And For Today's Primetime Event (No, Not Santelli v Liesman): Gary Kaminsky Wipes The Floor With Mark ZandiSubmitted by Tyler Durden on 02/04/2011 15:18 -0400
What is the only thing better than the neverending Liesman-Santelli Saga (7 minutes into the clip), where Rick is correct once again (check our previous observations on the huge spread between the SA and NSA U-6 number)? First runner up - David Malpass saying "I really think there is an improvement in the economy though you can't see it." But the undisputed winner is Gary Kaminsky telling administration lapdog Mark Zandi (who is trying so hard to be a shoe in for the Tim Jeethner replacement position) he is full of it (3 minutes into the clip). Luckily, a defensive Moody's "strategist" (of the same grating [sic] agency that downgraded Egypt on the Monday after the revolution) has tipped his cards:"here's an intrepid forecast for you, I'll put myself on the line. Next month, because of the weather effect we are going to get a 250k-300k print." Ok Joe Biden. And when you are proven wrong again, as usual, can everyone please relegate your worthless ramblings to the same predictive compost heap as the ADP's irrelevant private payrolls number? And of course, none of this is relevant. The economy will certainly triple dip in April just in time to set the stage for QE 3 (pardon QE 2 Lite).
"There is no doubt that the weather exerted a major impact — wouldn’t the consensus have realized that ahead of time? It’s not new news that January was a terrible weather month and that the data would be impacted. Then again, yesterday all we heard on CNBC was how the chain store sales data were unaffected by the inclement weather, but somehow the labour market was! Go figure. Maybe instead of looking for work, people were choosing to stay warm in the malls and spend their extended unemployment insurance cheques and newly received payroll tax deductions. What an economy!" - David Rosenberg
US Needs To Generate 246,600 Jobs A Month To Get To Pre-Depression Employment By End Of Obama Second TermSubmitted by Tyler Durden on 02/04/2011 14:15 -0400
Every time we revise the attached chart, its looks worse and worse. The first time we did an analysis of how many jobs per month the US has to generate each month to get back to the same payroll number as of November 2007, right before the start of the Greater Depression, and when accounting for the 90K/month natural growth to the labor force, something the administration continues to blissfully ignore (with the labor participation rate plunging to a 26 year low) it was in the mid 220s. As of today, the number is almost quarter of a million, or 246,600. That is how many jobs the US has to generate every single month until November 2016, or the end of Obama's improbable second turn, for the unemployment rate to get back to where it was when accounting for population growth. And while this is obviously impossible, one other thing that is concerning is that post the revised NFP numbers, not only do we now get a lower cumulative low of all jobs lost, at just over 8.6 million attained in February 2010, but as the highlighted area demonstrates, the recent trend in jobs is one of accelerating deterioration. If in the offchance it were to, gasp, snow in February, March will likely have the first negative NFP print since September. Oh yes, post today's revisions, we now learn that the months June through September actually lost jobs (granted, inclusive of census adjustments). One thing is certain: 5% unemployment will not be back for the next 5 years. 100% guaranteed.
US Afternoon Briefing - Stocks, Bonds, FX – 04/02/11
Jim Rogers Tells CNBC To Change Its Name To CommoditesNBC, Sees Oil At $150, Is Short Nasdaq ETFs, Expects More Governments To CollapseSubmitted by Tyler Durden on 02/04/2011 12:51 -0400
Jim Rogers, in his latest interview, cuts right to the chase: "I don't own many equities, because I don't know what is going to happen in the world economy. I expect more currency turmoil, more social unrest, more governments collapsing. So I am investing in currencies and commodities rather than stocks." Pretty much like everyone else, as we have been suggesting for quite a while. Rogers snaps at the trademark CNBC question of what he would be investing in: "I have been explaining to everybody on CNBC for a year and half or two now that food prices are going to go through the roof, they're going to explode. We have serious shortage of everything developing, including shortages of farmers... The average age of farmers in one major agricultural state is 58 years old. In 10 years it will be 68 years old. In parts of Japan they have no farmers... It takes 7 years for a coffee tree to mature. Orange trees, palm trees: you don't just suddenly snap your fingers and suddenly get some more palm oil. All of this takes time." So all those who believe that the surge in people rushing to fill the ag arbitrage holes will produce immediate results, may need to wait 3-7 years, dependant on access to manure.
The latest rumor rocking the commodity space is that Hank "M.A.D" Mubarak will resign. We are not sure where this rumor has originated from but it is wreaking havoc on the oil complex, and by sympathy, on all commodities, and risk assets as well. That is coincided with the end of a POMO that had a 4 S/A ratio only confirms the weakness in stocks. On the other hand, the snapback rally once this wave of optimism dies down could be vicious. Keep an eye on Reuters for confirmation of any Mubarak news.
Today's NFP data has sent the treasury complex in a tizzy: the 30 year has now lost its support levels and the yield is up 6 basis point to 4.72%. And since this move would have been expected in the case of a huge NFP beat ('economy improving' rhetoric), but not on today's atrocious result (and if the BLS needs the services of snowy apologists, like DB'a LaVorgna whose only job lately is to explain why economic data are subpar due to the motion of celestial bodies, perhaps it needs to refine its seasonal adjustment to account for snowfall in, gasp, winter), this is merely yet another indication that the long-end vigilantes are once again making a push for an outright QE3 announcement, a development which was predicted by Zero Hedge at the time QE2 was launched.
