Taking a Closer Look at NFP
I did not have time to take Friday’s BLS release apart until now — between the fishing and the drinking I am slacking off during my Maine trip — but it only took a cursory glance to see July NFP was not all it was cracked up to be.
This was the best employment number in 12 months — yet it was still a loss of 247,000 jobs. Under normal circumstances, this would an awful number. To put that into context, it would have been the worst month in mots of the recessions over the past 30 years. But after recent monthly NFP job losses of 650k and 700k, somehow 247k seems like good news. Its a classic case of been down so long it feels like up to me.
Let’s take a quick look beneath the headline job number and see what was really going on.
1) Unemployment: The fall from drop in the Unemployment Rate was hailed as a huge improvement by few pundits commenting on — before they had a moment to even read the release. Had they bothered to look at the releaser (crazy idea, I know) they might have learned how this data point is constructed.
The participation rate fell by 0.2 point, and the employment/population ratio fell by 0.1 point — this is now at levels not seen since April 1984 (see chart below). NILFs — “not in the labor force” increased by a huge 637,000. Bruce Steinberg notes that those not in the labor force topped 81 million for the first time ever. That gain in NiLF accounted for the entire decrease in unemployment rate.
Here is how this works: There are two numbers that make up Unemployment — people who have jobs, and the Labor Pool. This month, the Unemployment rate went down because the Labor Pool contracted — not because more people found work.
A decreasing Labor Pool is often a negative, not a positive, economic signal. (Jake at Econompic does a nice job explaining how the math works).
As the chart below shows, the Labor Pool has been falling for quite some time:
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Chart via Jake at Econompic
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2) Mostly Government Sponsored Hiring: A large chunk of the moderation in job losses was directly due to government activity. The spurt in auto production (helped by GM and Chrysler calling back workers after emerging from bankruptcy) was a result of the a Billion already spent in Cahs for clunkers, and the prospect of another $2 billion yet to come. Add in federal government hires for census and others, and you effectively add 100,000 to the jobs count.
3) Wage Gains: David Rosenberg notes that the increase in average hourly earnings owed in part to the boost in the minimum wage, in other words a nonrecurring item that “does not at all reflect an improvement in underlying income fundamentals in the personal sector.”
Add in recalled workers in Autos and this element is nearly all Uncle Sam.
4) Seasonal Adjustments: John Williams of Shadow Stats observes that the improvement in second derivatives (the rate of change) is due to the way the decline’s severity perverts seasonal adjustments.
In particular, (1) Year-to-year comparisons will begin to see a flattening in annual declines, as year-ago numbers used in comparisons were in severe contraction. (2) Extreme economic disruptions have distorted patterns of regular activity and related seasonal-adjustment processes.
Williams notes that this upward seasonal adjusting bias has created unwarranted job gains in 10 of the previous 12 months that total over 1.1 million jobs.
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One final observation on sentiment: Rosenberg was quoted in Barron’s this weekend, discussing how the market prices in bad news and occasionally manages to overshoot in each direction. He points to the unusual fact that since March, “for the first time ever, it has rallied nearly 50% amidst a two-million-job slide.”
That is a disturbing factoid, one that suggests a disconnect is taking place between equities and the real world. That wouldn’t be the first time this occurred. And when that disconnect gets too wide, as we have seen in the past, the market corrects, often violently.
September and October are but a few weeks away . . .
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Sources:
Hair of the Dog
Alan Abelson
Barron’s AUGUST 10, 2009
http://online.barrons.com/article/SB124968366951515643.html
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August 10th, 2009 at 7:40 am
> That is a disturbing factoid, one that suggests a disconnect is taking place between equities and the real world.
Extend and pretend.
Here, in the dog days of summer, it seems to me that the situation in the USA is so fundamentally bad, so unpromising, so booby-trapped for failure, that I wonder if there has ever been a society so badly deluded as ours.
- Hunky Dory http://kunstler.com/blog/2009/08/hunky-dory.html
August 10th, 2009 at 7:56 am
“That is a disturbing factoid, one that suggests a disconnect is taking place between equities and the real world. ”
as many have been saying on your blog BR- the stock market is not reflecting the situation in the real economy- and only adds to people’s suspicions that the stock market is engineered by the large players and adds to theories of USG collusion -
that people trust equities at all is staggering- in that we have has recent major “blow ups”- Nasdaq 5000 and Dow 14,000- where valuations not only refuted the “efficient market hypothesis- but- proved that stocks are nothing more than a Billy Mays pitch to the chumps and the gullible
August 10th, 2009 at 8:17 am
and- as a follow up- it is not a game- and yet- we have a circus atmosphere on the TV networks- no somber analysis- but outright game shows- with shouting- horns and whistles- stock tips- slogans- rah rah “free market capitalism is the surest way to prosperity”- etc,etc,etc-
and that Kudlow says- “free market capitalism is the surest way to prosperity” – is akin to marxist TV espousing daily that “socialism is the surest way to a happy society”-
if something is evidently true- than why keep repeating it? That the largest banks in this country leveraged the whole economy for ever larger bonuses- in the $billions- only to cause worldwide economic destruction in the $trillions- should make on suspect of Kudlow’s slogan-
surest way to who’s prosperity is the question- the richest and most connected?
I am becoming more of a socialist by the day
August 10th, 2009 at 8:17 am
The “wealth effect” is all we have going for us since jobs & incomes are still tanking, housing is still down and the home ATM is closed. “Better Than Expected” headlines from MSM and BLS surprises are the gasses that are inflating this bubble.
I am suspicious of the BLS report which was so much better than a half dozen other July employment estimates, half the time the prelim BLS est is off by over 40% and you can’t convince me that the admin’s desire to show some improvement doesn’t manifest itself someway in these prelim ests. The inaccurate prelim numbers get the attention but the accurate finals don’t, it’s all part of out instant gratification society!
August 10th, 2009 at 8:27 am
I thought it was all the Baby Boomers retiring in July. My bad.
No one out there calling Barry a right wing extremist nut for pointing out that the decline in the unemployment rate was not really good news?
August 10th, 2009 at 8:31 am
The administration, media and stock market have that old-time religion – they just WANT to believe.
August 10th, 2009 at 8:36 am
>> No one out there calling Barry a right wing extremist nut
Last administration, he was a “left-wing extremist”. This administration, he’s a …wait a minute… has anyone called him a “right-wing extremist” yet? Not that I’ve seen.
August 10th, 2009 at 8:37 am
Correction: I don’t recall anyone calling him an “extremist” ever. Maybe just called a “lefty” or “liberal”.
August 10th, 2009 at 8:46 am
Re: “for the first time ever, it has rallied nearly 50% amidst a two-million-job slide.”
This is starting to look like a bubble echo to me. The market is so far disconnected from reality, that it only makes sense to me as another bubble, but I don’t expect it to be a full fledged bubble. What I see unfolding is an echo of the previous two (1999, 2007 tops) huge recent bubbles in the US. Given this, I’m not sure how high it will go.
August 10th, 2009 at 8:51 am
and- as a follow up- it is not a game- but yet- we have a circus atmosphere on the TV networks- no somber analysis- but shouting matches- horns and whistles- stock tips- rah rah “capitalism is the surest way to prosperity”, etc, etc, etc-
and- repeating daily- “capitalism is the surest way to prosperity”- is akin to watching ma*xist programming telling you “soc*alism is the surest way to happiness”-
if it is an evident truth- why keep repeating it?-
and-that the largest banks in the country leveraged the world’s economy for larger bonuses- in the $billions- only to cause worldwide economic destruction- in the $trillions- one would need to suspect of Kudlow’s slogan-
capitalism- surest way to prosperity for whom? The riches and most connected? That is evident by Goldman Sachs alone- poster child of corporate welfare- who is now paying the largest amount of bonuses in its history- after getting up off the mat only months ago- and who’s CEO instructed employees to be discreet in their purchases so as not to raise the ire of the unwashed masses-
while the rest of the country is out of work or desperately hanging on to their job and 1 out of 9 are on food stamps?
becoming more of a soc*alist by the day
August 10th, 2009 at 9:00 am
@Call me ahab – Re: circus atmosphere
Well, I made it to 8:51 before my blood pressure spiked.
