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Huge Miss In Initial Claims Follows Last Week's Seasonally-Driven Beat

Tyler Durden's picture





 

So much for last week's shocking beat in Initial Claims, which as a reminder printed at 350K on expectations of 372K, driven by the July 4 holiday and, what we described were "onetime factors such as fewer auto-sector layoffs than normal likely caused the sharp decline." This week the initial claims soared right back to 386K on expectations of a 365K print: so last week's 22K beat was promptly reversed following this week's number- a miss 21K above expectations. And of course, last week's 350K was upward revised to352K. Of note is what we said last week: "the Not Seasonally Adjusted claims number rising by 70K is very much irrelevant." Sure enough, this week the unadjusted number rose even more, by 10.8K to 453K, just 13K below last year's number of 470K. This compares to the 32K difference from a year ago for the seasonally adjusted numbers. That this stinks to high seasonally adjusted heaven needs no observation. Finally, people for whom extended claims expired soared by 84K in one week, as those on EUC 2008 benefit is imploding with each week. Overall, a very ugly number, but not horrible enough yet to send the S&P up 100 on imminent NEW QE.

 

 


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Thu, 07/19/2012 - 08:44 | Link to Comment spastic_colon
spastic_colon's picture

Futures higher despite.....(fill in the blank)

Thu, 07/19/2012 - 08:49 | Link to Comment John Law Lives
John Law Lives's picture

More layoffs allow companies to lower COGS and help them to magically meet (or beat) EPS projections despite falling revenue.  Heavily massaged corporate EPS and the hopes for more QE... the BS that keeps the machine churning...

100% FUBAR.

Thu, 07/19/2012 - 09:23 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Correct.  Also notice that suppliers of real goods (wheat, corn, etc.) are defaulting on contracts to deliver.  Paper is paper, but when supply chains get cut, shit gets a lot more real in a fucking hurry.  You can keep your paper, we will keep the corn and eat (or sell it to a higher bidder).  Yeah this will end well.

Thu, 07/19/2012 - 10:24 | Link to Comment MachoMan
MachoMan's picture

Yeah...  the grain companies will claim that they purchase the farmer's crops and then sell it to a third party and don't benefit from the appreciation in the interim.  I suspect this is true for the most part, but SOMEONE benefits from the appreciation. 

Water costs are killing farmers atm...  many need to hit a home run on crop prices to come out.  The only up side is that crops got in so early this year, many will be harvested soon...  depending on locale, they might even get in 2 primary crop harvests this year...

I would encourage all farmers to review their contracts VERY VERY carefully.  There are plenty of ways to declare default by the other party, but obviously this depends on the contract terms and the facts of the case...  The downside to this approach is that the company purchasing your grain will black list you for bailing...  if there are limited players in your area, this might not be an option.

This type of thing seems to happen an aweful lot lately...  the price booms after farmers sold all their crops (before planting).  I foresee more on-site storage/drying...  and personal marketing (gotta do something in the off season, no?).  The amount farmers sell at the beginning of the season will decrease to take advantage of the ramp.

Thu, 07/19/2012 - 09:40 | Link to Comment GeezerGeek
GeezerGeek's picture

The statement about lower COGS helping EPS projections leads me to wonder: if there are fewer goods sold, there should be lower associated COGS. Would that be helpful to meeting or beating EPS projections? Nancy Pelosi, with her abundant knowledge of economics, would probably answer in the affirmative, and add that companies can dramatically lower COGS by not producing any goods at all, and that would be good. Lower COGS means more profits in her world, I think, just like more people getting food stamps is stimulative.

I agree: 100% FUBAR.

Thu, 07/19/2012 - 08:49 | Link to Comment stocktivity
stocktivity's picture

Fill in the blank...ok...until they stop printing money out of thin air and kicking this mess further down the road, It's all Bullshit!!!  Rally on.

Thu, 07/19/2012 - 08:48 | Link to Comment reader2010
reader2010's picture

it don't matter anymore. just curious how was DAX behaving like under Führer.

Thu, 07/19/2012 - 08:48 | Link to Comment The Duck Stops Here
The Duck Stops Here's picture

Ben Bernanke "there will be no QE unless things get bad"
Market participants "That means he'll step in when we get the S&P to 1500, BUY!"

