Economic Update: Lies, Damn Lies, and The B(L)S Jobs Report
Wow. Just fucking wow. Even with stability in the Middle East more fragile than an osteoporosis sufferer’s boney coccyx as Egyptian government officials join in the protests against their own government (which is a bit like Alan Greenspan protesting against fiat currency or Camille Crimson protesting against hummers) and Jordan contemplates reforms to lessen the monarchy’s power (and newsflash King Abdullah, you might want to do some reading on Czar Alexander II because once you let Pandora out of the box, she’s not going back in, it’s called entropy (though if it were Brooklyn Decker‘s box that she were let out of, perhaps she would go back in)), with the jobs report not just relatively awful by missing guesses by a fuckton, but absolutely awful by showing fewer jobs are being created than in Whoopi Goldberg‘s pants (and Money McBags is not entirely sure what that means), and with propoganda being spread to impressionable of age females that a rise in cancers are linked to oral sex, the market still went up. Unfuckingbelievable. As the market seems to care about geopolitical unrest, a national depression, and anything tangible about as much as Mark Sanford cares about family values, all we can do is buy the fucking rip.
The big news was obviously the B(L)S jobs report which headlines lauded as a fantastic report as the unemployment rate dropped to 9.0% in a mathematical sleight of hand that would make Fibbonaci proud and Bernie Madoff’s dick hard, the private sector added 50k jobs which would have been more if not for that frisky weather (and um, the fucking depression), and the last two months of data were revised upwards by 20k each month (apparently the checks got lost in the mail).
So while analysts try to spin this number as positive (even though it was more disappointing than the book Cooking with Pooh is for coprophiliacs who order it sight unseen) as it was way below their guesses of 145k and way fucking below the whisper number of 180k (and as always, Money McBags only cares about whisper numbers if Kelly Brook is doing the whispering and the number is 69), Money McBags will break it down for you and show why it was so ugly that not even Bill Clinton would sleep with it. So below are Money McBags’ thoughts on the B(L)S employment situation report and the Street’s reaction to it:
1. Using the weather as an excuse for the ginormous miss is just fucking absurd. Honestly, the weather has now been blamed for everything from lower retail sales (except retail sales were actually decent), to the Protests in Egypt, to the Fat Boys breaking up. Analysts point out that a big reason for the miss was that construction jobs were down 38k and transportation jobs were down 32k and those two sectors are most levered to bad weather (construction is also most levered to the glut of foreclosed homes available and the crash of home prices, but that’s not important). That said even if we add back the 70k jobs that were “weather related,” the jobs report number would still be 25k below guesses. But that is not the most important point here.
The most important point is that these numbers are SEASONALLY FUCKING ADJUSTED (bolding intentional, because, yes Money McBags is yelling) which means that they should TAKE IN TO ACCOUNT THE WEATHER because, you know, THAT IS THE WHOLE FUCKING POINT OF SEASONALLY ADJUSTING SOMETHING. Now look, Money McBags is no Willard Scott (and not just because he doesn’t have a GMILF fetish), but as far as he can tell, the weather this past January wasn’t any kind of anomaly (like Carrot Top’s career), it was just kind of an average January, or at least within one standard deviation of a normal January. So given that, the seasonal adjustment should have seasonally adjusted for the fucking weather and thus this huge miss shouldn’t have been caused by a little snow.
2. The economy didn’t really add 50k jobs, it only added 36k because the government cut 14k jobs which is a trend that promises to get worse than Rick Rolling or promise rings. That said, there were 11k fewer temporary jobs which took away from the numbers, so one could say 47k permanent net jobs were added to the ponzeconomy™. Either way, you need to keep your eye on these government numbers because they are only going to get worse (more importantly though, you need to keep your eye on these numbers).
3. The 9% unemployment rate is more misleading than Citigroup’s corporate derivatives team and it only takes third grad math to figure it out. Just think about it. All else being equal, if only 36k jobs were added and ~150k people enter the workforce every month, right off the fucking bat we have ~100k more unemployed people going in to the population, and using the theory of something called Mathematics, that should cause the unemployment rate to increase, not decrease. Of course the actual calculation has more moving parts than a Rube Goldberg machine or the Octomom’s vagina, so it’s not quite that clear cut (though it should be), but the point is that just using the headline numbers and saying unemployment dropped by .4% is intellectually bankrupt.