August 10th, 2009 at 9:00 am
> Cahs for clunkers
BR -
You’re starting to sound like you spent too much time in New England these past few days. Did you pahhhk your cah and watch the Sawx?
=)
HCF
August 10th, 2009 at 9:01 am
I don’t know what to say, it is so Orwellian.
August 10th, 2009 at 9:03 am
@hopeImwrong:
I agree with your thinking…I see today that real estate prices in China are up 60% in one year…Hussman today leads off his weekly note with exactly the analysis Barry posts. He notes that 400k peeps left the job market…it seems like to me, if you add the 275 and the 400, you get close to 675k swing…
Past recessions were lead by business getting leaner or consumers starting to spend more. Now we have a return to the great depression answer, government leading the way. Yet when business or consumers lead, it has money backing it…this deficit spending orgy still seems to me to simply be digging a deeper hole. And now we see that the Fed is planning to quit buying treasuries…interest rates simply must go up, and with this level of debt, how can anyone see something good as the final result of this?
I just must need to change my tea leaves…
August 10th, 2009 at 9:06 am
@Bruce – I’m actually hoping the Fed was just jawboning about not buying treasuries. Maybe to pacify the monetarists. High interest rates would grind everything to a halt.
August 10th, 2009 at 9:12 am
What I find interesting is Goldman trotting out Abby Cohen to declare the start of a new bull market on CNBC, AFTER a 50% move off the bottom. She was careful not to comment on the possibility of a near term correction, but she did stand by her year end target of 1050-1100.
You have to believe that she/GS have a high degree of confidence in the call given how much public scrutiny GS is under lately.
If the market takes a dive in Sept./Oct. and fails to recover to levels close to her year end target, it will be another huge blow to GS and Abby’s reputation. I don’t know why they would take the risk to make the call if they weren’t extremely confident it will bear out.
August 10th, 2009 at 9:28 am
There has been a big bubble forming. It’s bigger than commodities, equities and bonds. It is the notion that sentiment trumps fundamentals. I believe this notion was promulgated by Greenspan and the Fed (please correct me if I’m wrong). The phrases, “Green shoots” and “second derivative” are offspring of this meme and billions of dollars have been squandered by Congress, the Fed, and Treasury trying to shoo away negative sentiment. Labor is broken in so many ways right now (stagnant wages, rising unemployment, cuts to employee benefits) and will continue to throw cold water on the idea that we just need to rejuvenate positive sentiment. Most disheartening is Obama’s and his advisors embrace of this lunacy.
August 10th, 2009 at 9:38 am
[...] http://www.ritholtz.com/blog/2009/08/taking-a-closer-look-at-nfp/ Consumer credit continues to decline (graph): [...]
August 10th, 2009 at 9:39 am
Good Op-ed piece in today’s WSJ about why corporate earnings and economic performance can decouple in the US, http://online.wsj.com/article/SB10001424052970203517304574306414148814226.html:
So we are facing a conundrum: Companies can grow by leaps and bounds—by double-digits—and yet unemployment can skyrocket and remain high. There is nothing on the horizon that would lead one to expect a turnaround in the employment picture.
Job losses slowed slightly last month as the unemployment rate fell to 9.4% in July from 9.5% in June, but that’s a far cry from any sign of job creation. The weight of more than 20 million marginally employed or unemployed, combined with the increasing pace of economic activity outside the U.S., presents the prospect of permanent change in the American economic landscape: high unemployment, moderate to weak growth, and soaring corporate profits.
The ability of companies—large ones especially, but even more modest ventures that assemble and source globally—to become more efficient and go where the growth is has never been greater. This is undoubtedly good for stocks and positive for investors, but it is also a challenge for American society that we have not even begun to confront.
~Very simply, it’s called international wage arbitrage, which is really the underlying theme for the last two decades of the American enonomy. American wages have to decline relative to those of our trading partners whose wages are lower than ours. The effect was masked in the last decade by the decline in the price of money such that a bigger house/car could be had even with a lower income. The monetary illusion momentarily ended last year, but every effort is being made to revive it, with some success. No matter. Corp profits can go up, but American wages still must come down. At the moment the reality is being expressed in lower labor demand at prevailing prices (higher unemployment).
August 10th, 2009 at 9:40 am
I find the propaganda maddening on so many levels. The condescension, the arrogance, and obviousness galls me. The fact that it is effective (on any level) scares the crap out of me.
August 10th, 2009 at 9:45 am
LB returning from London where the exact same 1930-type atmosphere prevails. Happy days are here again, the world is saved and let bonuses rain from the skies before the market crumbles quicker than England’s batting…
Hope: Echo bubble will lead to an echo crash. Treasuries and USD rally is imminent, the 4% level on the 10-yr will be defended. The I-banks have made a ton of money long and now they want to make money short.
Groty: GS don’t care where the market finishes 2009. They want to unload equities to Johnny Retail. Abby JC is being trotted out to fleece some senior citizens who might find her reassuring – it has always been her role.
Barry: Good work on the fishing and drinking. Is NILF anything like MILF? Leuthold, Kass and Mobius all turning more bearish in public statements. Everyone sees the writing on the wall now, surely?
August 10th, 2009 at 9:45 am
@ bonghiteric at 9:28 am
“Most disheartening is Obama’s and his advisors embrace of this lunacy.”
from the link provided by km4 at 7:40 am, Kunstler’s summation rings all too dead-on…
“the greatest danger this society face(s) would be its inclination to gear up a campaign to sustain the unsustainable at all costs — rather than face the need to make new arrangements for daily life. That appears to be exactly what has happened, and it didn’t happen under the rule of some backward-facing, right-wing, Jesus-haunted crypto-fascist, but rather a “progressive” party led by a dynamically affable young man unburdened by deep cultural allegiance to Wall Street. Barack Obama has been sucked in and suckered. “Change you can believe in” has morphed into “a status quo you will bend heaven and earth to hold onto.”
August 10th, 2009 at 9:50 am
Interesting move in gold. Of which LB is short.
@batmando: They just needed a few months to rearrange the deck chairs and call home. The ship is going down.
August 10th, 2009 at 9:55 am
In the car on my way back to Minny from beautiful and underrated Northport, MI (Leelanau County). Will have plenty of time (13-14 hours) to ponder the Fall in the fall coming to a town near you. Wake me up when it’s Sept and Mannwich’s green shoots summer comes to a close.
August 10th, 2009 at 9:55 am
@ LB
…, and once steerage starts sliding down the steep deck incline, the crypto-fascists will take the helm for the duration of the voyage…, and/or afterwards in the lifeboats
August 10th, 2009 at 10:03 am
Big move in AIG last week, and a huge rally in the GSEs today. More manipulation and inside information …. this may be the most transparently criminal trading market since the early 1930s.
Bloomberg was pumping the story of a rise in the VIX as September options volume increases.
They are telegraphing the crash, even as Abby Jo sings her siren song to lure the unwary onto the rocks….
