NFP Big Miss: 120K, Expectations 205K, Unemployment 8.2%, "Not In Labor Force" At New All Time High
March NFP big miss at just 120K. Unemployment rate declines from 8.3% to 8.2%. Futures slide, for at least a few minutes before the NEW QE TM rumor starts spreading. The household survey actually posted a decline in March from 142,065 to 142,034. Considering Birth Death added 90K to the NSA number, the actual number was almost unchanged. The unemployment rate drops to 8.2% for one simple reason: the number of people not in the labor force is back to all time highs: 87,897,000. And as always, as we predicted when Goldman hiked its NFP forecast yesterday from 175K to 200K saying "if Goldman's recent predictive track record is any indication, tomorrow's NFP will be a disaster", Goldie once again skewers everyone. Finally, Joe LaVorgna's +250,000 forecast was just 100% off... as usual.
The Average March "Seasonal Adjustment" Factor: +824,600
While still gripped in the bearhug of the warmest winter/spring period seemingly in history, and with virtually everyone now having woken up to the realization (two months delayed) that winter seasonal adjustments when April falls in February may not be the most appropriate way to adjust Non-seasonally adjusted data, we would like to demonstrate the seasonal adjustment factor by month over the past decade. The first chart below shows the annual difference between the NSA and SA number from 2002 to 2012. The second one: just the average. The bottom line is that in the January-March period, there are, on average, 4,413,000 jobs "added" purely due to seasonal adjustments. And while these seasonal adjustments may be appropriate when winter is indeed winter, they are far more difficult to justify when summer falls in the middle of winter. Furthermore, it also means that if indeed we get the +200,000 NFP number that many expect today, this would mean 2012 YTD has added a total of 711,000 jobs. Putting this number in perspective, this is 16.1% of just the seasonal addition over the same period. In other words: jobs added solely in the confines of some opaque excel spreadsheet based on historical patterns, pre 75 degrees in February. Finally, the March BLS number of +200,000, if indeed it comes there, will be 24% of just the shotgun average March seasonal adjustment which has averaged to 824,600 jobs over the past decade. Yet things finally change in April, when seasonal adjustments hardly have an impact on the NSA number, and then in May things get from bad to worse, when the Seasonal Adjustment will for the first time every year, subtract 670,100 jobs from the NSA number. Appropriately enough, this will come just before the June FOMC meeting. Finally, should the NFP number be a major beat, it merely makes US-based QE that much more unlikely until and unless we get a major disappointment in payrolls.
Pre-Easter Weekend Comments
Trader Dan at Trader Dan's Market Views - 57 minutes ago
Today's Payrolls number for the month of March came in at 120K, far less
than the market was expecting. The response of those futures markets which
were still open for trading was swift and immediate - Emini S&P 500 futures
dropped sharply while the US long bond staged a nearly two point rally.
So much for notions that the economy is performing well enough that the QE3
option is off the table.
The markets will not interpret this abysmal number as the start of a new
and lower trend in employment but it will serve to squelch some of the
uncalled for and certainly undeserved euphoria a... more »
CNBC Video: Dr. Doom Forecasts 'Massive Wealth Destruction'
Admin at Marc Faber Blog - 2 hours ago
Latest CNBC video interview
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Employment gains slow, jobless rate drops
Eric De Groot at Eric De Groot - 3 hours ago
The dollar's sharp bounce and drubbing in precious metals and mining shares precipitated from the interpretation that an improving economy had significantly reduced the probability of quantitative easing (QE3) going forward. After today's disappointing employment data, it's likely that this assumption will be challenged by the markets next week. Economic activity is either rising or falling at... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Treasury Yields Drop Most In 5 Months As Market Reacts, Equity Futures Slide
UPDATE: Treasuries still bid with 10Y -12bps ay 2.06%, 7Y -12bps at 1.44% and 5Y comfortably back under 1% -9bps.