This is the weirdest market where good is good, bad is good, meets expectations is bad. I'm going to a Roulette table and putting all my money on Purple 36.

Thu, 07/19/2012 - 08:48 | Link to Comment The Axe
The Axe's picture

It doesn't matter is CORRECT....Only computers programed to vanquish all that stand before them...markets are broken   Spain could go to 8%  No one cares...Morgan could lose a fortune...No one cares   VIX could be delisted to the pink sheets..No one cares...China could close 4000 factories this year...thats a SOFT landing.... No one cares..CTL P

Thu, 07/19/2012 - 10:18 | Link to Comment Nobody For President
Nobody For President's picture

Honey Badger don't give a shit either.

Thu, 07/19/2012 - 08:48 | Link to Comment BeetleBailey
BeetleBailey's picture

My prediction? In time (fill in the blanks as to when) - this will be looked on as the "Great Manipulation" by a cabal of criminal bankers and politicians.

Unless people responsible for this get indicted and prosecuted and convicted, it is the end of retail trading, as well as public investments.

Thu, 07/19/2012 - 09:40 | Link to Comment Quinvarius
Quinvarius's picture

And they will go on to explain how the manipulation resulted in the fall of the west, and it was why the Jews were rounded up again--Same reasoning as last time.

Thu, 07/19/2012 - 08:49 | Link to Comment disabledvet
disabledvet's picture

Certainly enuf to tank the dollar and send commodity prices up across the board tho. Huh...you'd think a double dip recession would lower prices.

Thu, 07/19/2012 - 08:52 | Link to Comment james larson
james larson's picture

So instead of reporting the past two weeks as both >than 440,000...we got to celebrate a seasonally manufactured 4 Year low and and an unexpected jump in most recent week of 34,000.  I get it now.  Like check kiting but honest.  Yup.

Thu, 07/19/2012 - 08:53 | Link to Comment Need More Cowbell
Need More Cowbell's picture

They won't sell it until Apple has to lower guidance - I can't wait!

Thu, 07/19/2012 - 08:54 | Link to Comment stocktivity
stocktivity's picture

More koolaid coming from the Fed. As Schumer told Bennie this week - "Get to Work"!

Thu, 07/19/2012 - 08:56 | Link to Comment warchopper
warchopper's picture

The sentiment, and chart patterns, during the period of 4/29/11 to 8/15/11 is nearly identical to the current pattern which started around 4/6/12.

The market fails right when everyone believes it won't.  

Thu, 07/19/2012 - 09:05 | Link to Comment Shizzmoney
Shizzmoney's picture

I love how the schill economists blame this on "seasonal auto layoffs".

Is unemployment insurance needed? Yes, it is an important safety net.  But it does not help an economy grow, Ms Pelosi.  And it does not provide a wage that can keep up with the obligations men and their families are expected to live up to today, espeiclaly with rising rents, healthcare, and overall cost of living.  Nevermind the disposable income that creates new capital and small business.

In the end, a safety net is just that - a net.  Nets can break, but foundations of brick and mortar security for the working class not only continue to decline, but simply don't exist.  Some on the right may celebrate this, but when THEY can't afford food, housing, oil, etc....they'll one day wake up and find some random dude rummaging through their fridge and say, "What happened?".

The average baby boomer has been brought up to be a cuckold: to enjoy the fact that their fascist corporate master are slowing finger raping their wallets dry, and the corporate propaganda only adds to the majority of those defending this bullshit system.

I expect the DOW to be up today due to more "corporate profits" (otherwise known as "accounting magic").

Thu, 07/19/2012 - 09:05 | Link to Comment roadhazard
roadhazard's picture

With all the people falling off extended benefits there will be a huge rise in theft and blood in the streets. People got to live somehow.

Thu, 07/19/2012 - 09:09 | Link to Comment pazmaker
pazmaker's picture

Thus the increase in people filing for permanent disability with Social Security and increase SNAP(Food Stamp users)  They won't be in the streets they just get a handout from the government in another form.