Here is a simpler, logical way to think about it. The unemployment rate went from 9.4% to 9.0% with the addition of 36k jobs, so that would imply that for every 9k jobs added, the rate goes down by .1%, holding everything else equal (and Money McBags would like to hold these equal). So, using basic math, for a 1% drop in the unemployment rate, the ponzeconomy™ just needs to add 90k jobs and thus to get the rate down from 9%, to a cockposterous 0% full employment, never been reached before level, the ponzeconomy™ just needs to add 810k jobs. Ok, sounds simple enough, but here is the part where our minds get blown (and please let it be Alice Eve doing the blowing, and it not be our minds), according to B(L)S’ report, there are 13.9MM unemployed people, so if 810k jobs get added (and thus take unemployment to absolute zero, according to our calculations above), we’ll still have 13.1MM people unemployed. That’s right, using the B(L)S’ math, 13.1MM unemployed people equals a 0% unemployment rate which only makes sense in the land of Make Believe or Art Laffer’s head. Perhaps it’s a derivative of the Heisenberg uncertainty principle, we’ll call it the Hildasolis uncertainty principle where the more you know the unemployment rate the less you know the number of unemployed. So just step back from the numbers and think about this for a second (and then step back from that and think about this for a few hours).
Anyway, the real reason unemployment dropped by .4% was that more people simply dropped the fuck out of the workforce and thus the labor force participation fell from 64.3% to a record low 64.2%. If the labor force participation rate had stayed at 64.3%, an extra ~300k people would have been added back to the unemployed bucket and back in to the labor force, boosting the 13.9k unemployed to ~14.2k and yielding an unemployment rate ~9.3%, which is pretty much flat with last month’s number (though there is still some fudging in there that would bring the rate higher, but whatever).
In all honesty, this remains the most brilliant government strategy since giving Marilyn Monroe a key to the back door. Last month Money McBags called it the “Fuck off” strategy because simply telling the unemployed to fuck off, and thus kicking them out of the labor force, is the quickest and easiest way to get the unemployment rate down. Sure it doesn’t make the economy better, and sure it is a bit heartless, but remember, the important thing isn’t the numbers, but it is the perception of the numbers, and a 0% unemployment rate would be perceived as something as awesome as Tolstoy’s War and Peace or Malene Espensen’s tits. So if you all elect Money McBags to office in the next round of elections when he heads up the BOGUS party, he promises you in his his first afternoon of work he will cut unemployment to 0% with just the stroke of a few keys. Now that is some fucking change we can believe in (and apparently another change we can believe in is ending sentences with prepositions, as somewhere the great William Safire rolls over in his grave).
4. Just some quick stats: 6.2MM of the 13.9MM unemployed (which is 42%) are long-term unemployed, with the other 7.7MM being pre-long-term unemployed. 2.8MM were considered marginally attached to the workforce (up from 2.5MM) and they are as marginally attached to the work force as Egyptians are marginaly attached to Mubarak or Taco Bell is marginally attached to beef. Of those not counted in the labor force, 1MM of them are “discouraged”, which means the other 1.8MM are “fucking discouraged.”
5. The U6 unemployment rate was 16.1%, unless you want it seasonally adjusted (and the seasons Money McBags likes in his adjustment are cayenne pepper and stripper juice), then it was 17.3%. And since the U6 rate is a better measure of all employment because it includes the discouraged, the perplexed, and Mickey Rourke, and since it also negates the effect of the “fuck off strategy,” it is more bizarre that we don’t refer to this when talking about unemployment than it is that trying to grow meat in a lab is so fucking hard (because really, if you want to grow meat, just look at a picture of Sofia Vergara).
6. Whatever this meinmyplace thing is, it is deliciously awesome (though unclear why it takes so long to load). And yes, this has nothing to do with the jobs report, but one can only look at made up numbers for so long without a break.