August 10th, 2009 at 10:11 am
hopeimwrong says-
“I find the propaganda maddening on so many levels. The condescension, the arrogance, and obviousness galls me. ‘
the carnies trying to get the passerby’s to try their hand at a game where the odds are in the carnies’ favor
batmando quotes-
“and once steerage starts sliding down the steep deck incline, the crypto-fascists will take the helm for the duration of the voyage…, and/or afterwards in the lifeboats”
Adam Susan of the Norsefire party comes to mind
August 10th, 2009 at 10:11 am
welcome back LB@
AIG is purely a short driven rally just like the rest of the market. They will run it up until September.
I actually like Sugar (IPSU). It has been having a good rally thanks to bad weather in Brazil and India.
August 10th, 2009 at 10:22 am
@Wally
Frankly, it’s the bears who have been the primary victims of “want to believe” thinking. Not a single one of their doomsday predictions have come true over the last 6 months. They’ve been consistently wrong: they laughed at the green shoots idea, even as GDP is poised to return to growth. They claimed the stimulus would fail, yet now they’re discounting positive economic data by saying that it’s “just the stimulus working.” We’re still waiting for the “Bond Market Bogeymen” to come and get us in the night. And where’s that CRE collapse that was supposed to be imminent 3, 6 and 9 months ago?
Look, I can understand suspicion of an outlier data point. If the data set is -600k, -550k, -650k, -200k, -650k, I tend to believe that -600k is about right and toss out the -200k.
However, the data has been coming in consistently better: http://www.data360.org/temp/dsg340_500_350.jpg. But the bearish mantra has remained the same: the data is a lie, the data is misconstrued, the data is a conspiracy, ignore the data and focus on the fear. You can only say “ignore reality” so many times before reality hits you in the face, as the bears have learned to their detriment.
August 10th, 2009 at 10:28 am
Batmando,
After Kerry went down the dems were looking for anything to pick them up. Wall St. beckoned them over. The dems were Keith Richards and Wall St. was a backstage roadie flashing a little bag of China White – only the skag was millions of dollars.
August 10th, 2009 at 10:32 am
“U.S. banks to make $38 billion from overdraft fees: report”
the banks- they fuck you when THEY fail – and – they fuck you when YOU fail
August 10th, 2009 at 10:39 am
WRT International Wage Arbitration, one of the risk factors in pursuing this strategy that seems to be dismissed is the danger of serious dislocations in currency. WA is basically labor input importation (the flipside is surrender of an operation’s productive capacity- fundamentally insane to me, but what do I know). If the US dollar undergoes a significant devaluation a la Argentina, what will that do to the relationship between many US corporations who outsource and the providers of that labor input- why would a provider out of Mumbai accept a degraded currency in return for their labor product?
Another issue is quality. There is a silent crisis in quality going on and what is more- the ability to do that voodoo that we do so well is being undermined. One would do well to read up on the difficulties that Dell encountered in the 2002-2005 period as they outsourced and off-shored a lot of their customer and technical service operations under Kevin Rollins. One of their projects- a call center in Panama- crashed and burned in a very short period of time. Additionally, Dell so degraded their customer service that they lost loyalty. That was all she wrote- but at least good ole Kevy made bank- it would pain me so to think of him in Chevy Cobalt or a PT Cruiser…
August 10th, 2009 at 10:42 am
franklin411: There was too much fear at the bottom, and there is too much hope at the top. We are still in the time window when last year’s dismal numbers make the y/o/y comps easy. At some point we will return to reality.
The CRE problems and the bond market haven’t gone away, any more than the foreclosure and bankruptcy wave. Look, you are too young to see all the manipulation that is going on, but you will become more cynical with time.
My politics are fairly similar to yours, by the way, but this is not primarily a political site – my primary loyalties are to the truth, to equality of opportunity and to a culture of personal and national financial responsibility.
August 10th, 2009 at 10:43 am
Way to go, sugar.
August 10th, 2009 at 10:56 am
@LB
I’m sure there will be a top, although I’m not sure where we are in that process. And even being at a top doesn’t necessarily mean we will come down off of it–we could simply trade sideways pending further data.
My main point is that the bears have been Chicken Littles–they’ve screamed that the sky was falling and that every positive data point was actually bad so much that people stopped listening to them because they’ve been so consistently wrong. That doesn’t mean some of the bearish bogeymen aren’t real; it’s just a lesson on the dangers of crying wolf too much.
Don’t you just love Aesop’s fables? ;-)
August 10th, 2009 at 11:00 am
leftback @ 10:42
“My politics are fairly similar to [Franklin411’s]… my primary [loyalty is] …to the truth, … to a culture of …. national financial responsibility”.
IOW, we need a big tax increase on the middle class…?
(No other way to pay the bills).
August 10th, 2009 at 11:05 am
DL: We definitely do not need a tax increase on the middle class or on small business. We need to allow the bubbles to gently deflate, and we need to aggressively tax the corporate raiders and banksters who put us in this situation. It is possible to be a liberal without agreeing with Larry Summers. Social liberal, fiscal conservative.
Credit crisis, what credit crisis? It’s not over, and soon the consumer will be hoarding cash again as well:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aiaPcxn9NpYk
August 10th, 2009 at 11:19 am
Barry, year-over-year change in NFP non-adjusted is the same as NFP seasonally-adjusted. So, per John Williams, if skewed SA factors added an extra 1.1 million jobs in 10 out of the past 12 months, that means in the other two months, there should have been 1.1 million more jobs lost–it washes out over the year. Why isn’t Williams screaming about those two hugely-skewed months?
August 10th, 2009 at 11:26 am
lftbk says-
“need to aggressively tax the corporate raiders and banksters who put us in this situation”
that is about the only clawback that appears possible-
the future- the “uber rich” pay high taxes to provide social services to rest of the citizenry- who are out of work or underemployed- the rich making their riches globally- the regular folk impoverished locally-
no prospects of future prosperity- but job training abounds- to give hope that someday a job may appear that pays a living wage
August 10th, 2009 at 11:29 am
Ahab – I wasn’t aware the uber rich paid any meaningful taxes in this country today. Or was Buffet’s assertion that hi secretary paid a high higher tax rate than him false? . . . . If I am wrong please correct me.
August 10th, 2009 at 11:33 am
back in town and in touch, first thing I watched today was Rosenberg in the video section saying the market is pricing in Nirvana which I thought was funny. Smells like Green Shoots??? Buying some options on ZSL today. No longs at all but a long in UUP, which is basically like being short everything else, I now seem to be one of the very few that expects a retesting of the March low within the next 6-7 months, I’m not sure this rally is completely over just yet, but it looks very tired to me, at the very least, even if I wasn’t a bear, for trading I’d rather be generally short than long after this move up from March going into Sept/Oct period. Bullish calls everywhere. Glad to no longer be reading TBP on the Blackberry.
August 10th, 2009 at 11:36 am
I’ll clarify that I do not for one second think tax cuts are a solver of anything, nor do I think they would be a good idea right now, but I do enjoy the taxation debate and am curious.
What does “uber rich” mean to people here?
August 10th, 2009 at 11:39 am
thor-
I think you misunderstand me-
the “uber” rich should pay substantially more in taxes if no other reason than to get the money back in bonuses that were paid while they raping and pillaging the rest of the world-
my prediction for the future is that taxes from the “uber” rich will be needed to supplement the diminishing prospects of the middle class- providing social services and assistance- because they will no longer have a “living” wage to sustain themselves
August 10th, 2009 at 11:39 am
Ben – to me it means any private citizen (not a small business owner) making more than a million dollars a year or more.
