The fiscal crisis came and went and yet the Potemkin village remains. So much was made about the looming fiscal calamity and its dire consequences that the probabilities of a compromise were overwhelming. Not only did fiscal sanity fail to show, the final package was beyond my comprehension. As the nation’s focus was supposedly on Congress, these purveyors of fiscal rectitude passed a BILL that was laden with pork. NASCAR, Hollywood, alternative energy et. al. were the recipients of CONGRESSIONAL LARGESSE IN THE TIME OF FISCAL AUSTERITY. There is no shame in the payment of political favors even in the full view of the MIDDLE CLASS.
Posts Tagged ‘ADP’
Notes From Underground: Friday’s Unemployment, Or, Our Own Version of Operation Twist
November 1, 2012Ah, the November 1 and the equity market regained its footing from yesterday’s post-Sandy house cleaning. The NASDAQ 100 recovered to close back above the midweek break below the 200-day moving average (2659) and closed in full rally mode. Supporting the NASDAQ action was the S&P/U.S. BOND RATIO, which gives a picture of interest rates to equity prices, also tested its key moving average and held after a short breach. It is amazing how many markets have reverted back to the 200-day m.a. in the last two weeks, which is a sign of health for the market as so many different trading instruments have been technically overextended–reversion to some established mean is a sign of health. Now that so many variables have reverted the market is set up to reveal some coming story. I am not sure of the tale but it is a signal to be alert for some approaching volatile price action.
Notes From Underground: A Few Quick Hitters As the Market Returns
October 31, 2012***The Canadian situation became more muddled today with the release of its GDP. BOC Governor Mark Carney and FM Flaherty would love to raise rates in an effort to halt the rise of private debt, but today’s GDP showed a 0.1% decline in growth for the month. It is a real dilemma as the strong Canadian dollar is impacting some sectors of the economy and thus a rate increase to stem credit growth will have a strengthening impact. The GDP release blamed the slowing global economy for the downturn but it has not impacted domestic credit growth because of ultra-low rates. How will the Canadians solve this dilemma as it wants to slow the housing sector to help forestall private loans? This conundrum will test Carney’s position as a leading central banker. Let’s watch to see if it is possible to head off asset appreciation without causing system wide economic pain. Greenspan and Bernanke claim it is not possible. Governor Carney, here’s your chance to help set central banking on a better course.
Notes From Underground: The Tight Rope Walker Was The Key Circus Performer
September 6, 2012As I covered in NOTES yesterday, the three-ring circus was coming to town Thursday and the show was so fantastic that it dazzled investors worldwide. The RIKSBANK began the show by cutting its rate by 25 basis points to get the audience in a festive mood. Mervyn the Magnificent from the Bank of England did his laying down and going limp act so as not to be sawed in half by the by those magicians of the slight of hand. The BOE left everything as is and presented a very benign statement that offered up very little as to its rationale for maintaining the present rates as well as the same ASSET BUYING PROGRAM. The market was gawking at the rising financials in Europe when in the center ring, Marvelous Mario dropped his cape and headed out on the high wire in which the safety net was pretended to be removed or was totally transparent.
Notes From Underground: Central Bank Poker–After the AUSSIES CHECKED, the BOE BET; the ECB CALLED
July 5, 2012No great surprises from the mandarins of global finance. First, the BOE announced the widely anticipated 50 BILLION QUID increase in the QE program but Mervyn King and company did not cut the overnight lending rate. Following on the heels of the BOE, the ECB, under the guidance of Mario Draghi, cut the overnight rate by 25 basis points to 0.75% and also lowered the ECB deposit rate to zero from 0.25%. Again, no surprises, although the DEPOSIT RATE CUT WAS NOT WIDELY EXPECTED. Why did Draghi move to make the deposit rate ZERO?
Notes From Underground: MAY 6 — A Flash Crash For the European Political Elite
May 6, 2012Before politics, it is important to review the two big stories from Friday:
1. The U.S. unemployment data was certainly on the weak side of expectations as nonfarm payrolls came in at a tepid 115,000, very close to the ADP report. Average hourly earnings were soft, which will challenge the view of consumer demand ramping up any time soon. Yes, the unemployment rate dropped to 8.1%, but with so many people dropping out of the job market this indicator lends itself to so much POLITICAL SPIN THAT ITS USE IS BECOMING NEGLIGIBLE. Economists have twisted its meaning and therefore markets are disregarding its usefulness. The real positive in the data was the continue growth in MANUFACTURING as 16,000 factory jobs were created. Otherwise, the number was weak and will be a reason for the FED TO KEEP THE MUSIC OF OPERATION TWIST IN PLACE.
Notes From Underground: April Showers Bring May Unemployment
May 3, 2012As everybody reading and/or listening to financial news all week knows, tomorrow at 7:30 a.m. CST the Bureau of Labor Statistics will release the unemployment report, which has been deemed as the most important data since …….????? The consensus is now for a nonfarm payroll increase of 170,000, the RATE TO STAY AT 8.2% and average hourly earnings to increase 0.2%. After Wednesday’s ADP data, the market has lowered its NFP expectations and thus, a consensus number of 170,000 will be a positive for the EQUITY markets, positive for the DOLLAR and meaningless for the BONDS.
Notes From Underground: UPON FURTHER REVIEW OF THE FOMC MINUTES …. HMMM
April 3, 2012Today’s release of the FOMC minutes caused a market rethink about QE and it seems that the RALLY IN THE DOLLAR, SELLOFF IN PRECIOUS METALS AND FIXED INCOME MARKET means the market believes that the FED will restrain itself from another massive liquidity injection. The EQUITY market initially sold off by regained almost all of its losses by the close (NASDAQ ACTUALLY CLOSED HIGHER) as the STOCKS remain convinced that the FED WILL KEEP ZIRP FOR THE FULL EXTENDED PERIOD.
Notes From Underground: The Unemployment Data Was Almost as Disappointing as Europe
July 10, 2011Friday’s unemployment report revealed that Thursday’s ADP data was, again, a “FALSE POSITIVE.” The 157,000 ADP gain failed to show in the BLS numbers and all the Wall Street economists were caught off guard as they spent Thursday night ramping up their guesstimates to be more in-line with the private sector prognosticator. The initial response by the EQUITIES was to sell off as the lack of job growth undermines the recent S&P and DOW rally. At day’s end, the equities staged a rally and the loss on the day was small, especially relative to the strength shown early in the week.
Notes From Underground: Remember, Ben Bernanke is a ’37er and he Promised MIlton Friedman
June 2, 2011Tomorrow comes the most important data point for the markets as the BLS releases the monthly unemployment report. Yesterday, the market was abused by the ADP employment info, which was much weaker than expected and lead to a selloff in all asset classes. A quick gaze upon the closing CQG quote board lent credence to the line from Apocalypse Now: “I love the smell of deflation in the morning.” Of course, I jest as I substitute DEFLATION for NAPALM but the use of either causes major destruction. The ADP data was able to cause so much angst because it followed very weak housing and manufacturing numbers released during the previous week. The CONSENSUS for Friday’s UNEMPLOYMENT REPORT is for: NONFARM PAYROLLS of 155,000; the jobless rate to hold at 9.0%; and average hourly earnings to show a gain of 0.2%.