Risk-Off. Treasury yields dropped around 12bps across the curve from pre-NFP as the 10Y yield drops the most in 5 months. Equity futures are down the most in a month (20pts off pre-NFP levels) and testing lows as they catch up to credit weakness. IG credit is testing 100bps for the first time in over 2 months and HY credit is back over 600bps - its widest in 3 months. Gold has popped $10 or so to over $1640 and it appears we have a new FX regime with USD weakness implying market weakness as JPY strength (on repatriation and carry unwinds back to one-month highs) is the most impressive (and AUD weakness for same reason). EURUSD is leaking higher as is swissy, as the EUR-USD swap spread model converges on EURUSD's fair-value. Of course markets are thin, but ES (the S&P 500 e-mini futures) is trading relatively actively and testing lows once again as they close - not pretty at all as ES ends the week with the heaviest 3-day loss in four months (perhaps notably ending at 2011's May high print level).
US Needs To Generate 262K Jobs Each Month To Get Back To Breakeven
This is the latest tally: since the start of the Second Great Depression, the US has lost a total of 5.2 million nonfarm payroll jobs, beginning with 138 million jobs in December 2007, and printing at 132.8 million as of 90 minutes ago. So far so good. The problem, however is that the denominator in the equation is not fixed, and as everyone knows the US labor force, despite the ridiculous BLS data fudging, is growing in line with population, albeit at a slower pace. According to all non-partisan budget forecasters, each month the labor force should be adding 90,000 people. Which in turn means that since December 2007, the labor force has really grown by 4.6 million. Adding these two together leads to a 10 million job deficit. So what has to happen for these 10 million to get promptly put back into jobs, and for America to get back to the ~5% unemployment rate it boasted just as the credit bubble peaked? Nothing too crazy: the country just has to create 262,000 jobs every month for the remainder of Obama's first, and now, by the looks of it, second term too. We are quite confident he can handle it.
Stephen King's Perspectives On The Greek Tiger
While
the idea of a futuristic tale of the resurgence of Greece and how
Germany shot itself in the foot could well be the work of the
horror-writer, HSBC's Chief Economist Stephen King opines on what could well be with a moral for those who want Athens out of the Euro. "The
idea that Greece can leave and that the rest of the eurozone will then
live happily ever after – a view that is quickly becoming the
conventional wisdom – is surely wrong. Departure might
eventually be an answer to Greece's difficulties but it only asks
questions of everybody else." And the fantastic journey King lays out is
rooted in a sad reality that he sums up thusly: "Germany's gamble had
failed. In the attempt to punish Greece, it had ended up with an
impossible choice: creating a fiscal union or huge currency upheaval. Berlin had taken aim at Greece but shot itself in the foot."The Easter Egg: Italy's Latest Parabolic Curve
With the world focusing on the latest disinformation from the BLS, one would be forgiven to miss the Bank of Italy's monthly balance sheet aggregates data. A quick perusal thereof reveals that in March, Italian banks saw their ECB support surge from €195 billion to €270 billion, the highest ever, 39% more than in February, and 776% more than greater than a year earlier, and now merely the latest parabolic curve to love and hold dear. Indicatively, on the chart below we have also added Spanish bank borrowings from the ECB (still pending a March update), which in February were also at an all time high of €152 billion. So aside from this last recourse lifeline from the ECB which is now openly keeping Europe's banks afloat, "the crisis is nearly over" to quote Mario Monti.
The Hunt For Red Pyongyang: South Korea On Alert For Naval Attack After "Losing" 4 North Korean Subs
Just because the imminent launch of a North Korean rocket along a trajectory which
will likely force Japan to strike it down, something which Pyongyang
said would be equivalent to an act of war, was not enough, it now
appears that South Korea has commenced the hunt for Red Pyongyang or
four, as it is now "searching for four North Korean submarines that
disappeared after leaving their bases on the tense peninsula." ABC News reports
that "A military source quoted in a South Korean newspaper says up to
four North Korean submarines slipped out of port in recent days and
have so far avoided detection. The source was also quoted as saying
that Pyongyang has stepped up submarine infiltration drills as the
weather has warmed." As a result, "Seoul is now on alert for a possible strike against a South Korean naval ship."