August 10th, 2009 at 11:40 am
Ahab – sorry, still half asleep here ;-)
August 10th, 2009 at 11:49 am
@Franklin”
“Frankly, it’s the bears who have been the primary victims of “want to believe” thinking. Not a single one of their doomsday predictions have come true over the last 6 months. They’ve been consistently wrong: they laughed at the green shoots idea, even as GDP is poised to return to growth. They claimed the stimulus would fail, yet now they’re discounting positive economic data by saying that it’s “just the stimulus working.” We’re still waiting for the “Bond Market Bogeymen” to come and get us in the night. And where’s that CRE collapse that was supposed to be imminent 3, 6 and 9 months ago?”
Frankly Frankie – all you really have going for you is a stock market rally…
Re: Green Shoots – ANYTHING is a green shoot off an oversold condition (back in March) when the markets had endured an 18 month selloff. Companies lay off workers (in record numbers), which helps operating profits, which gooses quarterly numbers (especially since the YOY comparisons were cupcakes)…Earnings BEATS during the last two quarters were due to COST CUTTING, no top line growth…
Re: GDP – Government Spending & the Import Export differential (helped by a weakening dollar) were the only things to spark GDP…The most recent numbers aren’t even final yet…Take away the punchbowl, and GDP drops again, it’s on life support…Moreover, this type of “stimulus” is global, it is an unnatural phenomenon that is unsustainable in real economic terms.
Re: Stimulus…Obama does not deserve to take any credit for the “stimulus working”…From a sheer aggregate standpoint, it is QE by the Fed that has been doing the heavy lifting…The best thing that can be said for “stimulus” is that it kept police & teachers on payrolls, and people got extended unemployment benefits…Anecdotally, the “re-emergence” of GM from bankruptcy combined with “cash for clunkers” helped spike the July unemployment numbers…These, again, are unsustainable phenomenon…But GOOD for rubes to believe that we’ve turned a corner…
Re: The BOND MARKET BOGEYMAN…Believe me, he’s out there…If you’re already hearing rumblings about the Fed needing to RAISE RATES (in spite of the fact that the economy is very weak), the BV’s are present…It will take awhile longer I suppose…Why? Because the equity markets have staged an impressive rally…Bonds haven’t collapsed to the point that there needs to be a mass exodus…Many are probably holding bonds right now thinking that the stock market will eventually correct and there will be a temporary flight to bond safety (vis-a-vis last year)…All it’s going to take is another trillion dollar crap-spend to really make a dent…(I think it will be a 2010 phenomenon)…
Re: CRE…Short squeeze plain & simple…Also, I’m sure that this will be the next BAILOUT maneuver (which insiders are probably sensing)…You just can’t paper this stuff over…
So Franklin…all anyone really has to hold onto right now is a stock market rally…It’s the only asset APPARENTLY worth something (which it ISN’T – really)…A rising stock market improves confidence numbers…It doesn’t create JOBS (corporate treasurers are HOARDING CASH in record numbers at present)…It doesn’t make people SPEND…It doesn’t do anything but enrich speculators…When it ENDS, a panic will ensue…
You will very likely see YOUR HERO’s ratings in the polls take a dive along with the market…It’s already down perching on 50%, and Congress is down below 30%…
So I’d rather that you wait until we’ve gotten the deficit down to, hey, AT LEAST under a trillion (I’ll make it EASY 4u)…GDP up over 3% (without government incentives or spending)…a stronger dollar…and about 4 million jobs ADDED to payrolls before I hear any more comments on this subject from you…
August 10th, 2009 at 11:53 am
@ben22
“I’ll clarify that I do not for one second think tax cuts are a solver of anything, nor do I think they would be a good idea right now.”
Welcome back Ben…I’ll second your opinion…
If Republicans think they’re going to win seats in 2010 by trotting out that old idea, well, then they DESERVE to lose…They’d better come up with something fresh…
August 10th, 2009 at 11:56 am
Agreed. > $1M/yr seems a good yardstick at this point for the über-rich.
A tax on the pillagers, to aid the villagers.
LB is a poet, and you all know it.
Will be buying more 5-year Treasuries on any weakness this week.
August 10th, 2009 at 12:16 pm
@Franklin411:
“Frankly, it’s the bears who have been the primary victims of “want to believe” thinking. Not a single one of their doomsday predictions have come true over the last 6 months.”
Who are you talking about? Names please. Who do you mean with “the bears”? Could you define this label, please? And what doomsday predictions made by whom were supposed to become true within the last six months? Be specific, Franklin. Or is this just another provocation with an unspecific accusation by you using a strawman claim again?
rc
August 10th, 2009 at 12:18 pm
Generally speaking, I think those making over a million dollars a year via 1099s or w-2s are already paying more than their fair share of taxes… but surely is another group making over $1M that is able to hide their income from the IRS.. they don’t receive w-2s.. and they can account away their earnings…
August 10th, 2009 at 12:23 pm
Wage gains are also offset by decreased benefits and increased health care costs- overall meaning less support to the employee. This has been a very real situation for me personally.
August 10th, 2009 at 12:30 pm
Paul S – you and everyone else. My buddy at work is paying 15K a year for his portion of our health care insurance for his family of four.
August 10th, 2009 at 12:48 pm
“it will be another huge blow to GS and Abby’s reputation. ”
BWAAAHAHAHA Groty, really. How much more damage to AJC’s reputation could be brought about by yet another ridiculous market call? Remember just a year ago she was calling for something like 1575 or so. It doesn’t matter. Those who want to believe will conveniently dismiss those prior bad calls and buy into the hype.
By the way, juxtapose that GS call with this latest market research bit that’s really rather bearish:
http://www.scribd.com/doc/18300149/GS-August
A few takeaways:
REITs may be 40% overvalued here
Oil may go down to $45
Retailers are overvalued because the consumer is in trouble and tapped out
August 10th, 2009 at 12:56 pm
karen,
I’m more in-line with your thinking. I do get really bothered when people cite $250k year as “rich”, please, not even close, a very good income yes, rich, nah.
cvienne,
sadly though, it’s a constant to still hear republicans call for it as one solution to the crises, (tax cuts)
@thor,
my biz partner pays about 14k per year for his health insurance, he has three kids, but we get a tax write-off so yes we have to front the premium but it isn’t that big of a deal for us. I know it’s not that way for everyone, just sayin.
On another note, I caught up on some of the threads I missed while out of town, I saw there was a thread with over 300 posts which was cool but why would people waste time arguing how many jobs have exactly been lost since Obama said whatever. Newsflash, it’s a lot of jobs that have been and will still be lost, things are still very bad on the job front and aren’t getting better any time soon. What esle is there to say about it? Getting caught up in monthly details or specific data points like this seems to distract from the bigger issues that we will be dealing with for years to come. Real entertaining to read though.
August 10th, 2009 at 12:58 pm
“another group making over $1M that is able to hide their income from the IRS.. they don’t receive w-2s”
Agreed. Transparency should be key, and simplification of the tax code is the way to achieve it. There are way too many deductions and loopholes that we don’t need.
August 10th, 2009 at 1:01 pm
speaking of the AJC call last week while I was away, her advice is about as valuable as ben steins, iow, it’s not worth shit. It’s so funny to me how many people want to bash a guy like Prechter’s investment track record every chance possible but when a permabull like her trots out this kind of nonsense it only gets cheered.
August 10th, 2009 at 1:05 pm
anecdotal but while at home during my vacation I talked with a few guys that build rail cars in Erie PA at the GE plant. They have, right now, exactly 0 orders for new cars next year. I asked them what was normal by this time of year, and I trusted the answer as both of them have been there over 30 years at the plant, they said, by September each year they typically would have 35-40 orders for the coming year. Obviously both were worried about job stability, spending wasn’t exactly top of mind, though one did as me about CFC, if that helps you get to the root of what that program is really all about.
