Northeast heating season comes around again.
If things keep on the same pace they're on now, there'll be so much crude on hand we'll have to physically mop it up with worthless US dollars.

Fri, 08/07/2009 - 13:56 | 29354 Miles Kendig
Miles Kendig's picture

Baghdad Bob now works for the BLS!  That is a contract employee from CNBC to assists the BLS with interpreting labor market variances.

Fri, 08/07/2009 - 13:50 | 29356 Anonymous
Anonymous's picture

There is going to be one might dash for the exits, but like the Nasdaq bubble the mania could go on for a long time yet! And if the bubble is being blown up with the help of government spin and free money it could go seriously high before it blows up in a catastrophic way

Fri, 08/07/2009 - 14:10 | 29418 Anonymous
Anonymous's picture

You hit the nail on the head, its being blown by govt (read Fed swap) money. And it could go alot higher, fundamentals be damned.

I would not want to be short here. On the other hand, I'm hesitant to jump into a market the fundamentals don't support.

Fri, 08/07/2009 - 13:51 | 29357 Anonymous
Anonymous's picture

What's up with the divergence in technology?

SPX and INDU have printed fresh highs for the "new bull market" yet COMPX, NDX, and SOX (notably, SOX is down on the day) are still trading below the highs.

Tech more or less powered the rally thus far. No longer I guess. Hmmm..

Fri, 08/07/2009 - 13:51 | 29358 kote
kote's picture

The BLS guys must be former GE auditors.

Fri, 08/07/2009 - 13:52 | 29360 perpetual-runner-up
perpetual-runner-up's picture

400,000 people dropped out of the in reality we are looking at -600k...

combine the dropping out of the workforce with the population control in the healthcare plan and we will be able to get our arms around this....

what people dont realize is that older people were never meant to collect on social security - it was a scam from the start to get money in the door - the average life expectancy was so low when it started....

Now the only way the dems feel we can deal with the long term cost of social security and medicare is to start letting the older population die out....when you stop contributing, you are gone....literally...

after they get the healthcare plan passed AARP is going to realized it was used because they are going to raise the collection age for social security...

Fri, 08/07/2009 - 13:55 | 29378 Anonymous
Anonymous's picture

So they get a nice headline number on the back of that and call it a green shoot!!

What a complete joke

Fri, 08/07/2009 - 13:59 | 29390 Neophiliac
Neophiliac's picture

The first line is not accurate. Where that number comes in is in the unemployment rate. These people have not lost jobs now: they lost their jobs some time ago and just gave up on looking.

TD used to have a good habit of posting broader unemployment rate.

Fri, 08/07/2009 - 13:52 | 29363 Anonymous
Anonymous's picture

There are going to be a lot of people eating crow some time in the next 6 months. Right now too many vested interests are in denial of reality and using the government's ( our) money to try to maintain the status quo.

Fri, 08/07/2009 - 13:59 | 29389 trillion_dollar...
trillion_dollar_deficit's picture

Agreed. But, let them have their fun. It may be the last bit of fun anyone has for a long time. You cannot backstop a $14 trillion economy and run trillion dollar deficits without serious implications down the road. There is no free lunch.

Fri, 08/07/2009 - 13:53 | 29367 Anonymous
Anonymous's picture

The valuation of the S&P is at nosebleed levels based on earnings, or rather lack of them but as long as they beat low bar estimates they mugs are willing to pay through the nose for them.
The scam will keep going as long as there is another fool to sell to, when the next fool wakes up and sees the market for what it is and doesn't buy.....

Fri, 08/07/2009 - 13:54 | 29370 Commissionable
Commissionable's picture

TD, your insight is very interesting, I will have a multitude of respect for your recent blogs when we see that 3rd stage you speak of, and we dont launch to 10,500 DJIA and 1200 S&p

Fri, 08/07/2009 - 13:54 | 29372 Neophiliac
Neophiliac's picture

A job is a job. Census, auto-workers - whatever: we should take what we can get now. The growth in the auto industry may not recur, but then we might have similarly non-recurring growth in non-residential construction spending due to what TD and Rosie would call 'distortive government stimulus spending'. This is all cherry-picking.


I say, take the numbers as they are. There are always problems in how the numbers are tabulated and there is always some non-recurring data point out there. Still there is no need to search for hidden problems (which makes this blog look a bit like it's trying too hard to find problems in this economy,and when you try to hard, you tend to undermine the whole message). The problems are staring us in the face. Specifically: where the hell is the fuel for the recovery is suppose to come from? It won't be from the 400,000 discouraged workers who just left the workforce, that's for sure. Nor will the economy grow thanks to falling incomes.