7. The last 2 months were revised up by 40k lifting job creation in November to 93k from 71k and in December to 121k from 103k, while dropping the B(L)S’ credibility from none to Lindsay Lohan. And this brings us to our most important point:
8. ALL OF THESE NUMBERS ARE FULL OF SHIT ANYWAY (even moreso than Manuel Uribe‘s colonoscopy bag): The B(L)S manipulates the numbers more by using seasonal adjustments, the fictitious Birth/Death goal seek model, benchmark revisions, and telling numbers it won’t love them anymore if they don’t do what it says. It is these benchmark revisions which shoot down any credibility the No Labor Department might have had. For instance, the 2.3MM job losses from April 2009 to March 2010 were just revised up to 2.6MM. Come again? And if you are Jennifer Metcalfe, then by all means, please come again. But seriously, how the fuck can they change numbers from over a year ago? Shit, if tomorrow the NFL awarded the Arizona Cardinals the 2009 Super Bowl or the AVN awarded Kelly Madison 2010 MILF of the Year, don’t you think those fine organizations would lose credibility (even if the lovely Ms. Madison deserved it)? So why did Money McBags just waste all of his time analyzing this shit if it will just be a different number next month, next year, shit even next fucking decade?
Here is an example of how ridiculous these numbers are: The Birth/death model black box model (and as always, the only model with a bigger black box is Nyomi Banxxx) had all of its numbers from the past year changed in the benchmark revisions. No really, the numbers which were completely made up anyway, are now a different set of completely made up numbers so any analysis done with them (and Money McBags always shows the preposterousness of them) was all for fucking naught. Money McBags was so perplexed by these numbers having changed and by the birth/death model number for January coming in at an unheard of -339k (which is so far out of the norm that not it is not even within a Kim Kardashian fat tail of the mean), that he emailed some guy named Mish to see if he had any fucking clue (and Mish got all down and dirty with it so Money McBags wouldn’t have to, so enjoy, and if you need something to wake up after reading that, enjoy this). So the 36k jobs added include a non-seasonally adjusted 339k somehow mashed in there. Sounds credible to Money McBags.
9. Ok, Money Mcbags has harped on the math plenty so far, but there is one more thing he is having trouble understanding (other than people who watch American Idol and how Minnie Driver has a career), so bear with him. Last month, there were 14.485MM people unemployed, this month there were 13.9MM, for a difference of 585k. So if 36k got new jobs, and the labor force was reduced by 504k (though the people not in the labor force only went up by 319k, so um, explain that, oh right, the total population fell by 185k somehow, must have been a breakout of that terrible “rounding error” disease), where did the other 45k to 230k people go?
|Reduction in Labor Force||(504)|
|Increase in “Not in Labor Force”||(319)|
Perhaps the unaccounted for are the new “Lost Generation.”
As usual, if you care about the made up numbers that are going to change anyway, here are the details from Table B:
|January Change in Jobs #|
|Govt Full Time||(14,000)|
|Permanent Private Sector Jobs|
|Education and Healthcare||13,000|
|Leisure and Hospitaility||(3,000)|
|Total Permanent Private Sector||61,400|
|Temporary Private Sector Jobs||(11,400)|
|Total Permanent Jobs #||36,000|
|Birth/Death Model Plug||An anomalous -339,000|
|Actual Jobs #||Go Fuck Yourself|
So now that we have established that the jobs report was not just awful, but manipulatedly gibberish and likely to be changed later anyway, you should all write your news reporters/columnists/prevaricators when they hype up how great the drop in the unemployment rate was. Shit, even Bloomberg ate a dick on this one as they reported:
“The improvement underlying the drop in the unemployment rate is in sync with reports that show the economy is gathering momentum, which in turn would bolster job growth in coming months.”
Umm, Bloomberg, please read the above 2k words to see THAT THERE WAS NO FUCKING IMPROVEMENT UNDERLYING ANY JOBS REPORT (except for 36k more jobs which will do as much for fixing the economy as a kleenex will do for Barbra Streisand when she sneezes).
Anyway, Money McBags will be back on Monday with more market commentary, dick jokes, small cap analysis (DTLK, jizzzzzzzzzzzzzzzzzzzzzzzzz. Also, TSYS had a nice Q even though it is a shit company), and plenty of Marisa Miller. And if you need your Money McBags fix during the day, he is known to frequent the Twitter, the Facebook, and the Rick’s Cabaret where he is not just a shareholder (who happens to be up 13% in a month since buying back), but he’s also a client.
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