1/7/10 Day After Report: Take This Jobs Report and Shove It
Oh shit was it on yesterday as macro news flew faster than Goldman subprime securitizations in 2005 or upward price target revisions on the S&P 500 in the last week (1,450, 1,500, does Money McBags hear 2850? Sold to the witch doctor in the back).
The macro news included the B(L)S reporting their non-farm pay roll numbers in a release more anticipated than the release of Edmund Morris’ Colonel Roosevelt (and no fucking joke here, Money McBags waited nine fucking years for that as the first two in the trilogy were jizztastic) or the release of Alice Eve‘s bra in Crossing Over (slightly more jizztastic). But it wasn’t just the jobs report, as The Bernank spoke in front of the Senate Budget Committee and let everyone know that the recovery in 2011 will be “moderately stronger” than in 2010 (though “moderately stronger” in the way that Stephen Hawking is “moderately stronger” than a feather), while USB and WFC lost their fraudclosure case in Massachusetts’ Supreme Court as their “my dog ate the documentation” defense didn’t work (of course they now say they will appeal and use the dreaded chewbaca defense). Fucking A, there was so much macro news that CNBC almost ran out of talking heads (and note to the young ladies reading this, it is never appropriate to talk while giving head).
But let’s start at the beginning with the jobs number where the private sector added only 113k jobs which was ~65k fewer than witch doctors had guessed as apparently their crystal balls contracted epididymitis and no longer work properly. And yet despite the fact that adding 113k jobs isn’t enough to absorb the 125k-150k new entrants in to the work force each month (new entrants of course known as “pre-unemployed”), the unemployment rate dropped from 9.8% to 9.4% in a mathematical sleight of hand more devious than the old “pull my finger” trick.
Anyway, Money McBags went through the Employment Situation Report, Table B of the B(L)S’ supporting data, and John Keynes’ biography (subtitled: “Suckers”), for all of you so you won’t have to rely on the headlines or misinformation in trying to interpret the details. Below are Money McBags’ seven thoughts on the data:
1. First of all, headlines touting the drop in the unemployment rate as positive are more absurd than editing the language of Huck Finn or casting Ellen Degeneres as a leading lady in a romantic comedy. That’s because the reason for the drop from 9.8% to 9.4% wasn’t because more people found work, rather it was because more people found looking for work to be too fucking hard, big difference. This led to a decline in the labor force participation rate to 64.3% which was a 25 year low and a result of the unemployed losing more hope than Kathy Bates’ vagina. If the labor force participation rate had stayed at last month’s way below the mean 64.5%, the unemployment rate would have dropped to only 9.7%, but headline writers around the country rejoiced at the lower rate.
Given this, Money McBags has a new strategy for Hilda Solis (besides maybe wearing some brighter colors) and the (No) Labor Department which he is calling the “Fuck Off” strategy. It’s really rather simple, see, instead of spending so much money on job placement services and job creation, just tell the unemployed to “fuck off.” Yeah, it might not be great for PR, and sure it will lead the US economy to eventually fall off a cliff worse than John Edwards political career did, but this is a nation of short-term results and short-term gratification (seriously, has anyone made it through more than the first 90 seconds of a Hanna Hilton movie?) and what quicker way to get those kind of results than by just kicking the unemployed completely out of the unemployment calculation.
Money McBags would call this brilliant, but it’s actually more than that, it’s fucking brilliant. So let’s just drop the labor force participation rate to 49% by “re-labeling” the 14.5MM unemployed people as discouraged, and all of a sudden we have 0% fucking unemployment. Problem fucking solved at no cost, just the click of a button as unemployment is merely a semantic clerical error. Now for his next trick, Money McBags will attempt to translate Thomas Pynchon’s works in to English (and see, that’s funny because he actually writes in English) and get money shots in to lesbian porn.
2. The other positive spin on numbers (other than the delightful reduction of the unemployment rate discussed above) was that the last two months of data were revised upwards by a combined 70k (and yep, that’s the amount by which this month’s numbers missed guesses, so it’s good to know the analysts at the B(L)S are competent enough to use goal seek). So suck on that data measured two months ago (and credibility). Money McBags anxiously awaits next month’s NFP miss only to learn that the miss was made up for by an extra 80k jobs the B(L)S just learned about that were added in September of 1984 and were related to the construction of the planet Gullible.
