Curious why March hourly wages fell, and why the weekly number continues to trend at a near-recession level, and certainly one that does not support a 2% inflation growth case? Here's why: in March the best paying industry groups - information, financial activities and manufacturing (which actually saw a drop of 1,000 jobs in the past month) - added a cumulative total of... 2,000 jobs among them. Where was the bulk of the job gains? At the worst paying sectors of course.
Is there any hope that we might actually elect a president with the mandate and courage to take down Wall Street instead of kissing its rear end in humiliating obeisance? The 2016 presidential election may be far away to those obsessed with the news cycle, but it's not too early to express one single hope: that we finally elect a president who doesn't kiss Wall Street's rear end every single day for four/eight years running. Either the next president issues an executive order (or whatever it takes) to enact these four administrative rules, or he/she is kissing Wall Street's rear end every single day of his/her administration.
Update: in direct flashback from the summer of 2011 when the ECB leaked news only to retract it within minutes, this just happened: CONSTANCIO: DOESN'T KNOW ABOUT 1 TLN-EURO QE MODEL REPORT
When in desperate need to crush your currency (being bought hand over fist by the Chinese), so urgently need to boost German exports, since you are unable to actually do QE as per your charter, what do you do if you are Mario Draghi? Well, you leak, leak, leak that you are contemplating QE, and then you leak some more. Such as today.
- ECB HAS MODELED BOND PURCHASES UP TO 1 TLN EUROS, FAZ SAYS
- ECB TESTS SHOW INFLATION COULD BE BOOSTED 0.2% TO 0.8%: FAZ
Like US inflation soared on the $1 trillion QEternity? Can't wait. In other news, expect zero reaction from gold on this latest news that another $1.4 trillion in fiat is about to flood the market. If only inbetween Mario Draghi's jaw bones.
The current rally off the 2009 lows is echoing rather strongly the surge off the 1982 lows and lining up uncomfortably close to the Black Monday Crash that took the S&P 500 down over 20% in 1987. Of course, it's always different this time; but the market's confidence that the Fed has your back and that computers are there to help not hinder leaves us with an uncomfortable feeling of deja vu all over again.
And all it took for the FBI, the SEC and now the DOJ to figure out the casino was rigged all along, was for a Michael Lewis book to do their job for them.
- DOJ PROBING HIGH SPEED TRADING FOR INSIDER TRADING: REUTERS
U.S. Attorney General Eric Holder confirms Justice Department investigation into high-frequency trading. http://t.co/ERuwcHcGLt
— WSJ Breaking News (@WSJbreakingnews) April 4, 2014
Presented with little comment aside to ask, WTF?
Here are the key numbers: March payrolls +192K, below the 200K expected (LaVorgna 275K). This was a drop from the upward revised February print of 197K. The unemployment rate was unchanged at 6.7%, and above the 6.6% expected. The participation rate rose modestly from 63.0% to 63.2% as the labor force rose by 500K to 156,226 while the people not in the labor force declined by over 300K to 91,030. Manufacturing jobs had the largest drop since July. The number of unemployed rose 27K to 10,486K. Conclusion: it snowed in March too, but judging by the perfectly expected stock reaction, it snowed in a good way.
Bad news is the best news this morning. A higher unemployment rate and worse than expected job creation is the new mother's milk for stocks which kneejerked instantly to new record highs. Bond yields are tumbling and gold is surging (back over $1300) as 'investors' believe this will signal an un-taper (because QE did so much good for so long) or lower-for-longer chatter (so more buybacks?). The USD is fading fast also.
- HSBC 181K
- JP Morgan 200K
- Goldman Sachs 200K
- Barclays 225K
- Bank of America 230K
- Citigroup 240K
- UBS 250K
- Deutsche Bank 275K
With the market focus at the NFP number release will be on one simple statistic: did the March Payrolls number beat or miss the nice round number expected of 200K (after all algos can't process more than that in 1 nanosecond), the real story in the past several years has been not about the headline establishment survey trend but everything else, especially the labor force participation (plunging), average weekly hours (plunging) average weekly compensation (plunging), and the demographic change in the labor force (will workers aged 55 and over hit a new record high? Why yes). All these are metrics and dynamics we, unlike the vacuum tubes, follow closely and will summarize after today's number. Yet one aspect of the jobs data we haven't shown before, and which BofA focuses on this morning, is the unemployment rate by industry. For all those curious what the data looks like, here is the summary.
- Nato chief defends eastern advance (FT)
- Russia looks east as it seeks to rebalance trade interests (FT)
- Plane from Guinea briefly quarantined in Paris after Ebola scare (AFP)
- US attacks Japan’s stance on Trans-Pacific Partnership (FT)
- Thank you IMF: Ukraine PM says will stick to austerity despite Moscow pressure (Reuters)
- U.S. Army seeks motive for Fort Hood shooting rampage (Reuters)
- China Slowdown Adds to Emerging-Market Growth Hurdles, IMF Says (BBG)
- Top investors press Allianz to step up oversight of Pimco (Reuters)
- U.S. to Evaluate Role in Mideast Peace Process, John Kerry Says (WSJ)
- Scientists dismiss claims that Yellowstone volcano about to erupt (Reuters)
- Ukraine detains 12 riot police on suspicion of 'mass murder' (Reuters) - on CIA orders?
Today’s nonfarm payrolls release is expected to show a "spring" renaissance of labor market activity that was weighed on by "adverse weather" during the winter months (Exp. 200K, range low 150K - high 275K, Prev. 175K). Markets have been fairly lackluster overnight ahead of non-farm payrolls with volumes generally on the low side. The USD and USTs are fairly steady and there are some subdued moves the Nikkei (-0.1%) and HSCEI (+0.1%). S&P500 futures are up modestly, just over 0.1%, courtesy of the traditional overnight, low volume levitation. In China, the banking regulator is reported to have issued a guideline in March to commercial banks, requiring them to better manage outstanding non-performing loans this year. Peripheral EU bonds continued to benefit from dovish ECB threats at the expense of core EU paper, with Bunds under pressure since the open, while stocks in Europe advanced on prospect of more easing (Eurostoxx 50 +0.14%). And in a confirmation how broken centrally-planned markets are, Italian 2 Year bonds high a record low yield, while Spanish 5 Year bonds yield dropped below US for the first time since 2007... or the last time the credit risk was priced to perfection.
It appears the U.S. government is doing its best to ensure that nobody anywhere in any corner of planet earth will ever trust American technology again (or U.S. aid for that matter). This process of distrust first really got going with the Edward Snowden revelations, which demonstrated that essentially all major U.S. tech firms are mere wards of the state with little to no privacy protections, and absolutely zero backbone. This story of the U.S. government covertly creating a “Cuban Twitter” called ZunZuneo in order to overthrow the regime there has enormous long-term ramifications on many, many levels, which we will address below...