I saw Karen mention the shippers last week as well, worth paying attention to, along these same lines.
August 10th, 2009 at 1:10 pm
ben
Given the anecdotes of rail cars being stored on miles long lengths of track around the country and the rail activity data that is very depressed still, I don’t doubt that anecdote at all. Very daunting and hard to explain away; not that people aren’t trying to.
August 10th, 2009 at 1:16 pm
Troy – I’m not sure that’s anecdotal. I pass by one of the Southern Pacific rail yards on my way out to Palm Springs every other weekend. I count the number of engine cars sitting idle on the track every trip (ocd anyone?). When I started counting last year the length was .6 miles. Last weekend I drove home and it’s crept up to 1.3 miles.
August 10th, 2009 at 1:17 pm
b22-
so . . .the GE guys- zero orders 8 months into the year-
and they’re still employed- for how much longer I wonder?
August 10th, 2009 at 1:24 pm
OT – but for anyone thinking the BRIC countries were good at working together, I’m sure you’ve all seen the stories on corporate espionage between China and Brazil . . .
August 10th, 2009 at 1:24 pm
The £ has made a big negative move since peaking at $1,70 last week (naturally the peak occurred while LB was encamped in London W1). Probably the beginnings of a $ rally against the £ and € – at long last. All it took was a simple BoE QE announcement and a 3-4% devaluation was achieved almost overnight. Fed watchers, take note.
ben: I wonder how business is at Bombardier up in Quebec? They have produced most of the passenger rail cars for subways and the like in recent years. Eventually we may see more investment in transportation infrastructure.
It’s only when you see Tokyo, Frankfurt, Berlin and even London that you realize how 3rd world the US is in many surprising ways. BTW, the Brits are talking about super high speed rail, Japanese-style, to try to eliminate flights inside the country, which are a carbon disaster.
August 10th, 2009 at 1:25 pm
Thor
We’re not disagreeing here. Your observation is anecdotal.
http://dictionary.reference.com/browse/anecdotal
Based on personal observation, case study reports, or random investigations rather than systematic scientific evaluation: anecdotal evidence.
You’re reflecting a common misunderstanding of the word; that it implies a questionable veracity. Not so.
So you see, we agree!
August 10th, 2009 at 1:25 pm
ahab,
yes they are, but no overtime, which is why I find the lengthy discussion about this month or that months job losses or revisions pointless. These two guys didn’t care much right now, which I thought was odd, the same one that asked about CFC mentioned that he heard things were getting better and that the stock market was up big, they are enjoying the summer, fishing for yellow perch in the lake, talking about opening week for PSU on 9/5, etc. The same reason I believe there is a growing negative social mood that will, in the fullness of time, shows its ugly face again. Some people are already in a lot of trouble, but it looks to me like a lot more are going to feel that trouble in another 6-7 months. I’m just trying to get ahead of that trend. It’s always uneasy going against what everyone else is doing, I felt this same way in February.
August 10th, 2009 at 1:26 pm
“When I started counting last year the length was .6 miles. Last weekend .. it’s crept up to 1.3 miles.”
The Baltic Dry has turned down as well, now that commodity stockpiling and inventory rebuild are over. Good spot.
August 10th, 2009 at 1:28 pm
“Tokyo, Frankfurt, Berlin and even London that you realize how 3rd world the US is in many surprising ways.”
I’ve been asking the same question myself – why NYC doesn’t have a direct high speed rail link to the airport? Every major city in developed countries – Paris, Amsterdam, Singapore, London has it. We are so backwards.
August 10th, 2009 at 1:28 pm
Troy – yes indeed ;-)
August 10th, 2009 at 1:32 pm
@LB,
not sure and good question re: Bombardier. I find these sort of things to be good measures of economic activity though. I haven’t been to Canada in years, used to frequent Niagra Falls before I turned 21 as they had a lower drinking age and it was only about 2 hours from home. Had some great times at the International House of Beers. Also, nice observation on the currencies. I’m underwater on my dollar long right now but that is more of a longer term strategy that I set up without a stop, the dollar is going to get much stronger imho. Looking to see what the Fed has to say later this week, not that I think they can do anything anyway. Lately everyone is so convinced that they “provided liquidity” yet they worked non-stop to do so for over a year and not only did it not work, we crashed. for me, it’s waay to early to call what they did a success and if it does “work” as Barry mentions in his book, the unintended consequences won’t be known for years to come.
August 10th, 2009 at 1:32 pm
“I’ve been asking the same question myself – why NYC doesn’t have a direct high speed rail link to the airport?”
Because this is a Banana Republic… that money was spent ensuring bonuses for Lloyd Blankfein and John Thain.
August 10th, 2009 at 1:34 pm
lftbck-
“Brits are talking about super high speed rail”
I always thought that would be a good idea in the heavy traffic corridors of the east coast US- let’s say DC to Boston and every majot metrolitan area in between-
Hong Kong’s subway system is incredible- super clean- super efficient- doe smake you wonder why we don’t make investments in efficient mass transit- bump the gasoline tax to pay for it- and curb gaoline use at the same time-
never happen I know- but still a good idea
August 10th, 2009 at 1:34 pm
didn’t amtrak get a lot of money in the stimulus?
high speed rail would be great here, being on the east cost I think I would use it all the time, especially if it ran from say Boston to DC, but I won’t hold my breath waiting for that to actually happen.
August 10th, 2009 at 1:35 pm
ahab,
you just read my mind.
August 10th, 2009 at 1:38 pm
Acela is “supposedly” a high speed rail network connecting Boston, NYC and D.C. But as you know Amtrak is a quasi government owned company. Amtrak is plagued with frequent breakdowns, budget overruns and bureaucracy. This type of public/private partnerships never really work great.
Case in point for quasi govt agency is US Postal Service. Their days are numbered.
August 10th, 2009 at 1:41 pm
b22-
dude that’s weird- with the same time stamp no less- also-
everyone forgive my egregious spelling errors- my keyboarding skills leave much to be desired
August 10th, 2009 at 1:42 pm
It’s so obvious that it should happen that one can only assume that the lobbyists for oil and autos have blocked it.
Blankfiend also wasn’t interested in the project, as he has a limo take him to the private jet.
BTW, Lloyd’s boys are selling the SPOOS and buying the TWOS today. SPX 1010 is now resistance.
Acela is a high speed rail network like CNBC is a responsible financial news network.
August 10th, 2009 at 1:43 pm
manhattanguy-
what of – let’s say Hong Kong- certainly that is a public enterprise?
August 10th, 2009 at 1:57 pm
manhattanguy – re: airports – some cities have them – SF for one. I’m not a real big fan of high speed rail – especially comparing the US to the EU. How many people in Europe take the train from London to Moscow? The distances we are talking about here, versus there, are massive.
August 10th, 2009 at 1:59 pm
Quasi government owned: The Fed and… GS for that matter.
What a lovely world.
August 10th, 2009 at 2:02 pm
@ben22
Just about EVERYONE is pining for high speed rail in the DC – Boston corridor…
Problem?
There are so many hoops to jump through…Not the least of which is the fact that you’d have to get it through the legislatures of 7 different states…
There are also stupid, seemingly minor, but actually MAJOR structural engineering issues…One such is THE INTERNET…Back in the early 90′s, the main telecom trunkline (before the big fiber optic buildout) was MAE EAST (which connected the DC-NY corridor and was the virtual backbone of the whole internet…
When they figured out they needed to lay down fat underground FO cables, the easiest solution was to use the same Amtrak corridor so there would be no problems laying the stuff down…It’s a tight corridor…SO…a major DIG along those same lines, would have to involve some major overhaul of the very area that routes the largest amount of internet traffic in the world…
August 10th, 2009 at 2:03 pm
@Thor
In my post, I was referring to having a rail link that connects the Manhattan to major airports.