3. Of the 14.5MM unemployed, 6.4MM were long term unemployed (so 8.1MM people are what we here at the award winning When Genius Prevailed call “pre-long-term unemployed”) and 2.6MM people were “marginally attached” to the labor force and thus not in the calculations (and they were marginally attached to the labor force in the same way that vaccines are marginally attached to causing autism or Miley Cyrus is marginally attached to panties). If we added the marginally attached back to the labor force, then we’d have ~11% unemployment, so lets just keep them out so the rally can continue and the inconceivable Lloyd Blankfein’s bonus can grow which will finally allow him to buy that toupee made from antimatter and the Mona Lisa’s smile.
4. This part was a little confusing to Money McBags so it is possible he is missing something so feel free to speak up if this makes sense to you. The seasonally adjusted absolute number of unemployed went down from 15,041k to 14,485k, so by 556k. Yet new jobs added only 103k and the dwindling labor force participation rate reduced the unemployed by only ~260k (labor force participation went from 153,950k to 153.690k), so um, where the fuck did the other 193k unemployed people go? No really? Perhaps they were out collecting underpants.
|Reduction in Labor Force||(260)|
It probably has to do with the seasonal adjustment or the B(L)S’ refusal to carry ones, but fuck if Money McBags knows.
5. Julia Stegner is hot. This has nothing to do with the jobs report, but it is a fact of which you should all be aware.
6. Yeah, it’s great, the private sector added jobs, but here is the dirty little secret that no one wants you to know (though it’s not really a secret and isn’t all that little), the government is shedding jobs like Andrew Jackson shed his cabinet in the Petticoat Affair (though this time the government has more than one whore to blame). With tax receipts drying up, state and local governments are more fucked right now than birds in Louisiana or Taryn Thomas’ colon. And yet the market seemingly ignores another 10k public sector jobs lost, so keep your eye on this, though keep your eye on this too.
7. Of the 113k private sector jobs added, ~16k were temporary jobs and 24k were the result of the B(L)S’ birth/death model which is such a big black box that it makes Robert DeNiro salivate. So if we deduct out the ~16k temporary jobs and realize that there is a 24k fudge factor in the numbers, the real headline number is more like 63k to 87k permanent jobs added which is as good for a recovery as apparently crying is to foreplay. Below are the actual job numbers:
|Category||Change in Jobs #|
|Govt Full Time||(10,000)|
|Total Private Sector Jobs|
|Education and Healthcare||44,000|
|Leisure and Hospitaility||47,000|
|Total Private Sector||113,000|
|Temporary Private Sector Jobs||(15,900)|
|Total Permanent Jobs #||87,100|
|Birth/Death Model Plug||24,000|
|Actual Permanent Jobs #||63,100 to 87,100|
Anyway, it wasn’t all about jobs as in a speech Bernanke told the Senate Budget Committee that “We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold.” Of course what it may be taking hold of is his nutsack, but it is what it is. He also said “it could take four to five more years for the job market to normalize fully” before adding “unless we can push down this frisky labor force participation rate, you know, the “Fuck Off” strategy.”
That said, the news that sent the market down wasn’t the jobs report or Bernanke’s ramblings, it was that USB and WFC lost a fraudclosure case when the Massachusetts Supreme Court upheld a judge’s decision saying two foreclosures attempted by the banks were invalid because “If the documents were disposed, you can”t foreclose.” The fear is that this could bubble up and lead to many other foreclosures being overturned as figuring out who holds what document in the mortgage process is more complicated than Fermat’s Last Theorem (though the answer is surprisingly 42) or trying to take your ladyfriend’s bra off with one hand. Money McBags is not sure where this is going because he is 100% convinced that if someone were serious about this, the banks would be hella fucked, but the courts are about as likely to take on the banking system (and thus bite the hand that tickles them under those robes) as Willow Palin is to take on Anamika Veeramani or Amber Heard is to take on a penis, so Money McBags is 97.3% sure some BS settlement will be reached.
With all of the macro going on yesterday, Money McBags didn’t have time to get to any fundamental small cap analysis, though QCOR was surprisingly strong, STVI continues to tick up towards facebookfinity, and RICK is fighting off curveballs (while tickling investors’ balls) and getting ready to rise. Money McBags will be back next week and will get more small cap on so until then, enjoy your weekend.
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