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JPM: "Smells A Little Like Tapering"

JPM's chief US economist Michael Feroli smells the November jobs report, smells the Fed's balance sheet, and concludes "smells a little like tapering."

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Japan Secures Final Passage Of Secrecy Bill - Designed by Kafka & Inspired By Hitler?!!

Shinzo Abe secured final passage of a bill granting Japan’s govt sweeping powers to declare state secrets. The Bill won final approval of the measures at about 11:20 p.m. Tokyo time after opposition parties first forced a no-confidence vote in Abe’s govt in the lower house. The first rule of the pending Japan’s Special Secrets Bill is that what will be a secret is secret. The right to know has now been officially superseded by the right of the government to make sure you don’t know what they don’t want you to know. It might all seems like a bad joke, except for the Orwellian nature of the bill and a key Cabinet member expressing his admiration for the Nazis, "just as Germany needed a strong man like Hitler to revive defeated Germany, Japan needs people like Abe to dynamically induce change."

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Quote Of The Day: The 7% Target, Er, Threshold

As equities celebrate today's better than expected jobs report (for now), apparently comfortable in the knowledge that it's good-enough-but-not-too-good, we are reminded that just six short months ago, none other than the Fed chairman himself uttered these crucial words during his June 19th press conference:

"...when asset purchases ultimately come to an end the unemployment rate would likely be in the vicinity of 7%"

So here we are at 7.0%... and no taper in sight as excuse after excuse is rolled out for keeping the floodgates open. Whocouldanode? This appears to right up there with "subprime is contained", "nobody really understands gold", and "tapering is not tightening." But still we are supposed to give great credibility to their forward guidance?

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On The CIA's Role In Nelson Mandela's 1962 Arrest

While we don't want to detract in any way from the world's mourning the passage of one of 20th century's most luminary personalities, we can't help but be confused by the hypocrisy exhibited by certain members of the US government. The reason: it was none other than the US government-controlled Central Intelligence Agency that was instrumental in Nelson Mandela's 1962 arrest that resulted in his 27 year imprisonment on Robben Island.

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RANsquawk Weekly Wrap - 6th December 2013

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The Real US Unemployment Rate: 11.5%

Applying a realistic labor force participation rate to the unemployment rate series, shows that the real US unemployment rate is now 11.5%, a 4.5% difference from the reported number, and the second highest ever, only better compared to October's 4.7%.

Tyler Durden's picture's Latest Glitch: Unusable Medicaid Data

Just when you thought it was safe to step back into the water of the "fixed" Obamacare website, another glitch, this time in sending data on Medicaid, has The Center for Medicare and Medicaid Services writing a memo to the 36 states using the federal website last week acknowledging the information wasn't being transferred automatically and saying another system was being developed to send it. Potentially affecting tens of thousands of Medicaid recipients, ABC reports, "Essentially, if you're a consumer on, it will tell you you're eligible for Medicaid and the state agency will take care of it, but there's no real way for the state Medicaid agency to know anything about it." The information, according to AP, is incomplete with regard to verifying eligibility and as South Carolina's HHS Director notes, "it's going to be a gigantic logistical mess."

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Consumer Confidence Surges; Beats By Most On Record

Of course, why not. University of Michigan Consumer Confidence jumped from 75.1 to a preliminary 82.5 beating expectations by the most on record. While we remain below the July 2013 highs, current conditions soared to the highest since May and the economic outlook spiked to the highest since August. This is the biggest absolute improvement in current conditions since December 2008.... and that ended well eh?

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November Payrolls Rise By 203K, Higher Than Expected; Unemployment Rate Drops To 7.0%

Last month, the expected NFP print was 120K, instead we got 204K. Today, the expectations was 185K, while the print, was almost an identical 203K, even as last month's was revised modestly lower to 200K. The unemployment rate dropped from 7.3%, which was also below the 7.2% expected, to only 7.0%. The unemployment rate was derived from a drop in the number of unemployed from 11.3K to 10.9K, while the labor force rose from 153.8K to 155.3K, which also led to a modest bounce in the labor force participation rate which rose from a 35 year low of 62.8% to 63.0%.

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Peak Smog: Shanghai Orders Cars Off Roads As Pollution Literally Off The Charts

“It’s horrible out there,” notes one resident as an orange-level haze alert, the second highest, remained in effect broadly across China and, as Bloomberg reports, the heavy fog shrouding Shanghai caused widespread flight cancellations and sent the air quality index surging past 500 to the “beyond index” category. “The pollution is worse today and the fog is getting heavier,” another noted, and despite the WHO concerns that outdoor air pollution can cause lung cancer, he is "not prohibiting my kids from going outside because we have to learn to grow up in all kinds of environment. But they are definitely wearing face masks.” The government has ordered 30% of government-used vehicles off the road and industrial companies to reduce or halt production.


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Jobs Added By Industry: Education, Transportation And Retail Winners; Information And Finance Losers

Curious where the November jobs gains and losses were, broken down by industry? The chart below should explain it all.

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Gold Gets Jobs Leak Early Again?

It wouldn't be a non-farm-payrolls (or for that matter any government report) without the ubiquitous "early" move in precious metals before the report is given to the general public. As Nanex shows, Gold's price moved in a 'correct' downward (taper-on) way on the "good" news that jobs are 'improving' 7 seconds before the report hit...

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"Good" News Sends Markets Into Schizophrenic Dysphoria

Stocks initial knee-jerk "good news is bad news" reaction was a 0.5% plunge in prices and the rest of QE-sensitive assets also reacted in a "taper" way with gold dropping, USD soaring, and bond yields spiking.  But the USD strength implied JPY weakness and that just provided the momo ignition for carry traders to lift stocks 1% straight up as the heads-I-win, tails-you-lose trade continues. Gold has retraced some of its losses but the USD and bonds are stil under pressure as the US open approaches.

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Biggest Drop In Personal Income Since Feb 2010 Can't Stop Borrowers Spending, While Savings Rate Plunges

US personal income fell 0.1% MoM - missing the +0.3% expectations by the most since September 2011 - but that didn't stop spending which modestly beat expectations at +0.3%. The drop in incomes is the largest (absent the 2012 year-end debacle) since February 2010. Given the disparity, it is hardly surprising that the savigs rate dropped to its lowest since June. So unsaving is the route to freedom once again as borrowing helps drive durable good spending up 0.77%

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Charting Today's 30K "Make Or Break" Payroll Difference In "Seasonally Adjusted" Context

Today's nonfarm payroll number critical "make or break" margin, as estimated earlier by Deutsche Bank's Jim Reid, is a tiny 30K: "anything above +200k (net of revisions) will lead to a further dip in risk as taper fears intensify and anything less than say +170k will probably see a decent relief rally after a tricky week for markets." Goldilocks of course will be the expected 185K but what economists forecast rarely if every happens. So it is likely that what the BLS reports will either be good for the economy and horrible for market, or vice versa. So we decided to put this 30K in context. The charts below show both the average and the annual seasonal adjustment between the unadjusted and the final, adjusted nonfarm payroll print. In the past decade, the average November seasonal adjustment is the highest of all months, amounting to 1.165 million jobs! In other words, the 30K critical difference will fit nearly 40 times in just what the BLS' Arima X 13 smoothing simulator adjusts the actual print by in order to get what it believes is the appropriate trendline, ignoring entirely that in the New Normal all historical seasonal adjustments are no longer applicable.

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