Fri, 08/07/2009 - 13:55 | 29379 Gordon_Gekko
Gordon_Gekko's picture

Whoever gives a s--t anymore what the report says?

Fri, 08/07/2009 - 13:55 | 29380 Anonymous
Anonymous's picture

As more time passes, more people will care about the fundamentals as they will be living them each day. That is a prediction which I feel very confident making. If you have a job right now, be very grateful. I don't give a rats ass what tripe the BLS trots out about UE, Employment, the job markets. I get to experience the truth each day and . . . it sucks. Cheers!

Fri, 08/07/2009 - 13:56 | 29381 Anonymous
Anonymous's picture

One worry I have is that the sheer size of the financial services sector relative to the whole economy is further severing any connection to physical fundamentals. With so many livelihoods depending on moving money from one account to another, how can the market not do anything but go blindly up at this point? You have alluded to this "panic buying" several times recently.

Although, on the flip side, the "fundamental drawn-out downtrend" could represent the de-financialization of the economy to a certain extent when these guys get wiped out one way or another.

Any idea about % of economy that is financial services now compared to 2000-2003 and 1929-1930?

US stock indices no longer represent an economy- they ARE the economy. A genuine recovery could very well be when stock markets are no longer looked as as a measure of economic recovery.

Fri, 08/07/2009 - 13:57 | 29385 Anonymous
Anonymous's picture

And ironically, they're all insolvent.

Fri, 08/07/2009 - 16:29 | 29659 Gordon_Gekko
Gordon_Gekko's picture

"US stock indices no longer represent an economy- they ARE the economy."

Sure, but only imaginary one. The stock market no longer represents ANYTHING happening in the REAL economy/world. The disconnect between the stock market and reality will only become apparent to the majority when DJIA is at 1,000,000 yet the food shelves in all the stores are empty. Welcome to the United States of Zimbabwe.

Fri, 08/07/2009 - 13:56 | 29383 Anonymous
Anonymous's picture

A quarter of a million people are no longer working! YAAAAAAAAY! Companies must be worth more!

Fri, 08/07/2009 - 14:16 | 29435 ghostfaceinvestah
ghostfaceinvestah's picture

think about that - 250K more people not work, but the unemployment rate goes down?  only one way for that to happen - the workforce shrinks.

how does the workforce shrink?  is our population shrinking?

Fri, 08/07/2009 - 17:47 | 29766 Sqworl
Sqworl's picture

You moron...people spend less and less product purchased from cos...

Fri, 08/07/2009 - 13:58 | 29386 Anonymous
Anonymous's picture

Hell, the Oh-man already admitted unemployment is going to 10% and Redd is out saying they will extend Unemployment benefits again so those on that can keep eating dog food.
What's not to like here it's all priced in.

Fri, 08/07/2009 - 14:17 | 29437 ghostfaceinvestah
ghostfaceinvestah's picture

why do they need to extend benefits?  the unemployment rate is dropping.

Fri, 08/07/2009 - 17:52 | 29771 Sqworl
Sqworl's picture

There are no jobs and people need to eat! Look at the 36M on food stamps???

Fri, 08/07/2009 - 13:58 | 29387 Anonymous
Anonymous's picture

Doesn't anyone actually look into these jobs figures when they buy this joke of a rally?
No of course not, like they don't look at earnings or yields or fundamentals of valuations or anything like that. As long as it has fast movement up then just buy it, just like the dotcom days or tulip collecting

Fri, 08/07/2009 - 14:00 | 29392 Anonymous
Anonymous's picture

Not to be a Monday morning quarterback. I have been a bear since May and have gotten killed. But one needs to look at the level we reached 666. That was probably an over reaction because the end of the world was near according to MSM. Taking a look at where we are at, these levels are reasonable to where the economy is (maybe a little high). I do believe that we are heading down the wrong path for the future. I just think that one has to be careful from a trading standpoint from the conspiracy theories, etc from ZH. I love the info provided as it is not available anywhere else, but as a trader DO NOT let ZH get in your way of trading. It has affected my trading negatively, but I have no one to blame but myself. We know about all the irrational things going on in the markets, govt, etc. It just makes us prepared in the future unlike the masses. But in the mean time pocket some money and don't get scared off from all the info here at ZH. Trade what's there and not what you think is right, because you have missed the party like I have.

