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The weather ate the recovery.
Now we know why the Wall Street demimonde had been pimping the unemployment number as 'the key number to watch' as compared to actual jobs added earlier this week. Although at the time they never really said why.
The weather was too bad for people to go to work, but it didn't matter when it came to registering for unemployment benefits. And over 500,000 unemployed people apparently disappeared in snow drifts, and are no longer counted in the labor force, thereby improving the percentage of remaining people who do not have jobs. It's a shrinking denominator thing.
So, there are plenty of new jobs out there. The people just could not get to them because of the snow.
Even J. Bradford DeLong, stalwart Democonomist from Berkley, was a little put out by this report.
"I want a trained professional to analyze this. It is not unusual for the series to do something odd around Christmastide. It is not unusual for the series to diverge. Not this much."
And Brad is not the overly fussy sort, because a few years ago he said that Alan Greenspan had never made a policy decision with which he disagreed.
The trained professionals trotted out on financial television say that this means that the recovery is here. Wait until you see next month's numbers. Yada-yada. And it is time to buy stocks.
Here is my own trained professional opinion of how to analyze this report, and Obama's economic policies in general. We can't stop here. This is bat country!
O tempora. O mores. O Bernanke. O Bama.
From the Cafe commentary on 2 Feb:
"Now it is fairly well known that the unemployment rate is a less important metric, since people stop being counted as unemployed when no longer receiving unemployment benefits, or when they take a menial low paying job. And in a prolonged downturn you can therefore have improvements in the unemployment rate without any real improvement in overall unemployment like the labor participation rate and the median wage, which are the key indicators of a sustainable recovery.
So it makes me wonder what antics the government and the pigmen might have up their sleeve to rattle the swill bucket for mom and pop to get back into stocks, and most likely once again at a top."
Here is another trained professional opinion from another era:
"...there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, and on unselfish performance; without them it cannot live. Restoration calls, however, not for changes in ethics alone. This nation is asking for action, and action now."
Franklin Delano Roosevelt, First Inaugural Address, 1933
It will be interesting to see how the Non Farm Payrolls report comes out tomorrow.
I am starting to feel a little more comfortable with this chart formation, but follow through is confirmation. 1375 is a key overhead resistance. Don't expect Benny and the Banks to roll over too easily.
One of the Federales put out a Buiter-like commentary Is Gold Money?. No, it is not legal tender these days, but it is an almost universally recognized store of value now as it has been for about the last 6,000 years. Sometimes enlightened, well-disciplined regimes have sanctioned it as official 'money.' But certainly not those inward looking bureacracies who could not find with both hands the bubble(s) they have recklessly created out of you know where.
This sort of rhetoric is sometimes an indicator that the Fed is getting nervous because the Asian and Latin American puppies are not eating their latest brand of ersatz puppy chow, preferring red meat to waste paper.
I do not support the gold standard for the US because the system is too weak and corrupt to bear it at this time. As long as gold and silver trade freely those who have a mind to it can use it to protect themselves against devaluation if they wish.
But if one is on some standard, it forces you to be more transparent and overtly devalue your currency, should you wish to do things like bail out your friends on Wall Street. Electronic digits on the other hand are much more amenable to a bureaucracy which prefers to conduct its business using opaque financial transactions in a self-serving manner, lacking in sufficient independent oversight.
Oh I see where Benny came out today and signalled QE to the limit, and gold and silver spiked higher. Now it all seems more clear to me.
A nice fade. Thanks. And let's hope Ron Paul gets that audit soon.
As Matt Damon said in one of the best poker movies, Rounders:
Mike McDermott to Teddy KGB: "Well you feelin' satisfied now Teddy? Because I can go on bustin' you up all night."
Caution: language
Oh by the way, JPM Hid Doubts On Madoff Fraud - NYT
And there will be more.
Let Gold and Silver Rally, Jamie - Leave Blythe Alone!
Tomorrow is the US Non-Farm Payrolls report.
This ought to be interesting.
"It was possible, no doubt, to imagine a society in which wealth, in the sense of personal possessions and luxuries, should be evenly distributed, while power remained in the hands of a small privileged caste.
But in practice such a society could not remain stable. For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupified by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realise that the privileged minority had no function, and they would sweep it away. In the long run, a hierarchical society was only possible on a basis of poverty and ignorance."
George Orwell, 1984
This is the ultimate failure of oligarchical, crony capitalism, as it is being trumpeted today from several diverse circles of thought as the new thing with China as its model. Oligarchies can not allow for the rise of a thriving middle class, with decent education, substantial wages, and rising standards of living, because that is a threat to their power. The fascists were much admired for their economic recovery from the Depression, but they maintained their control of the people through the iron grip of fear and terror, even while the East coast establishment lionized Mussolini and Hitler as economic miracle workers.
And this is why the oligarchical classes even in the US and the UK favor austerity over reform. Reform diminishes their illicit access to unproductive wealth and power, and austerity hammers the middle class into submission.
On a lighter note, Wall Street has decided that Egypt is really not all that important, with the likely passage of power to another puppet if Mubarak should fall. So the big tickle will be the Jobs Report on Friday. The key metric for them is the anticipated unemployment rate which is expected to be 9.5% or thereabouts.
"Now it is fairly well known that the unemployment rate is a less important metric, since people stop being counted as unemployed when no longer receiving unemployment benefits, or when they take a menial low paying job. And in a prolonged downturn you can therefore have improvements in the unemployment rate without any real improvement in overall unemployment like the labor participation rate and the median wage, which are the key indicators of a sustainable recovery.
So it makes me wonder what antics the government and the pigmen might have up their sleeve to rattle the swill bucket for mom and pop to get back into stocks, and most likely once again at a top."
