Zuckerman: "Why the Jobs Situation Is Worse Than It Looks" 

The Great Recession has now earned the dubious right of being compared to the Great Depression. In the face of the most stimulative fiscal and monetary policies in our history, we have experienced the loss of over 7 million jobs, wiping out every job gained since the year 2000. From the moment the Obama administration came into office, there have been no net increases in full-time jobs, only in part-time jobs. This is contrary to all previous recessions. Employers are not recalling the workers they laid off from full-time employment. The real job losses are greater than the estimate of 7.5 million. They are closer to 10.5 million, as 3 million people have stopped looking for work. Equally troublesome is the lower labor participation rate; some 5 million jobs have vanished from manufacturing, long America's greatest strength. Just think: Total payrolls today amount to 131 million, but this figure is lower than it was at the beginning of the year 2000, even though our population has grown by nearly 30 million...The inescapable bottom line is an unprecedented slack in the U.S. labor market. Labor's share of national income has fallen to the lowest level in modern history, down to 57.5 percent in the first quarter as compared to 59.8 percent when the so-called recovery began. This reflects not only the 7 million fewer workers but the fact that wages for part-time workers now average $19,000—less than half the median income.

 

Initial Claims Predict Disappointing June Non-Farm Payrolls Of 75K-125K 

Yesterday's very disappointing initial claims number was quickly forgotten as algorithms latched on to any positively sounding headline out of Europe in order to push the Dow over the mythical 12,000. Alas, this is very shortsighted, because as Bloomberg economist Joseph Brusuelas is quick to point out, based on historically close Claims-NFP correlations, the June NFP number will be a big miss to expectations, and print in the 75-125K range. This ugly number which will merely further cement the case for further monetary or fiscal stimulus (and forget the latter), will come just in time for the Manufacturing ISM to print sub 50, and send the confirmation that we have all been waiting for that the US economy is now officially contracting. 

 

 

 

 

Risk Spread Compression Time As Stock Sell Off Intensifies 

Submitted by Tyler Durden on 06/24/2011 10:17 -0400

That yesterday's entire move on the idiotic ramp into the close is now unwound is not at all surprising. We predicted this is what happens when you have busted vacuum tubes lifting every offer in a market that has 3 lots in Level 2. What is surprising is that even as the ES has plunged, the RISK basket has tumbled far faster. As usual, at times of great arbitrage, we point out the glaringly obvious, which at this point is to compress the ES-RISK trade for a 14 ES point equivalent compression. 

 

 

 

 

1 Month Bill: -0.005% 

As vacuum tubes slowly realize they were all cheated by the great European fraud headline and soundbite machine, the scramble into the relative safety of Uncle Sam's paper is once again reaching a crescendo. At last check, the 1 month Bill was trading 0.000/-0.005, whereby people pay Tim Geithner to prevent them from investing in the worthless asset class known as stocks. 

 

 

 

 

 

 

Italian SEC Can't Rule Out Manipulation In Bank Stock Plunge 

When unsure, blame the speculators:

• MARKET WATCHDOG SAYS REVIEWING TODAY'S BANK DECLINES
• CONSOB OFFICIAL: STOCKS PLUNGE IN PART DUE TO STOP-LOSS TRADES
• CONSOB OFFICIAL CAN'T RULE OUT MANIPULATION TRIGGERED DECLINES
• CONSOB OFFICIAL SPEAKS BY PHONE        

Alternatively they are spot on, and someone is doing their darnedest to spread the contagion finally to the last PIIGSy.





The Anatomy of a Serial European Banking Collapse

Posted by: Reggie Middleton

Post date: 06/24/2011 - 08:05

Have you ever looked beneath the hood of the big European banks? It's scary for the average layperson & it even scarier if you actually understand what it is you are looking at. What we have hear is EXACTLY what I found in early 2008, INSOLVENCY - laid out plainly for all to see - at least all who ever bothered to take a look! Throw Kilo after Kilo of leveraged fiat currency meat into the insolvent sovereign PIIGS' maw & you won't ever see it again:

 

 

 

 

Goldman Is Now Selling Oil Equities: Advises Clients To Buy Oil Equities 

Submitted by Tyler Durden on 06/24/2011 10:12 -0400

Following its admission yesterday that it is now buying oil by telling clients to sell Brent to $105-107 a monther after advising anyone who cares Brent was on its way to $130, today we learn that Goldman is actively dumping its prop, pardon, there we go again, flow, FLOW, inventory of oil equities to idiots, pardon, clients. As to how dropping crude prices and thus collapsing profit margins is beneficial for energy producers, that is one we will long be scratching our heads over. 