Fri, 08/07/2009 - 14:09 | 29414 somethingisrotten
somethingisrotten's picture

I have to disagree with your last statement. This party has been using strange drugs; do not partake in them or the consequences could be very bad for you if you system has no tolerance.

Fri, 08/07/2009 - 14:13 | 29425 speculator
speculator's picture

That's right. Know the fundamentals: Read ZH, Mish, Rosenberg, etc., but trade the technicals. The best technician since 2007 has been Prechter, and he just said to go 50% short, allowing for a bit more run-up.

Fri, 08/07/2009 - 14:19 | 29440 somethingisrotten
somethingisrotten's picture

I am in this camp. I always leg in and out of my positions; so I have currently legged in short by 66%.  This is the system that works for me in both bull and bear markets.

Fri, 08/07/2009 - 14:21 | 29443 Anonymous
Anonymous's picture

there are no technicals here, just printing more money. Forget about shorting - this is gonna last much longer and make you much poorer

Fri, 08/07/2009 - 20:24 | 29915 Anonymous
Anonymous's picture

" a trader DO NOT let ZH get in your way of trading."

Exactly so. It has never been more important to (not) invest on fundamentals, and trade (if you must) on technicals, and to not confuse the two. Smoke-and-mirrors? Of course. But it can still be traded. The second thing to remember is that in the end, the fundamentals always win.

Fri, 08/07/2009 - 14:01 | 29395 Anonymous
Anonymous's picture

Second wave approaching.

So far the drop in jobs has come mostly from manufacturing and construction. This has now moderated and may in fact bounce back a little.

But the impact of lower incomes will only be more slowly felt in the services industries (the majority of employment). To date losses have been far less in percentage terms. With retail spending down, travel down, and restaurant visits down, it is only a matter of time before these flow through to fewer jobs, setting off a new spiral lower.

In addition state and local governments have just started to lay off folks. Watch for this part of wave 2 to hit in the next couple of months as well. Note: sate and local government payrolls have been almost flat for months. Does anyone think this can continue with the plunge in revenues being experienced at the state and local levels.

Fri, 08/07/2009 - 17:14 | 29727 Anonymous
Anonymous's picture

We have manufacturing in the country?? I had no idea.

Fri, 08/07/2009 - 14:03 | 29401 ex ante
ex ante's picture

you guys still don't get it - the market doesn't care about economic data, it's lagging, we'd be up today regardless of the payroll number - quit looking in the rear view mirror



Fri, 08/07/2009 - 14:08 | 29413 Anonymous
Anonymous's picture

Well, at this rate markets must be looking ahead to 2100 when cold fusion is commercialized

Fri, 08/07/2009 - 14:16 | 29433 Anonymous
Anonymous's picture

Quite true - the fallacy is actually believing that stock market performance is correlated to economic fundamentals. It is a correlation that is used by the big players to give excuses for predetermined buying and selling strategies.

Fri, 08/07/2009 - 14:06 | 29406 zeropointfield (not verified)
zeropointfield's picture

confidence game
a scheme in which the victim is cheated out of his money after first gaining his trust



Fri, 08/07/2009 - 14:06 | 29407 Anonymous
Anonymous's picture

This presumption that these seasonal factors are going to reverse this data with sharply unfavorable reports in months upcoming is very dangerous. The BLS can simply announce in about a week that the complaints they have received about those adjustments have been heard and they will correct them for months upcoming. This will stop the reversal and generate more positive reports.

Fri, 08/07/2009 - 14:06 | 29408 Anonymous
Anonymous's picture

Why are insiders selling at the rate they are if this was all green shoots?

Fri, 08/07/2009 - 14:07 | 29410 Anonymous
Anonymous's picture

Not so fast please,we need our bonus and we do not care about unintended markets consequences
Credit Suisse decided last year to use leveraged loans and commercial mortgage-backed debt, some of the securities blamed for generating the worst financial crisis since the Great Depression, to fund executive compensation packages. The Zurich- based bank, which sidestepped the worst of the credit crunch, posted a 29 percent increase in second-quarter profit last month as revenue from trading stocks and bonds double

Fri, 08/07/2009 - 14:07 | 29411 Anonymous
Anonymous's picture

One strong impression I get about all this data manipulation is how short-term it is. The crap they're doing now cannot make any difference six months from now. It's all "How can we fool them today?"

To solve the economic problems of the U.S. will require some long-term thinking and a dedicated, long-term effort to improve the business climate. I don't see any of that from our "leaders."