Thu, 07/19/2012 - 09:05 | Link to Comment Flakmeister
Flakmeister's picture

New top-shelf article at the Drum:

Evidence that Oil Limits are Leading to Limits in GDP Growth

http://www.theoildrum.com/node/9343

Thu, 07/19/2012 - 09:13 | Link to Comment LawsofPhysics
LawsofPhysics's picture

No mention of agricultural producers defaulting on wheat and corn deliveries either.  Fuck the paper, we will keep the corn and eat. Now shit will get a bit more real.

Thu, 07/19/2012 - 09:38 | Link to Comment Flakmeister
Flakmeister's picture

Umm.... Not sure what this had to do with GDP but I do concur....

If 2013 is as bad as what the underlying trends suggest it will be, the world AG complex will be stressed in a way that it never has before....

Thu, 07/19/2012 - 10:22 | Link to Comment LawsofPhysics
LawsofPhysics's picture

What is has to do with GDP is simply a reflection of fewer real goods being traded or sold or exchanged between market participants.  This means more bullshit accounting games have to be played in order to get the GDP numbers required to make everything look like all is well.

Thu, 07/19/2012 - 09:08 | Link to Comment Meesohaawnee
Meesohaawnee's picture

use to be were CNBS was only needed for data with the mute on. Now data means nothing so click to the cartoon channel. Oh wait i already had it on. I keep thinking everyday if i were an Econ professor at a large expensive university what would i tell my students? Id have to resign. No way i could teach a class and keep a straight face.

Thu, 07/19/2012 - 09:10 | Link to Comment otto skorzeny
otto skorzeny's picture

I took an econ class last semester and the an hour into the 1st class the prof  startes gushing over J M Keynes.  The next day I went and got a refund.

Thu, 07/19/2012 - 10:03 | Link to Comment GeezerGeek
GeezerGeek's picture

CNBS = Cartoon Network B.S.? It's easier to watch (or so I'm told) if you hit the 'mute' button.

Some inventor should create a television that can do double duty as a dart board.

Thu, 07/19/2012 - 09:11 | Link to Comment RobotTrader
RobotTrader's picture

I'm amazed how the market keeps shaking off all the bad news, week in, week out.

 

There have been at least 8,478 stories posted here on Zero Hedge the last 3 years warning of catastrophe, dislocation, meltdown, etc. and the tape keeps shucking it off.

Thu, 07/19/2012 - 09:16 | Link to Comment Deep79
Deep79's picture

Ya i Know crazy hey Robo.

Where is the market, oh ya, May 99 levels. Wow awsome.

throw in a bit of inflation adjusted, I am up HUGE. Wait a minute.

Your getting lame Robo.

 

 

Thu, 07/19/2012 - 09:23 | Link to Comment SheepDog-One
SheepDog-One's picture

Robo is amazed by shiny costume jewelry baubles too....its so bad his mom cant even take him to the Dollar General store anymore.

Thu, 07/19/2012 - 09:19 | Link to Comment sabra1
sabra1's picture

and.... you've commented on ZH 8,478 times, thinking you're the only one with a computer! why, you're like the Ted Baxter of ZH!!!!!

Thu, 07/19/2012 - 09:20 | Link to Comment HurricaneSeason
HurricaneSeason's picture

$4 Trillion in deficits can accomplish that. They are about to take the TARP off, though. You're saying the dow will finish the year 5% to the good?

Thu, 07/19/2012 - 09:55 | Link to Comment Village Smithy
Village Smithy's picture

What you don't realize is that for the little people those stories of "catastrophe, dislocation, meltdown, etc." have all come true. The "tape" as you call it represents the fortunes of the monied class and yes through the borrowing of trillions of dollars from this countrys' future, it has been well protected and continues to grind higher.

Thu, 07/19/2012 - 10:09 | Link to Comment LooseLee
LooseLee's picture

"There have been at least 8,478 stories posted here on Zero Hedge the last 3 years warning of catastrophe, dislocation, meltdown, etc. and the tape keeps shucking it off."....

 

That's called 'manipulated markets' dipshit. Welcome to the USSA!