 

 

 

 

 

Durable Goods Increase by 1.9% (Exp 1.5%), Core Up 0.6%, Below Consensus 0.9%, Second Q1 GDP Revision As Expected 

Submitted by Tyler Durden on 06/24/2011 08:44 -0400

Good and bad news from the May durable goods data, where as expected transportation contributed the major portion, with the total number coming at 1.9% on expectations of 1.5%, up from an upward revised -2.7% (previously -3.6%). However, take out transportation and the change was only 0.6%, below consensus of 0.9%. From the release: "Transportation equipment, also up two of the last three months, had the largest increase, $2.7 billion or 5.8 percent to $49.6 billion. This was due to nondefense aircraft and parts which increased $2.7 billion. Shipments of manufactured durable goods in May, up five of the last six months, increased $0.6 billion or 0.3 percent to $194.6 billion. This followed a 1.4 percent April decrease. Machinery, up three of the last four months, had the largest increase, $0.5 billion or 2.0 percent to $28.3 billion." The surprise was a jump in machinery orders which had a 3.4% rise in May, to $108.7 billion: "This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 3.7 percent April increase." Another all time record comes from a good old standby: inventories: "Inventories of manufactured durable goods in May, up seventeen consecutive months, increased $4.1 billion or 1.2 percent to $355.4 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 1.2 percent April increase." 

 

 

 

 

 

Guest Post: Austria's Green Party In Position To Kill The Greek Bailout Package 

Submitted by Tyler Durden on 06/24/2011 07:37 -0400

While EU leaders look forward to a multitude of emergency meetings until July 20, when Greece has to pay back a government bond with a volume of €6.6 billion, the fate of Greece's bailout may ultimately lie in the hands of the Green party in the dwarf nation Austria. Austria's Green Party sent an open (German language) letter to the country's chancellor Werner Faymann on Thursday, threatening to boycott a vote in the Austrian parliament where a 2/3 majority is needed for a change of the constitution that would allow Austria to participate in the €138 billion bailout package for the Hellenic peninsula. As a Euro member Austria has the obligation to take part in the bailout that is hugely unpopular with voters/taxpayers. 

 

 

 

 

 

Drone Airplane Crashes Into Roof Of Damaged Fukushima Reactor #2 

Fukushima, which has yet to be wrapped up into the world's most surreal Christo project, has now entered the realm of the sitcom farce. According to Dow Jones, "A small 8.2 kilogram drone aircraft gathering data from heavily damaged areas of the Fukushima Daiichi nuclear power plant lost control Friday and landed on the roof of the No. 2 reactor building, plant operator Tokyo Electric Power Co. (9501.TO) said. The vehicle, known as a T-Hawk, is about 50 centimeters in diameter and looks like a small jet pack. It is used primarily by the military for reconnaissance work in dangerous areas. It has been used at Fukushima Daiichi since mid-April to assist in damage assessment." What next: Getco's SkyNet bots take control of the Johnny 5's crawling and snapping pics inside the damaged reactors and all commit ritual suicide in the spent fuel rod pool (while churning shares of GM stock of course). 

 

 

 

 

 

 

Risk Mood Turns Sour After Italian Banks Unicredit And Intesa Sanpaolo Suspended Following Plunge 

Submitted by Tyler Durden on 06/24/2011 07:18 -0400

There has been a decidedly bearish turn to risk sentiment in Europe, where the EURUSD briefly touched over 1.43 just under two hours ago, only to see virtually all the gains from the Greece "bailout acceptance" non-news wiped out, and dipping by over 100 pips in the span of a little over an hour. The reason for this dramatic change in mood is attributed to a trading halt in Italian banks UniCredit and Intesa Sanpaolo both of which tumbled by 8% earlier before being halted. Among the reasons for the plunge cited by traders are rumors for a cap increase for UniCredit due to risk of not passing the stress test. There is also speculation that there was a major selling program advertised by Goldman several minute before the Moody's headlines of putting Italian banks on downgrade review. Attached is Reuters take. Bottom line - Europe is so jittery that no matter how the Greek hole is plugged, the law of connected vessels merely will mean that vigilantes will next focus their attention to one of the next two dominoes: Spain and Italy. 

 

 

 

 

 

If you find value in the timely important information supplied, please consider a small donation.

I'm PayPal Verified