As the chart below shows, while the US may have, somehow, recouped all of its post-recession job losses as was widely trumpeted everywhere on Friday, it sure didn't achieve this courtesy of a vibrant hiring labor market. In fact, as the chart below show, while the US may have recovere its annualized job change number, per the non-farm payrolls survey, of just about 2.4 million, or about 200K per month, the pace of US hiring is still just about half of where it should be based on the pre-recession trends.
just who is America's police force, and by extension the Obama administration, which is behind this quiet militarization of local police forces with weapons that would normally be seen in a warzone, preparing for war against?
As we pondered the new normal and the disappointed anchors on CNBC this evening noting that we did not hit S&P 2,000 or Dow 17,000 (but there's always tomorrow); two headlines crept across the Bloomberg feed that could not have been more perfectly timed representatives of the new normal record highs in stocks:
- *COVANTA CUTTING JOBS
- *COVANTA TO BOOST CASH DIV TO 25C-SHR FROM 18C, EST. 18C
Here's a tip for management: as a cost-cutting initiative, maybe don't spend 'cash' on buybacks at record highs and invest in productive assets, instead. Of course, that's silly-talk in the world where work is punished; as CVA's stock is jumping after-hours.
While Morgan Stanley's lower-than-consensus economic expectations for the US economy splits the difference between an economy where people remain hesitant to take on risk, essentially extending the post-crisis pall, and one where they embrace risk in the manner of a more typical post-WWII cyclical expansion; their alternative scenarios (at either corner of the goldilocks world) make one wonder just what the catalyst will be to release the kraken of better-than-subpar growth...
With today being a non-POMO day (more a YOYO - you're on your own), we suspect the spike in stocks following what was by all counts a mediocre jobs print will not last (until that is it has banged 1950 in cash and taken Goldman's targets out). Bond yields spiked and are now 2bps lower... bad news is good news, good news is good news, and mediocre news is good news... welcome to the new normal...
The Rich Get Richest: Household Net Worth Rises To All Time High Courtesy Of $67 Trillion In Financial AssetsSubmitted by Tyler Durden on 06/05/2014 13:33 -0500
Another quarter, and another confirmation that in the New Normal only the rich get richer, pardon: richest.
Borrowing heavily from Albert Edwards "Ice Age" analogy of our new normal, PIMCO's Bill Gross, after explaining why he does not have a cell phone, discusses the "frigidly low" levels of "The New Neutral" in this week's letter. Confirming Ben Bernanke's "not in my lifetime" promise for low rates and a lack of normalization, Gross explains that the "the new neutral" real policy rate will be close to 0% as opposed to 2-3% (just as in Japan) leaving an increasingly small incremental rise in rates as potentially responsible for popping the bubble. Gross concludes, "if 'The New Neutral' rates stay low, it supports current prices of financial assets. They would appear to be less bubbly," clearly defending the valuation of bonds knowing that he can't expose stocks as 'bubbly' without exposing his firm to more outflows.
7 In 10 Americans Believe The Crisis Is Not Over Or Worst Is Yet To Come: 52% Can't Afford Their HomesSubmitted by Tyler Durden on 06/04/2014 20:31 -0500
According to a recent survey by the MacArthur foundation, during the past three years, over half of all U.S. adults (52%) have had to make at least one sacrifice in order to cover their rent or mortgage. Such sacrifices included getting an additional job, deferring saving for retirement, cutting back on health care and healthy foods, running up credit card debt, or moving to a less safe neighborhood or one with worse schools. More disturbingly, the survey also found that while there are some indicators that the American public’s views about the housing crisis are shifting toward the positive, large proportions of the public are not feeling the relief: seven in 10 (70%) believe we are still in the middle of the crisis or that the worst is yet to come.
One of the things that this era of American history will be known for is conspicuous consumption. Even though many of us won't admit it, the truth is that almost all of us want a nice vehicle and a large home. They say that "everything is bigger in Texas", but the same could be said for the entire nation as a whole. We live in a debt-based system which is incredibly fragile. We experienced this firsthand during the last financial crisis. But we just can't help ourselves. We have always got to have more...
Considering that both key overnight news reports: the Chinese HSBC PMI (printing at 49.4, vs 49.7 expected) and the Eurozone CPI print from a few hours ago (print of 0.5%, down from 0.7% and below the 0.6% expected), we find it odd that futures are red: after all this is precisely that kind of negative data that has pushed the market to record highs over the past five years. And speaking of odd, considering the ongoing non-dis-deflation in Europe, the fact that Bunds and TSYs are being sold off today makes perfect sense in a New Normal bizarro world.
There was a small ray of hope just after the Lehman collapse that one of the most deplorable characteristics of US society - the relentless urge to build massive McMansions (funding questions aside) - was fading. Alas, as the Census Bureau today confirmed, that normalization in the innate desire for bigger, bigger, bigger not only did not go away but is now back with a bang. According to just released data, both the median and average size of a new single-family home built in 2013 hit new all time highs of 2,384 and 2,598 square feet respectively.
US equities dipped after the initial ISM data (and construction spending miss) as did USDJPY but soon after things began to levitate in their new normal manner as bad news is clearly pent-up good news in the future. By the time the ISM admitted its error - the US equity markets had recovered back to unchanged from 10ET's initial print. But what was really moving - since in our new normal world, a shift in the butterfly's wings of US ISM (seasonally adjusted) causing a hurricane (or Tsunami) in stock markets across the world, Japan's Nikkei 225 swung from low to high by over 150 points as the carry-trading algo monkeys reacted to every conflicting headline (and broke BATS).
Welcome to the new normal reality of job-hunting in 2014... "Our venture-funded vertical-driven content prosumer phablet platisher is rapidlygrowing and we need to add some Ninja Rockstar Content Associates A.S.A.P. See below for a list of open positions!"
While dealers are telling their clients to dump the long end due to everyone mispricing economic growth and inflation prospects, and to expect the long awaited curve steepening any minute now, what are they doing? They are the flattest they have been in two and a half years! In other words, buying.