But I like to see a high speed rail link both on the east coast and west coast connecting major cities. I believe one of Obama’s stimulus plan was to construct this on the west coast connecting SF and LA. Not sure when it will materialize.
http://gas2.org/2008/05/13/california-building-220-mph-high-speed-train-from-san-francisco-to-la/
August 10th, 2009 at 2:09 pm
@Thor
Distance between SF to LA is around 400 miles. France has a high speed rail link connects Paris with Marseille (450 miles). It’s not like 1000s of miles. This reduces traffic congestion and pollution. I think it’s LONG overdue.
August 10th, 2009 at 2:11 pm
@manhattanguy
It’s almost 2010 for crying out loud!
Jeez, back when I was 20, I figured we’d all have flying cars by now!
August 10th, 2009 at 2:12 pm
manhattanguy – I would imagine the high speed rail project they have slated for CA will suffer the same fate as BART line connecting SF with it’s airport and the new Bay Bridge. It will be mired in lawsuits for decades, and end up costing two to three times it’s original cost. The new eastern portion of the Bay Bridge was approved back in the early 90′s after the 89 earthquake. It’s just now getting finished up. . . . .
I grew up on The Peninsula up in San Francisco, which is the group of cities directly south of San Francisco (bordered by the ocean and the bay). This is the corridor that has been approved for high speed rail going from LA to SF. Many of the cities – including the one I grew up with – are in the early stages of suing the high speed rail authority over it’s proposed route – they either want the entire route through the peninsula (40 miles) placed underground, or they want the rail system to end in San Jose – 50 miles short of San Francisco.
August 10th, 2009 at 2:14 pm
“The distances we are talking about here, versus there, are massive.”
That’s WHY you have trains that go FASTER than canal barges, old chap.
Go to Japan or France, it’s REALLY an eye opener, eh cvienne? Very interesting about the FO network.
Use the middle of I-95 and I-5 would be my suggestion – and put it up in the air. There is your existing corridor.
Not very scenic but at 220 mph you can’t see much anyway…
August 10th, 2009 at 2:15 pm
@Thor
“they want the rail system to end in San Jose – 50 miles short of San Francisco.”
Classic politics…The main “timesaver” in these systems are getting you the last 50 miles to downtown…So they want to spend MEGABILLIONS and leave out the most worthwhile part of it…
August 10th, 2009 at 2:15 pm
Manhattanguy – I agree that high speed rail is a good option to link specific metro regions (LA – SF, Chicago – St Louis, DC NYC). I’m just not convinced it has much usefulness is getting people from say, LA to Seattle, or Miami to NYC . . . .distances are so much greater than they are in Europe.
August 10th, 2009 at 2:19 pm
@LB
The Shinkansen system in Japan was about the most amazing thing I’ve ever been on…
In Europe, the Eurostar, unfortunately for me since I used it mostly in Italy, was STILL subject to delays that only Italians are capable of…
I reiterate TO ALL…They should have started thinking about high speed rail before they laid down all the fiber optic lines for the internet…Many and most are laid alongside track network systems…
You’d basically be DIGGING UP THE INTERNET to put high speed rail in in most places…
August 10th, 2009 at 2:20 pm
Also, simply having a high speed rail system does not mean it is the primary travel option for people – what percentage of people who go from London to Paris or from Paris to Madrid take the train compared to the number of people who fly . . . . I don’t know the answer to this, but i wonder if the number of people flying these routes are orders of magnitude higher than the number of people who take the train . . . .
August 10th, 2009 at 2:20 pm
lb, manhattanguy, is it hot in ny today?
can’t join the high speed rail discussion because it is too big an upset.. can you imagine how perfect CA would still be in retrospect?
August 10th, 2009 at 2:20 pm
@Thor
But most other developed countries have high speed rail links. Both TGV in France and Bullet train system in Japan are both profitable and well managed. Why don’t we make the leap forward?
@cvinne: yea whatever happened to flying cars? They say that if the type of advancement we made in the microprocessor industry was made in the car industry, we would have flying cars by now. But the most advancement car industry managed was to provide sunroof and iPod hook-ups in cars as an accessory.
August 10th, 2009 at 2:24 pm
@Karen touching 93 degrees. Just took a cold shower.
@Thor
“LA to Seattle, or Miami to NYC . . . .distances are so much greater than they are in Europe.”
Not proposing to cover huge distances. I agree air travel is more suitable for these distances. I am talking about connecting major metro regions within a state (CA or NY). We have way too many cars on the road.
August 10th, 2009 at 2:26 pm
It takes less time to get from London to Paris than it does to go through the bleeding security at the airport….
or to get from JFK to Manhattan in a cab on Friday afternoons !!
Look this is all about oil prices. Aviation will eventually dig its own grave except for transoceanic and transcontinental flights.
NO-ONE should comment on high speed rail until they have experienced the Shinkansen. 200 mph and you can have extremely edible sushi served to you at your seat. It’s a wonder LB didn’t stay on as a gaijin.
August 10th, 2009 at 2:27 pm
Another point Re: high speed rail
The fact that most Americans are MISSING when it comes to justification for the expense to build such a system is…
Gasoline is still too cheap…Americans have been the beneficiaries of subsidized oil for the past 3 and a half decades now…We don’t pay $10 a gallon, we don’t pay $6…We BITCH when we pay $4…
Until gas gets to over $6 a gallon (and STAYS THERE) for more than 2 months, more than 6 months, more than a year, there will be no approvals for any high speed rail systems…
So talk all you want…And before you do, you’d better have WIRELESS INTERNET ubiquitous and able to handle the full gamut of dataloads…
August 10th, 2009 at 2:28 pm
Manhattanguy – “connecting major metro regions within a state (CA or NY). ”
We’re in full agreement – I for one, would welcome a high speed rail link between SFO and LAX – the flight itself is an hour and 20 minutes or so but the delays at the airports can often delay you several hours.
August 10th, 2009 at 2:29 pm
@manhattanguy
“We have way too many cars on the road”
At least they’re not clunkers :-)
August 10th, 2009 at 2:31 pm
@LB
It’s like you and I are having one conversation [Shinkansen & oil prices], and everyone else is having a different conversation…:-)
August 10th, 2009 at 2:31 pm
cvienne,
didn’t even think about those issues on how to build it out. I like lefty’s idea, put it up in the air. I despise I-95, drive it every day.
August 10th, 2009 at 2:37 pm
cvienne-
that’s why there are things called taxes- which needs to be increased- quit susidizing highways at the expense of other modes of transporation-
and- you are correct- if gas is taxed heavily enough- then it changes behaviour and enables other modes of transporation to become competitive- reducing our need for foreign oil- and making our cities more liveable
August 10th, 2009 at 2:41 pm
“Karen touching 93 degrees?”
The mere thought has raised the temperature in Manhattan another degree.
“lb, manhattanguy, is it hot in ny today?”
It is now that you’re here, Mistress. Bikini trading poolside today, by any chance?
August 10th, 2009 at 2:42 pm
@ahab
I’m all for that…I say slap a 100% surtax on gasoline and use the proceeds to begin building out an intelligent system…
Besides getting the new system started, it would also have the effect of many people switching over to NATURAL GAS burning vehicles (like the way I outfitted mine)…
We have all th nat gas you’d ever need in this country and we wouldn’t have to send those dollars overseas…
Obama clearly hasn’t thought this one out…Boone Pickens was all over him with the idea, yet Obama still wants to push dickwad ideal like electric cars…What a moron!