Today is Egypt's D-Day: the longer the demonstrators wait to depose Hank Mubarak, the more impossible their mission becomes. Time is on Mubarak's side, and no matter how noble the cause, protesters have to eat... Which means they need to get the infrastructure going, which means they will have reliance on the financial system, which means the status quo will return. Which is why unless they succeed in their mission today, or this weekend at the latest, chances for real reform grow slim. So far today, the protests have been very peaceful and organized, and completely televized. Below are streams from the AP and Al Jazeera for those who wish to follow what is still the most important development in the world.
"I am writing to let you know that after nine great years, I have decided to return all external capital back to you, our partners, by the end of the first quarter of 2011. I will continue to manage the funds as CIO until the capital is returned. This was a very difficult decision for me and I want to thank those of you who supported me and provided valuable advice along the way. I especially want to thank those who supported SCP's recent structural changes by committing over $5 billion in capital. After much consideration, I believe this is the right decision for me, for our people and for you."
Persons Not In Labor Force Who Want Job Now Jumps To All Time Record; Real Unemployment Rate At 12.8%Submitted by Tyler Durden on 02/04/2011 10:35 -0400
Probably the last chart to bury any doubt about just how truly horrible today's employment data was, comes from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now. The number just hit 6,643K, a jump of 431K from December, and the highest number in history. These are people that would send the unemployment rate to about 12% if they were in the labor force. Nothing else needs to be said.
Underemployment Divergence: Seasonally Adjusted U-6 Drops To Two Year Low, As Non-Seasonally Adjusted Surges To One Year HighSubmitted by Tyler Durden on 02/04/2011 10:11 -0400
And another curiously divergent dynamic: looking simply at the Seasonally Adjusted underemployment rate (U-6), which came at 16.1%, or the lowest since April 2009, and one might be excused for assuming that there is a silver lining, somewhere. That is, of course, until taking a look at the sister, NSA series. At 17.3%, this was the highest number since March 2010, and higher than just 3 months in the history of this series.
At 64.2%, the labor force participation rate (as a percentage of the total civilian noninstitutional population) is now at a fresh 26 year low, the lowest since March 1984, and is the only reason why the unemployment rate dropped to 9% (labor force declined from 153,690 to 153,186). Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year! As for the numerator in the fraction, the number of unemployed, it has plunged from 15 million to 13.9 million in two months! The only reason for this is due to the increasing disenchantment of those who completely fall off the BLS rolls and no longer even try to look for a job. Lastly, we won't even show what the labor force is as a percentage of total population. It is a vertical plunge.
NFP +36,000, Huge Miss To +146,000 Expectations, 9% Unemployment, Not Seasonally Adjusted U-6 Surges From 16.6% to 17.3%Submitted by Tyler Durden on 02/04/2011 09:30 -0400
- Change in Private Payrolls (Jan) M/M 50K vs. Exp. 145K (Prev. 113K)
- Change in Manufacturing Payrolls (Jan) M/M 49K vs. Exp. 10K (Prev. 10K)
- Seasonally adjusted U-6 underemployment 16.1% from 16.6% previously
- Much more importantly, Not-seasonally adjusted U-6 surged from 16.6% to 17.3%!
- The civilian labor force declined from 153,690
- Government workers: from 20,759K to 20,740K
- Labor force participation at 64.2%, the lowest since March March 1984
- Part-time workers for economic reasons: 8,407
- Part-time workers for non-economic reasons: 17,552
- Birth/Death adjustment: -339,000
We are now all awaiting Snow Lavorgna to appear and explain how January snow is to blame for genital herpes, among every other bad thing in the world.
Over the past two years here has been no greater soap opera (with our apologies to Congress, who we know is trying but is now well into B-actor territory) than that of the Fed's 13 Samurai (Bernanke and the 12 regional presidents). And since there is no TV Guide to summarize the key punchlines in any given month, today we commence a highlight reel of the most prominent (amusing, glaringly false, plain ridiculous) statements by various Fed officials. As this is the year where ever more attention will be placed on the fake debates by the Fed's even faker Hawk and Dove split, we are confident that it will provide hours of entertainment to see how those entrusted with protecting the US Dollar contradict themselves from month to month in their execution of job duties that are now nothing less than 100% political.
- Fed Denies Policy Is Causing Food Rises (FT)
- Pressure mounts on Mubarak to go (FT)
- Algeria to Lift Limits on Liberty (WSJ)
- Merkel Turns Crisis into Opportunity to Reshape Euro Zone (Bloomberg)
- And finally, it is mainstream: Rising Commodities Put Profits Through the Wringer (Barrons)
- Storm Battered Australian Coast (WSJ)
- Boeing Loses Half of Dubai Aerospace Order for 737-Model Jets (Bloomberg)
- Virginia to Ask Supreme Court to Rule on Health Law (NYT)
- Are the ultra rich starting to spend less: LVMH Falls After 2010 Operating Profit Trails Estimate (Bloomberg)