Bureau of Labor Statistics

Bank Of America's Latest Decoupling Strawman: Go Long Women

While Goldman Sachs' Jim O'Neill continues to push his theory for decoupling based on an extended developing world, which includes such countries as Nigeria and Iran, to drive global growth as per his recently launched BRIC replacement, the N-11, Bank of America's economics Ethan Harris and Neil Dutta, have taken a far more novel approach to finding "hidden" sources of pent up growth potential: women. Of course, neither dares to admit that the only real source of 'growth' is nothing less than previously unprecedented amounts of monetary stimulus in the form of endless free central bank liquidity. But in every bank's quest to find the missing link in the "virtuous circle" dynamo, we expect increasingly more ridiculous assumptions about what will manage to be a standalone driver for a 4%+ GDP growth for the US. In the meantime, the fact that the underlying "organic" economy, not to mention the stock market, would flounder absent trillions in cheap money supporting all asset prices continues to be resolutely ignored by everyone. Which merely confirms that the Fed will likely never hike rates again, as that would eliminate two years of what will soon amount to nearly $4 trillion in monetary stimulus in the US alone, which in turn represents roughly 25% of the stock market capitalization in the US alone. But going back to why Bank of America is now going long women, here is Harris' summary: "The wounds of the economic crisis will take years to heal. However, we expect female earnings to recover faster than male earnings. In many households, women already do most of the shopping. So, while we remain cautious on the trajectory for consumption, our sense is that women will increasingly drive consumer spending." At least BofA will have someone to blame it all on, when their latest ridiculous "economic" theory collapses in a pile of dust.

Guest Post: The Bennie Who Stole Christmas

Ben Bernanke is a highly educated PhD from Princeton who has never worked a day in the real world since he graduated from college in 1975. His entire life has been spent in the ivory tower of academia surrounded by models and theories that work perfectly in the comfort of his office. After building his reputation as an “expert” on the Great Depression by studying it and reaching the wrong conclusions, he came down from his ivory tower in 2002 to join an organization that has systematically destroyed the value of the US currency, thereby undermining the well being of the once vibrant middle class...If the Grinch had been pimping for a small pack of Grinchsters who impoverished the honest people of Whoville, then the Dr. Seuss poem would have perfectly described Ben Bernanke, the Federal Reserve and the banksters that run the show here in the USA. The actions taken by Ben Bernanke, Alan Greenspan and their brethren on the Federal Reserve over the last quarter century have destroyed the middle class and left senior citizens impoverished, while enriching its Wall Street masters. Now he is stealing Christmas from the hard working middle class of this country.

CPI Prints At 0.1%, Below Expectations Of 0.2%, And Lower Compared To Prior; Empire Manufacturing Comes At 10.6 Versus Expectations Of 5

The two big economic numbers today were a mixed bag: CPI came in below expectations of 0.2%, at 0.1%. Core was in line with expectations of 0.1%, an improvement from the prior 0.0%. Elsewhere, the November Empire Manufacturing index climbed from the abysmal reading of -11.14 (which was largely ignored due to its outlier status), almost exclusively due to a surge in New Orders, which jumped from -24.40 to 2.6. What is troubling is that the Employment index dropped from 9.1 to -3.4, which could be a shift in diffusion indices toward a decline in employment. Then again last month despite a surge in diffusion employment strength, the NFP plunged. So in this version of bizarro world, the worse the employment index, the higher the NFP will likely be. And just as troublingly, priced paid jumped from 22.1 to 28.40: "the future prices paid index was positive and rose sharply, indicating that respondents expected input prices to accelerate." Continuing margin contraction anyone?

JOLTS Reports 3.362 Million Job Openings In October, As Government Workers Cling To Jobs

The JOLTS survey, which looks back two months, and is thus completely useless when trying to game the NFP/Initial Claims number came at 3.362 million job openings for October, an increase of over 350k from September's revised 3,011. Then again with November NFP data being a massive disappointment, one can see why this data tends to have about as much market impact as the iconoclastic ABC Consumer Confidence index, which continues to print at near all time lows. Furthermore, as has been disclosed previously, employers continue to fill all open positions predominantly with temporary positions, which, paying $20k per month, do miracles for the recovery.