August 10th, 2009 at 2:42 pm
Another thing to think about Re – urban sprawl. Good friend of mine used to be a civil engineer back in the early 2000′s when the whole idea of a high speed rail link between SF and LA got started. He worked on the early environmental studies for the link – at the time they had it broken into segments – the section he was working on was the central valley (I-99 Corridor). One of the major issues they were dealing with at the time was what a high speed rail system running up the central valley cities (Bakersfield, Fresno, Sacramento) would do to urban sprawl.
For instance, imagine a person going to work in Los Angeles from Bakersfield in 45 minutes on the high speed rail system – housing in Bakersfield, as it is in all the central valley cities, is significantly less expensive than it is in Los Angeles. At the time my buddy was working on this project this was a major concern is it would make most of the cities in the central valley within commuting distance of both San Francisco and Los Angeles . . . .imagine the urban sprawl.
Of course, now that housing has tanked we’re dealing with a different scenario . . . .
August 10th, 2009 at 2:47 pm
“. . . .imagine the urban sprawl…..”
and now we have, what exactly??
August 10th, 2009 at 2:49 pm
@Thor
I was going to mention what you just said…
In reference to Japan…The EARLIER cities serviced by the Shinkansen (like Tokyo – Osaka corridor) were in a way that you could get the system all the way downtown (and connect it to the local systems via a mezzanine structure to the main central station)…
Nowadays – if a metro area already has a nebula system, the more cost effective idea would be to connect the INTERCITY routes via the frontier parts of the INTRACITY routes…
August 10th, 2009 at 2:49 pm
LB – I’m not saying I agree or don’t agree with the argument. I’m giving you scenarios under which any high speed rail system in my state will be killed.
August 10th, 2009 at 2:53 pm
I just posted this on the temp help thread but people should watch the summers video linked here. revealing,
and I’m still shaking my head at the:
“we didn’t know how bad things were, that’s what the revisions told us” in relation to the GDP in Q4 and Q1.
August 10th, 2009 at 2:54 pm
…9 straight RED hourly candlesticks on the SPX…
August 10th, 2009 at 2:57 pm
@CV if you look at the hourly candlestick on a 6 week time frame, it looks like its at support here. It might bounce off. Let’s hope not.
August 10th, 2009 at 2:58 pm
[...] CEO Barry Ritholtz also notesthat 247,000 jobs lost in July would’ve been the worst month of job losses in most recessions [...]
August 10th, 2009 at 2:58 pm
cvienne-
I like you idea- natural gas sound like a step in the right direction-
when I was out in California a few years back- the cab driver’s car was natural gas- first time I had seen that in use- he said it cut down on his trunk space a bit but preferred it to gasoline – not sure if there are plentiful refueling stations for nat gas in California- but maybe he refueled at his company’s facilities
August 10th, 2009 at 3:07 pm
Ahab – probably more and more all the time. the ports of LA and LB have mandated that all trucks coming into and out of the ports need to run on natural gas.
http://www.portoflosangeles.org/newsroom/2009_releases/news_050809_lng.asp
August 10th, 2009 at 3:08 pm
@ahab
That’s it…I got turned onto the idea in Europe as a way to cut down on $7 a gallon [equivalent] gas…
I have a storage tank right on my property…
Pickens has a big investment in a company CLNE that has fleet filling stations…
Even Pelosi, I believe, owns shares in that…
August 10th, 2009 at 3:10 pm
@manhattanguy
Oh yes definitely it SHOULD at least try to get support here…Besides 6 weeks ago, there is another 10 week time frame that offers the same level of support…A breakdown could take us to 982…
August 10th, 2009 at 3:12 pm
@Thor
“I’m giving you scenarios under which any high speed rail system in my state will be killed.”
Interesting discussion to even IMAGINE from a state that was handing out IOU’s just a month ago…
R they still doing that?
And if so…what it it?
IOU’s FOR CLUNKERS, or something of that nature…Obamanomics at its finest!
August 10th, 2009 at 3:20 pm
While we are on transportation, some real estate guys on a joy ride killed six people in NYC this week.
August 10th, 2009 at 3:21 pm
Cvienne – not sure if we’re still handing out IOU’s – it hasn’t really been in the news lately. One of the stories on the front page of the LA Times this morning though was that courts had added 1 billion to the budget deficit this year. Special interest groups are suing the state over the budget cuts and winning. Sad, but true.
August 10th, 2009 at 3:33 pm
97 beautiful degrees here in DC
Thor-
“Special interest groups are suing the state over the budget cuts and winning. Sad, but true.”
maybe the next cuts should be in the judiciary
August 10th, 2009 at 3:42 pm
Speaking of rail link to Airport
NYT: Trains and Vans May Beat Taxis to the Airport
http://www.nytimes.com/2009/08/11/business/11transfer.html?hp
August 10th, 2009 at 3:49 pm
The NYC housing meltdown is getting closer, with condos predictably being the weakest link:
http://www.calculatedriskblog.com/2009/08/new-york-condo-shadow-inventory.html
Drip, drip, drip….
August 10th, 2009 at 3:52 pm
@LB
Condos…like the clap…
easy to get…can’t get rid of…
August 10th, 2009 at 3:55 pm
LB has given up commenting on the computer-driven liquidity injection one used to refer to as “the market”.
In general, however, this looks like the most convincing upward move by the dollar in some time.
August 10th, 2009 at 4:05 pm
As I said earlier, market got support at the 60 min candle chart. Unless we break that support, we continue to move upwards. A meaningful breakdown may not happen until the traders come back from the Hamptons in early Sep.
I also fail to see Dollar to equities correlation in much the same way as I don’t see Oil to equities correlation. They are all moving in sync at this point.
August 10th, 2009 at 4:10 pm
Gold and China showing signs of weakness already. Keep an eye on oil, it will probably be the next to crack.
Not expecting anything big, just a few indications that the ONE TRADE $ hedging may be coming to an end.
August 10th, 2009 at 4:24 pm
I don’t think so boys re: dollar as one trade coming to an end.
The turning points haven’t matched up perfect since that trend started, I don’t think it’s over, or at least, it’s to early to say that at this point imho.
August 10th, 2009 at 4:32 pm
rootless_cosmopolitan,
>> Who are you talking about? Names please. … … Or is this just another provocation with an unspecific accusation by you using a strawman claim again?
C’mon, surely you’ve seen “see you at SPX 150″ posted here from time to time. I don’t think F411′s characterization of most of us on this board is so unfair that you need to take him to task for it.
My 1 cent. (Was “2 cents” but I’m deleveraging…)
August 10th, 2009 at 4:34 pm
Agreed. I think we will know when it is over.. oil breaking decisively below $60, for example, or gold below $900.
August 10th, 2009 at 5:07 pm
manhattanguy Says:
August 10th, 2009 at 10:11 am
I actually like Sugar (IPSU). It has been having a good rally thanks to bad weather in Brazil and India.~
~~~~~~~~~~~~~~~~~~~~~~~~~~
Funny you mentioned sugar earlier today. It’s such an interesting story that I had to put out a report on it today. Market Vane bullish consensus hit 91% today, so we’re heading for some sort of sideways/lower congestion very soon, but I still see higher prices over the next several weeks. Let’s understand one thing, we’re trading in a panic spike now, so it can get dicey, but will certainly be “exciting,” or nauseating as the case may be.