Psychological studies show that a big difference between criminals and non-criminals is that criminals think and plan in a very short time horizon. As they make their bad choices, they do not think about next week, or even tomorrow.

Our "leaders" decisions show a pattern of similar short-term thinking.

Fri, 08/07/2009 - 14:13 | 29426 Anonymous
Anonymous's picture

How is all this data manipulation going to create any real jobs?
Improvement in wages, less debt? So people can have real money to spend more junk they don't need or want?

Companies have to have real buyers not pretend made up numbers in order to grow their business.

Fri, 08/07/2009 - 19:37 | 29881 Apocalypse Now
Apocalypse Now's picture

It's scarier than that.  The 2006 executive order allowed chosen firms to avoid being subject to GAAP accounting.  Then GAAP accounting allowed companies not to mark to market since those figures were so bad.  Then we find out from deepcapture that crooks have been able to do naked short selling as well as purchase more shares than exist (DTCC is supposed to reconcile existing shares?).

The printing presses can completely manufacture a recovery in the interest of national security - they can add 1's and 0's to company financials per the executive order, and you are already seeing the figures being modified in released economic statistics.  Next stop companies financials.

Where will the market go?  Wherever they want it to - how do you invest in that environment - you can not invest but you could speculate.

Fri, 08/07/2009 - 14:16 | 29429 Dixie Normous
Dixie Normous's picture

It's one day at a time, just hold off bigger problems and just maybe time will heal all wounds.

Fri, 08/07/2009 - 14:37 | 29485 Bob
Bob's picture

Sociopaths rule in virtually all areas of public life, increasingly so as money and/or power increase. 

Penny-ante criminals are just lower class, with few resources and limited tools to use profitably in crime (though arguably with some actual need.)   

Funny how people with money bitch about welfare and blue collar crime . . . but it certainly diverts attention from them and their buddies, the people who cost us a million times more.   

Fri, 08/07/2009 - 18:52 | 29830 Anonymous
Anonymous's picture


I've worked in an organisation trying to foster economic development. It happens business by business. The stock market was a sideshow - not the main game.

Wall Street and the Fed believe the stock market and banking (lending) is way more important than it really is in an economy. Obama has bought in to this simplistic view.

Fri, 08/07/2009 - 14:10 | 29417 Anonymous
Anonymous's picture

With everyone, including Obama, talking about a 'jobless recover', the improved U3 number was just what the market needed to sustain the next up-leg. It was obvious looking back at it now.

Fri, 08/07/2009 - 14:16 | 29431 zeropointfield (not verified)
zeropointfield's picture

well oiled propaganda machine works perfectly until the end.

Fri, 08/07/2009 - 14:12 | 29422 bpj
bpj's picture

What's next to come out of Washington, that Fred Flintstone  really didn't  know at the time he ordered those ribs they were going to tip his car over?

Fri, 08/07/2009 - 19:15 | 29856 Anonymous
Anonymous's picture

(you didn't get enuff luv for that little gem) +1

Fri, 08/07/2009 - 14:14 | 29427 Anonymous
Anonymous's picture

The government numbers are flawed for sure.

Fri, 08/07/2009 - 14:16 | 29432 Anonymous
Anonymous's picture

I would like to see the most recent data on state income tax revenue. Those numbers will provide a more accurate picture of the economy...

Fri, 08/07/2009 - 14:23 | 29450 Anonymous
Anonymous's picture

here an accurate picture for you - more money - higher stock prices

Fri, 08/07/2009 - 14:24 | 29454 Fish Gone Bad
Fish Gone Bad's picture

I drove by Home Depot today.  The street is lined with illegal aliens.  They have not been counted in the unemployment numbers.

Fri, 08/07/2009 - 14:27 | 29461 Anonymous
Anonymous's picture

I find it hard to believe the unemployed will be able to sustain or improve GDP. Smoke and mirrors...smoke and mirrors...

Fri, 08/07/2009 - 14:30 | 29467 Anonymous
Anonymous's picture

Oh look GS price is down 1% today of all days!! LOL

Fri, 08/07/2009 - 14:36 | 29483 Anonymous
Anonymous's picture

I wonder why Rosie's S&P chart ignores the explosive rally that happened in July?

Fri, 08/07/2009 - 14:42 | 29497 carbonmutant
carbonmutant's picture

Bulls are beginning to foam at the mouth.