Gonzalo Lira And The Boiling Frog: Effects Of QE2 On The Bottom 80% Of The U.S. Population

The recently announced Quantitative Easing 2 policy of the Federal Reserve has had and will have a profound effect on the dollar—and a profound effect on the American people: Especially the bottom 80%. In a word, QE2 will make four fifths of the American people poorer. Bernanke’s stated purpose in QE2 is to spark consumer spending, and thereby reignite the economy. But QE2 will have the paradoxical effect of making basic necessities—food, housing, clothing, transportation—more expensive for everyone. This will mean that basic necessities will take a bigger bite out of household incomes, reducing consumption, rather than stimulating it. So like a frog dropped in a pot of cold water that's had the heat turned up, the American people—especially the bottom 60% to 80% of the population—will slowly be boiled to death in the stew of QE2. —Gonzalo Lira

A Quick Glance At Real World Inflation

The Casey Report provides a useful glance at the real inflation currently ravaging items that are actually purchased by Americans, not those captured by the Fed's BLS statistics: "On average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). From the price at the pump to heating your stove, energy costs are up 23% on average (heating oil, gasoline, natural gas). A little protein at dinner is now 39% higher (beef and pork), and your morning cup of coffee with a little sugar has risen by 36% since last October." Of course, the ongoing deflation in items purchases requiring leverage will continue to skew the CPI so far south to make all those who bought 5 Year TIPS yesterday at negative yields end up losing money on the transaction.

Guest Post: iDepression 2.0

A little reality about the job situation in this country is in order. The unemployment rate reported by the Bureau of Labor Statistics and parroted by the mainstream media is currently 9.6%. Once you stop counting people who have given up looking for jobs and “left the workforce”, discouraged workers, marginally attached workers and workers forced to work part-time, you magically get a 9.6% rate. Using the method of measuring unemployment used during the Great Depression and reproduced by www.shadowstats.com, the real unemployment rate is a depression-like 22.5%. The peak unemployment rate during the Great Depression was 25%. There is no doubt that we are in the midst of 2nd Great Depression, but where are the bread lines and the lines of unemployed winding around the corner? No need. This is the electronic Great Depression – iDepression 2.0. Your 99 weeks of unemployment and food stamps are direct deposited into your bank account so that you don’t have to leave the comfort of your McMansion that you haven’t made a mortgage payment on in the last 14 months. There were no credit cards in 1933. Without a job or a house, you needed to move to where there might be a job. Hence the mass migration from the Midwest to California – ala The Grapes of Wrath. Today, a neighbor in a matching McMansion down the street, with the perfectly manicured lawn, could be unemployed for three years and no one would ever know. They could sustain themselves on unemployment payments, food stamps, and credit cards. Welcome to the iDepression 2.0.

It All Starts And Ends With The USD

There is basically nothing new to add to the picture. Maybe that is why the only thing going on right now is an unabated selling of volatility in both Fixed Income and Equities. The NFP number was slightly disappointing though not horrendous, just enough to convince people we do get QE 2.0 in November and not bad enough to send people into panic. Meanwhile we did get confirmation that 2009 employment figures were in fact worse than reported... in typical BLS tradition one might add. And I thought econometrics models were supposed to have an average deviation of 0 to the series they track! I guess you don't need a statistical backgroup to work at the Bureau of Labor Statistics. - Nic Lenoir

BLS Issues Update On Perpetual Upward Data Bias: 366,000 Overestimate For Year Ended March 2010

The BLS, as part of the NFP report, has issued its preliminary estimate of the benchmark revision, which confirms that the BLS is really just BS. According to the report, for the period ended March 2010, the BLS has overestimated jobs by 366,000 (0.3%), or just over 30K jobs per month. While not as bad as the prior benchmark revision of almost one million for the period ending March 2009, this continue to be a blow to both the credibility and the data tracking capability of the US Bureau of Truth. By industry, the biggest hit was to the trade, transportation and utilities industry (-144K), Manufacturing (-114K) and Leisure and Hospitality (-91K). Luckily, losses in these critical sectors were offset by even more bankers than had been previously expected: Professional and business services ended up being revised higher by 14K.

ADP Plunges To -39K, Well Below Expectations Of +20K

ADP printed at a massive miss of -39K compared to a median consensus of +20K (range of -44K to 75K) . And the cherry on top: the previous number was revised from -10K to +10K, for a monthly swing of a whopping 49K. Everyone hoping for one last pre-midterm NFP hurrah this Friday will be disappointed, unless the Beijinigization of US data is now complete. Of course, this means QE2 is now all but certain. Elsewhere, USDJPY drops solidly to pre-intervention territory, printing at 82.70.

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Explaining The Massive Shell Game That Is The Petrobras IPO

Last week, to much pomp and circumstance, Petrobras IPOed in a $69 billion offering of stock, which was promptly praised by Brazil president Lula as the "the biggest equity offer in the history of capitalism." Yet when one digs through the numbers it becomes glaringly obvious that not only was the "real" IPO one third the size of the vaunted amount, but that a major part of the offering is nothing less than a major shell game, which not only distorts the perception of end demand for the offering for other, more naive investors, but also allows the Brazilian government to lie in open public that it has met its primary account surplus of 3.3% of GDP. Market News has broken down the math works behind what is quickly becoming the biggest act of diversion since the days of Houdini.