August 10th, 2009 at 5:08 pm
is anyone bored enough to try and figure out what the timing strategy of going long each day around 3 pm since the March lows, with or without leverage would have generated in terms of ror through, well, through today? I would think just sticking with that strategy would have maybe double or tripled the markets performance since the March lows. It always seems so simple in hindsight.
August 10th, 2009 at 5:10 pm
@AT,
Do you have any thoughts on Cocoa? I’m not sure if you even look at other things but figured I’d ask. Wave guys have been buzzing about it. Never traded foods here outside of DBA, but that’s not even close to the same.
August 10th, 2009 at 5:30 pm
so . . . if I invest in Cocoa Puffs- I get the best of both worlds right?
how is rice doing?
August 10th, 2009 at 6:50 pm
cocoa looks sort of like a “mixed bag” to me….that pattern is not so clear. There’s this tendency of traders to bid up “associated” commodities when one particular member of a complex launches (‘cuz all the rest look so ‘cheap’), as with sugar currently….so in the softs/grains sugar is acting like the big pole in the middle of the circus tent….it’s raising up the others on the periphery.
August 10th, 2009 at 7:27 pm
ahab,
I’ve been long Cap’n Crunch since around 92′
August 10th, 2009 at 7:43 pm
@ben22
I’m just catching up on the last three hours of posts here after a few hours gym time…
1. Agreed on USD…I’m very happy on the last three days…Actually, I’d like to see a nice reversal followed by strong support, plus a simultaneous anti move in China, oil, gold & silver to have me convinced…But as Tom Cruise said in “Top Gun”…”It’s looking pretty good so far”…
2. Andy – Thanks for both the S&P scenarios & the dollar & euro scenarios…You never cease to amaze me…Especially the LEVEL approach to it…
Interestingly – it almost seems like FOREX is going to be “hanging chad” for the next 6 months…
August 10th, 2009 at 7:46 pm
BTW
I already have some “synthetic” long dollar/short commodity plays which I initiated last week…
I was buying some out of the money Jan 2011 FCX puts…
August 10th, 2009 at 8:07 pm
mmm- cap’n crunch-
weaned myself about off of those about ’73 or so
August 10th, 2009 at 8:23 pm
@ahab
I remember when I was a kid, I used to SEPARATE all the Cap-n-Crunch from the crunchberries…
Furthermore…I used to separate all the M&M’s into their respective colors…& even separate the Lucky Charms from the cereal into marshmallows and furthermore the marshmallows into their individual charms…
CLEARLY I am a deranged individual :-)
August 10th, 2009 at 8:32 pm
…although maybe I just WAS a deranged individual…because I have hardly touched a box of cereal in the past 25 years…UNTIL THIS PAST WEEKEND…
…and so ben…this applies to your post…
“Do you have any thoughts on Cocoa? I’m not sure if you even look at other things but figured I’d ask. Wave guys have been buzzing about it. Never traded foods here outside of DBA, but that’s not even close to the same.”
My neice & nephew (twins – not the LB twins – but TWINS) were out at the farm this past weekend cause my sister & her husband were playing in a tennis tournament nearby…I was babysitting…
In any case…COCOA PUFFS were the breakfast of choice (if that helps you Ben)
It was weekend full of cocoa puffs, wakeboarding on the Potomac, and ROCKBAND 2…I gotta tell you…My nephew plays a mean base, my neice is a good drummer, and I can sing my ass off…
THAT’S how we roll…In two days, our band, “The Bilge Pumps”, have over 640,000 fans!
August 10th, 2009 at 8:33 pm
cvienne-
deranged but clever
August 10th, 2009 at 8:58 pm
cv/ahab –
cv is not deranged, afterall
cv is arranged, indeed
“i separated out all of the…..”
August 10th, 2009 at 9:04 pm
@Wes
Correction: That was my FORMER self, so I WAS arranged…Now, perhaps, I’m deranged…
I never did the same to Chex mix though (so maybe there’s hope)
@ahab
You’re only about 40 miles from me…Did you just hears some MASSIVE THUNDERCLAPS? It sounded like a BOMB to me, and now it’s raining like hell (thank goodness – cool off from the 100 degree temps)…
August 10th, 2009 at 9:06 pm
Actually…I’m going to go stand outside for awhile (vis-a-vis) Tim Robbins in Shawshank Redemption and enjoy this…
August 10th, 2009 at 9:59 pm
cvienne-
thunder and lightening but no rain- and I am just across the river- when I canoe across the Potomac puts me on the old canal road in Montgomery County – bit west of where River Road and Seneca Road intersect-
in fact I swam across the Potomac at Great Falls Park Virginia side to Great Falls Maryland side- my son jumps the cliffs on the Maryland side-
70 ft jump no less- crazy wanker
August 10th, 2009 at 10:12 pm
@ahab
Wanker? ru Australian?
I’m many different sides of the Potomac…I’m up in Howard County right now…A nice place…will hang onto for awhile, but I’m not long for…
The more recent part is out in Jefferson County West Virginia…Got a boat now, and LOVE the Potomac…
Rafting & tubing down by Harpers Ferry, & just speedboating up and down between it & Sheperdstown…
Great Rain here just now…BEST soaking of the year…What a relief!
u into fantasy football?
August 10th, 2009 at 10:13 pm
Weather – I’m so jealous.
I used to separate the marshmallows out of Lucky Charms and eat them with milk. OCD and stock trading are probably a good combination.
August 10th, 2009 at 10:20 pm
Damn you leftback. You beat me to the MILF joke.
August 10th, 2009 at 10:23 pm
@Thor
I never realized how much I ‘missed’ weather until I got out of SOCAL…
This thunderstorm…I just laid out in the backyard and got SOAKED for about 15 minutes…I’m shivering cold right now (after a 100 degree day)…
…but I’m happy as hell!
August 10th, 2009 at 10:24 pm
Cvienne – that’s so cool, I haven’t seen rain since May
August 10th, 2009 at 10:27 pm
@Thor
The “fringe” (frontier) plants & vegetation are happy too…
The ones that aren’t irrigated…
August 10th, 2009 at 10:42 pm
cvienne-
tubed down the Potomac a time or two at Harpers Ferry- right where the Shenandoah and Potomac converge- you use to be be able to put in right at the park- but don’t believe it is allowed anymore-
still have the tubes no less- I can get to Harpers Ferry- route 9- probably about 40 minutes or so-
haven’t been there in quite a while- can’t remember exactly- but did they cut off access to the historic part of town- use to be able to drive right into town- but not sure if that’s allowed anymore-
the AT cuts right through there- across the RR bridge if I remember correctly- near an old historic church-
very cool area to say the least
August 10th, 2009 at 10:53 pm
cvienne-
also- re fantasy football- big fan of football but don’t follow the stats enough to play fantasy football- my younger son just started a fantasy team this year (sadly he picked Kurt Warner as his QB who appears to have ongoing hip problems)-
my son will be playing JV this year at Potomac Falls HS- pretty good hitter- his name was announced on the intercom many a time his freshman year
August 10th, 2009 at 10:58 pm
@ahab
Anyone can still tube the same corridor (either way – above HF on Potomac starting at the dam, or down the Shenendoah)…
So I could tube…but above the dam on the Potomac side is a long stretch of river (mostly over 10 feet depth so most speedboats don’t dig far enough to hit bottom unless the river is running VERY low)…My farm is up there about 500 yards off the river…
OF COURSE you can still drive into downtown Harpers Ferry…Me, my sister, her family (and two of their friends) just had dinner at a little tavern there this past Saturday…The bridges at the instersection that cross the Potomac River form a part of the Appalachian trail (in fact – the EXACT midway point)…