Thu, 07/19/2012 - 09:19 | Link to Comment Never One Roach
Never One Roach's picture

 

U.S. Public-Pension Shortfall $4.6 Trillion, Group Says

U.S. public pensions are $4.6 trillion short of the amount of assets needed to cover projected liabilities, an advocacy group said. That’s more than twice what Moody’s Investors Service estimated this month.

The average plan is 41 percent funded, State Budget Solutions said in a report today.
http://www.bloomberg.com/news/2012-07-18/u-s-public-pension-shortfall-4-...
Thu, 07/19/2012 - 09:27 | Link to Comment monopoly
monopoly's picture

This is all so absurd. Anyone trading this market has a death wish.

Thu, 07/19/2012 - 10:05 | Link to Comment GeezerGeek
GeezerGeek's picture

Or inside information.

Thu, 07/19/2012 - 09:28 | Link to Comment Joe Davola
Joe Davola's picture

Once again, I'm sure this was weather related - the unemployed flocked to the air conditioned UE offices to get out of the heat.

Thu, 07/19/2012 - 09:32 | Link to Comment miker
miker's picture

1)  Violent crime markedly up in Charlotte NC; numerous random murders; some in "good neighborhoods and "areas" of the city.  City leaders and police perplexed by sudden spike.

2)  Very possible companies laying off more to sabotage Obama's reelection.  Based on this possibility, I predict numbers to go over 400K soon.  Romney is one of them and will protect their fiancial intersts.  Of course the irony is that everything will likely go down anyhow. 

 

Thu, 07/19/2012 - 09:39 | Link to Comment Snakeeyes
Snakeeyes's picture

Dodd-frank is on target to be 30,000 pages. And we wonder why jobs are NOT coming back? Obama/Dems are regulation and tax crazy.

http://confoundedinterest.wordpress.com/2012/07/19/jobless-claims-rise-dodd-frank-likely-to-be-30000-pages-when-complete-and-we-wonder-why-jobs-are-not-coming-back/

Thu, 07/19/2012 - 09:40 | Link to Comment Never One Roach
Never One Roach's picture
Drought Now Burning Pig Farmers, Too

 

“You can’t just not feed your animals. And you can’t just up and sell them because we only have markets for market-sized animals,” Struthers said. The heat not only suppresses crops but it makes it harder for hogs to gain weight.

 “Based on the futures prices, we’re going to be selling livestock below the cost of production. Any time it costs you more to produce something, you’re losing money,” he said.

 

http://www.cnbc.com/id/48230065

 

Oink oink.

Thu, 07/19/2012 - 10:11 | Link to Comment GeezerGeek
GeezerGeek's picture

"Any time it costs you more to produce something, you’re losing money."

Whoever said that is smarter than 98% of public officials and bureaucrats. Another 1% apparently think it's good for private companies to lose money.

Thu, 07/19/2012 - 10:23 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"Another 1% apparently think it's good for private companies to lose money."

well it is, especially when they get a fucking bailout from the taxpayer.

Thu, 07/19/2012 - 10:26 | Link to Comment Nobody For President
Nobody For President's picture

You guys fail to understand that you make it up on volume...

Thu, 07/19/2012 - 09:43 | Link to Comment Meesohaawnee
Meesohaawnee's picture

a complete utter fraud monoploy.. its just the norm these days.. a third world counry we have become. nothing can be trusted anymore. every single asset class has been rendered a propaganda tool. at best

Thu, 07/19/2012 - 10:02 | Link to Comment Snakeeyes
Thu, 07/19/2012 - 11:02 | Link to Comment Temporalist
Temporalist's picture

It's okay the jobless print is just an aberration according to trusted news sources like blmbrg:

"The volatility in the numbers was due to a change in the timing of annual automobile plant layoffs, a Labor Department spokesman said as the data were released."

 

Thu, 07/19/2012 - 10:06 | Link to Comment FieldingMellish
FieldingMellish's picture

Time to start redefining what an "initial claim" means. Then they can beat expectations every week.

Thu, 07/19/2012 - 10:32 | Link to Comment Nobody For President
Nobody For President's picture

Look at it this way, you damn pessimists: after EVERYONE is laid off, new unemployment claims will drop to zero = Dow and S&P to the moon!

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