Fri, 08/07/2009 - 14:43 | 29498 molecool
molecool's picture

“Bear markets have three stages – (i) sharp down, ii) reflexive rebound, and iii) a drawn-out fundamental downtrend”.
We have little doubt as to which stage we are in today."

Agree with the stage. Also would like to suggest that the first leg of this bear market (i.e. cycle wave a) occurred between 2000 and 2007 and was actually not as steep as the initial lower degree leg of the leg (i.e. cycle wave c) we are in right now. Which means on a higher degree level we are painting a pattern Elliotticians refer to as a flat - unlike in a zigzag correction the c wave in this pattern is far steeper and far longer than the initial a wave. Food for thought - there are similarities between the 1929 crash (i.e. zigzag) and the current secular bear market (i.e. flat) but if you think 2008 was bad - you ain't seen nothin' yet....

Fri, 08/07/2009 - 14:49 | 29508 Anonymous
Anonymous's picture

GS Share in RED TANKING NOW!!! Its a leading indicator!!! Get your short orders ready guys!!!

Fri, 08/07/2009 - 14:58 | 29525 D.O.D.
D.O.D.'s picture

Guys, enough already the recession is over, it was a bump in the road that everyone got all stirred up about, and now it's fixed.. jeeez just a bunch of Debbie Downers, can we focus on what's important, football season is comming up....GO SAINTS!! I'm gettin' season tickets with my killing in FAS....

Fri, 08/07/2009 - 15:16 | 29568 Anonymous
Anonymous's picture

Pretty amazing GS price is going down now?

Weird or what!

Someone found something out that they shouldn't have been doing, naughty naughty, not all those flashy front running and other things?

Fri, 08/07/2009 - 15:18 | 29574 Anonymous
Anonymous's picture

Buffet getting out of GS perhaps? Doesn't like to be associated with them any more?

Fri, 08/07/2009 - 15:22 | 29580 Anonymous
Anonymous's picture

wow todays close will be intersting

Fri, 08/07/2009 - 15:45 | 29615 Anonymous
Anonymous's picture

GS not able to push the market up at close, cos something going on?

Fri, 08/07/2009 - 15:52 | 29626 Silver Bullet
Silver Bullet's picture

Some more insight from one of our former labor secretary:

Fri, 08/07/2009 - 17:07 | 29718 Project Mayhem
Project Mayhem's picture

All you need to know is in BLS Unemployment Report, Table A.12, Figure U-6, "not seasonally adjusted."   Unemployment is at 16.8%,  the same as last month.


Fri, 08/07/2009 - 17:16 | 29731 johngaltfla
johngaltfla's picture

Statistics are so easy to manipulate when you have willing accomplices. Add in the hundreds of thousands who mysteriously are no longer in the work force and voila, you're at 10.1% with U-3.


Thanks ZH for posting this thread, it saves me a lot of time reading later on.-:)

Fri, 08/07/2009 - 19:45 | 29884 Sqworl
Sqworl's picture

Here is the truth about everything that is being reported!!!!!

Fri, 08/07/2009 - 20:48 | 29936 Anonymous
Anonymous's picture

Where is david rosenberg writing this stuff? Link please?

Fri, 08/07/2009 - 20:48 | 29937 Anonymous
Anonymous's picture

Where is david rosenberg writing this stuff? Link please?

Fri, 08/07/2009 - 22:56 | 30024 agrotera
agrotera's picture

Hmmmmmmm... i wonder if there is another executive order like executive order 12631, which allows the commissar president, to use his czars to "use all means possible, adjust government statistics to make sure that order is maintained and to prevent fishy angry mob behavior."

Sat, 08/08/2009 - 10:10 | 30297 Chumly
Chumly's picture

Liquidity-insolvency, which is the foundation of this crisis, has not gone away.  It is just a matter of time before it boils over again and move us into another phase of this depression.      

Sat, 08/08/2009 - 13:15 | 30369 Anonymous
Anonymous's picture

Everyone here cherry picks from the data (ie: excluding this, excluding that).....the point remains that while things are still bad they have markedly improved over the preceding 4 months. I agree that the seasonal adjustment may have obfuscated to a certain degree, but to not acknowledge any improvment from the ~700K prints early this year is ridiculous. Plus there were unadulterated positives in the data (wages, hours, etc).

I am not bulled up with the S&P at these levels, but some are just being intellectually dishonest.

Sat, 08/08/2009 - 20:58 | 30595 Anonymous
Anonymous's picture

Is that 'BLS' or 'BS' ?

I'm getting confused about this lately.

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