This won't be the first time a North Korean sub is implicated in
potential wrongdoing: "The South accuses the North of using a midget
submarine to sink the corvette the Cheonan two years ago, which left 46
South Korean sailors dead."51 Months After The Start Of The Recession, Here Is The Report Card
Recovery? What Recovery? Over 4 years after central banks have progressively injected over $7 trillion in liquidity into the global markets (and thus, by Fed logic, the economy), and who knows how many trillion in fiscal aid has been misallocated, to halt the Second Great Depression which officially started in December 2007, the US "recovery" is the weakest in modern US history! How many more trillions will have to be printed (and monetized) before the central planners realize that fighting mean reversion by using debt to defeat recore debt, just doesnt't work? Our guess - lots.
What Is Capitalism?
On
a day when the sad reality of our (AAPL-free) centrally-planned
economy came a little unhinged, it is perhaps useful to reflect on just how different our 'capitalism' in the US now is from other 'capitalist' societies and the one we had in the 1900s.
Robert Murphy (of The Politically Incorrect Guide To Capitalism book
fame) explains how everyone has an agenda - yet everyone agrees that
they despise capitalism. Capitalism is the system in which people are 'free to choose' and this is compared to socialist economies (where prices are set by the Fed
state and assets can be confiscated for the benefit of the people). The
fear of capitalism's citizenry running riot with unregulated actions
leaves critics focused on a belief that regulators and bureaucrats know better than private citizens
how to make their own decisions. This brief discussion ends with a
sprinkling of Ayn Rand, Obama, Geithner, Barney Frank, and Harry Reid
and their efforts to evade Capitalism's features, misrepresent its
nature, and destroy its last remnants.Hyper Report: 30 Pieces of SILVER
Today’s Items:
First…
Russia warns West, Arabs against arming Syria rebels
http://ca.news.yahoo.com
http://alexandravaliente.wordpress.com
Russia warns West, Arabs against arming Syria rebels
http://ca.news.yahoo.com
http://alexandravaliente.wordpress.com
Russia has indirectly warned Washington
to stop destabilizing Syria by arming Syrian rebels. Europe is facing
its own problems to provide any meaningful support for the U.S. and
U.S. troops are spread abroad and tired of more than a decade of wars.
So, the question is, will the Central Banker controlled Washington risk a
direct confrontation between the U.S. and the growing Russia-Chinese
military alliance?
Well, the funny money printing by the FED
is paying more and more dividends as food prices go through the roof
around the world. Record high prices for staple foods were one of the
main factors that contributed to the Arab Spring uprisings in the Middle
East and North Africa. Let’s not forget those riots in other spots
around the world, like in China. With the added possibility of the
production of grains dropping, like corn dropping 3 million tonnes,
things will be getting ugly folks.
Richard Russell, and others, are saying
that Europe is headed for a massive collapse. Recession in some
Euro-zone countries could become a depression, just like the 1930s.
With the European Central Bank cutting back, gold is standing its ground
because China is moving in to scoop up gold on any gold weakness. The
Chinese are looking at the long view; therefore, when it comes to gold
and silver… Keep stacking.
Here are a few…
1. Prepare for the worst.
2. Learn to live meager.
3. Learn how to hide.
4. Learn first aid
5. Learn about nutrition.
1. Prepare for the worst.
2. Learn to live meager.
3. Learn how to hide.
4. Learn first aid
5. Learn about nutrition.
Arizona House Bill 2549, waiting for the
Governor’s signature, essentially makes using the internet a class 1
misdemeanor. Essentially, unless you an elite, if you harass, annoy,
offend, use obscene, lewd or profane language on the internet, then bend
over. A Class 1 misdemeanor, in Arizona, is punishable by a $250,000
dollar fine and up to six months in jail if you are in Arizona. Glad I
am in Texas.
April 17th is the deadline, without
extensions, to file tax returns; however, tax freedom day will most
likely be later. Fore example, those living in New York, it will be May
1st, or May Day. Now imagine cash strapped leaders in Washington
asking the American people to think more about the country than
themselves.
Next…
Thirty Pieces of Silver
Thirty Pieces of Silver
As we head into Good Friday and a three
day weekend, it might be nice to remember about the 30 pieces of silver
that Jesus was betrayed with. Assuming for arguments sake, that the 30
pieces of silver were 30 ounces of silver. Does it seem likely, using
current manipulated market value of silver being 32 dollars an ounce,
that someone would betray their best friend for less than a thousand
dollars? In short, silver’s real value has to be a lot higher;
therefore, keep stacking.
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