Posts tagged BLS
Economic Update: Jobs Report is Classic Case of Buy the Rumor, Sell the News (Unless the News Has A Hot Friend Who Likes 3-Somes)
The market bounced around a bit on Friday before closing down (something about conflict in the Middle East, spiking commodity prices, and Gabe Kaplan not showing up for the Welcome Back Kotter reunion) as investors were buying the dip, selling the rip, all while ogling the nip slip. That said, the big news of the day was the B(L)S Jobs Report which was so headliney good that after it was released dogs were seen hugging cats, Hatfields were seen dancing with McCoys, and BYU students were seen lovingly copulating in front of and with the approval of the administration. Seriously, here are actual headlines from actual reporters:
So the economy is back on track as the US added 192k jobs (until we dig in a bit) which was slightly below expectations of ~200k and well fucking below the whisper number of 250k (and as always, the only number Money McBags cares to hear whispered is 69 as long as it is coming from Danielle LLoyd), but those are just details. The other good news is that this was the fastest job growth since last spring when temporary census workers were being hired to count all of the unemployed (though not having to count themselves surely took away from some of the fun), the unemployment rate dropped to 8.9% which was the first time it was below 9% in 2 years (though with planned layoffs spiking, perhaps we shouldn’t break out the Dom just yet), and both the January and December job growth numbers were revised higher from 121k to 152k in December and from 36k to 63k in January (and we are told January’s revision was merely due to a transposition, which is much less deceiving than a tranny position).
Now look, Money McBags is happy any jobs were added to the ponzeconomy™, and while 13.7MM people are still unemployed (not counting the discouraged, the downtrodden, and Charlie Sheen who is too busy winning to give a fuck about a paycheck), it could be worse, people could be unemployed and Bree Olson’s twitter account couldn’t exist, so at least there is that. Anyway, Money McBags is here to break down the Jobs Report and look beyond the headline numbers to see what is really going on so have faith (Faith Kroll that is, and between Ms. Kroll and the melodious stylings of Chet Haze, Northwestern University is a Shannon Tweed visit away from being its own Skinemax late night movie) that we will get to the bottom of this (and if we’re lucky, we’ll also get to the bottom of this).
1. The rounding error drop in unemployment from 9.0% to 8.9% continues to be driven by clerical assumptions and semantics as the labor force participation rate remained at a 25 year low of 64.2% and the employment population ratio remained hovering around 58.4% (though to be fair, it was told Olivia Munn would be visiting 58.4%, so hover away). Had the government not employed Money McBags’ “Fuck Off” strategy by simply kicking unemployed people out of the labor force and re-labeling them as discouraged (perhaps more discouraged than Ron Paul at a congressional hearing or the English language on an episode of The Jersey Shore), the unemployment rate would have been well north of 9%.
Shit, if the labor force participation rate had just been at 64.5% like it was 3 months ago and thus 812k more people had been in the labor force, the unemployment rate would have been 9.5%. If the labor force participation rate had been at its ten year average of 66%, ~4.4MM more people would have been labeled as unemployed in the labor force and thus the unemployment rate would have been 11.8%. So see, it is all fucking semantics and as intellectually dishonest as if Joe Jackson didn’t include LaToya in the number of kids he has or if Anabel Chong included hand jobs in her record setting gang bang. If anyone in the B(L)S had a brain (well, they wouldn’t be working for the B(L)S), they would simply call the labor force participation rate 58.4% and thus unemployment would be 0% and it would be lobster tails and BJs for all. It’s just that simple.
Another way to look at it is that there are ~13.6MM people unemployed and if that is 8.9% of the labor force, that means that 153k jobs would need to be added for a .1% drop. And shit, 192k jobs were just added so shouldn’t the rate have dropped by more than .1%? Oh right, 150k assholes each month enter the labor force by graduating from college, dropping out of high school, or getting divorced from Kelsey Grammar, so for that first .1% drop, the ponzeconomy™ would have to add ~300k jobs, but perhaps we should keep this to ourselves because otherwise we may ruin a good story (like when the pages get stuck together for the conclusion of a Penthouse Forum letter).
2. The U6, which is a better measure of unemployment because it includes temporary workers and those that the labor force patricipation rate seeks to make more invisible than a Ralph Waldo Emerson protagonist, was 15.9% and that is about as healthy for the economy as just holding it in was for Tycho Brahe. Sure the rate was manipulatedly down from 16.1%, and down is good (especially if Faye Reagan is the one going down), but 15.9% of people not being able to earn a living and thus needing food stamps, charity, hand outs, or to eat away at their savings (and yes that is funny because no one has savings) to survive is about as viable of a long-term option as being the spokesperson for the Heartattack Grill.
The point is, a lot of people are still fucking unemployed no matter what number the B(L)S wants to pull out of Department of Labor Secretary Hilda Solis‘ ass (and as an aside Money McBags thought “Secretary” was no longer politically correct, so shouldn’t she be the Department of Labor “Administrative Assistant?”). 8.7MM jobs were lost during the economic downturn and at this rate, we will be back to a fictitious 5% long-term unemployment target in only 150 short months which means we truly have created a new “Lost Generation.”
3. Wage growth sucks dick, and not any dick, but Rock Hudson’s AIDS ridden dick. The average hourly earnings were unchanged at $19.33 (or better known as $.67 short of a fucking lap dance) and with inflation coming (and not just because it is sharing a dressing room with Sofia Vergara) as both commodities spike faster than Timothy Geithner’s popularity at a Kappa Beta Phi wine and cheese party and uprisings in the Middle East cause gas to rise to $4 a gallon, stagnant wage growth is not good. And this is really an important point because whether or not people are employed is irrelevant if their dollars become worth less than an Abacus CDO, and if/when that happens, the whole system will teeter as the middle class on down will be forced to survive on cock soup (and not even Jamaican cock soup) and as we know, man was not made to live off of cock soup alone (except for maybe Andy Dick, not that there is anything wrong with that).
4. The report showed 43.9% of the unemployed (better known as 6MM, or completely fucked), were out of work for more than six months and the longer someone is without a job, the harder it is to find work. Look, Money McBags doesn’t often pull back the curtain, lift the kimono, undo the gaff (choose your own metaphor) here on the award winning When Genius Prevailed but loyal readers know that even though he is one of the top four small cap analysts alive, Money McBags has been out of a job for a fucking year through no fault of his own and now he is like a fucking leper to funds out there. Seriously, being unemployed this long has made him more tainted than Sarah Palin‘s chin after hosting a teabag party.
Here is an example. As you are all aware, Money McBags has taken a few days off this week from macro updates (though he still did hit you with an interview with CRUS’ CEO and some solid small cap analysis) and that is because he had a third round interview with one of the best funds on the Street, seriously, Money McBags would chop his left nut off to work for them (and you’d all be surprised how well Money McBags’ cleans up). Anyway, the last guy he talked with there towards the end of the interview said “I don’t know how to say this nicely, but why have you been out of work for so long?“ And see, right there is the fucking problem and there is nothing Money McBags can do about it.
Money McBags keeps getting to final round interviews and then gets beat out by the employed guy coming from the bigger fund, no fucking joke. These assholes get 300+ resumes for each opening and since it is a buyer’s fucking market, it’s just easier/safer to hire the guy who is currently employed rather than give the unemployed guy a chance which is fucking insulting and more moronic than naked sledding or that Twilight book series. It’s the employment Catch-22. Money McBags can’t get a job because he doesn’t have a job, even though his work demolishes any analyst on the Street (and he has a whole year of content available to the public to prove that, including CEO interviews and a shitton of money making picks). So fuck Money McBags, really.
The good news for all of you is that it looks like he will be able to keep writing these dick jokes in perpetuity, the bad news is perpetuity might not be that long if can’t start making some money, so to the fucking pain (though if just 1/3 of everyone who reads this were to send Money McBags $10, that would be a decent start. If 1/3 of everyone who reads this were to send him $10 and Alice Eve‘s phone number, that would be a better start). And if any of you are looking to hire, Money McBags is willing to play Bar Mitzvahs and Anniversary parties.
6. 2.7MM people were marginally attached to the labor force in the same way that Mos Def is marginally attached to the Justin Beiber fan club. 1MM of the marginally attached were labeled as discouraged workers (which means they are not looking for work because they think there is no work out there, not because their wages are remaining flat while prices rise) and the other 1.7MM hadn’t looked for work in 4 weeks because of either school, family responsibilities, or there not being any fucking jobs.
7. With March Madness beginning, Money McBags is starting his research for the most important college tournament of the year where Ashley was upset at the buzzer last year. This has nothing to do with the jobs report, but it is crucial that you are all aware of it.
8. The government shed 30k jobs in what is becoming a worse trend than the Fed keeping rates low for a an extended period (the menorrhagia strategy) or that pokemon shit. And it is only going to get worse as the Federal government looks to slash the budget, states like Wisconsin and New Jersey are paring workers like they were ingrown asshairs, and perhaps the lovely Meredith Whitney’s municipal bond default call will rear its ugly head. But here is the thing about which you all need to think. And when you’re done thinking about that, you also need to think about the implications of government workers losing their jobs since they are likely less well trained than Najeh Davneport. No really, if unemployed people from the private workforce are having trouble finding jobs, what the fuck do you think is going to happen when former public sector workers try to get in to the private sector where 6 hours days and 3 hour lunch breaks happen only every other day? Shit is going to get ugly.
9. As always, the headline numbers don’t tie, so fuck Money McBags for trying to make sense of this. There were 13.9MM unemployed people in January, in February there were 13.673MM, so a difference of 227k. According to the B(L)S, 192k jobs were added and due to population growth and a flat labor force participation rate, 60k more people entered the work force. So in theory, 95k more people should have been unemployed but instead they just disappeared in a poof. But hey, what is 95k people among friends?
|Increase in Labor Force||60|
10. The headline number from the B(L)S was more misleading than this headline. The economy didn’t really gain 192k permanent jobs, shit, 15.5k were temporary and 112k were the result of the always confusing and completely unexplainable birth-death model which comes from a bigger black box than Aretha Franklin’s kids. So in reality, only 64.5k to 176.5k permanent jobs were created depending on WTF you want to do with the birth-death model, so um, yeah.
Below Money McBags breaks out Table B so you can all enjoy the art of the B(L)S.
|February Change in Jobs #|
|Govt Full Time||(30,000)|
|Private Sector Jobs|
|Education and Healthcare||40,000|
|Leisure and Hospitaility||21,000|
|Total Private Sector||222,000|
|Temporary Private Sector Jobs||15,500|
|Total Permanent Jobs #||176,500|
|Birth/Death Model Plug||112,000|
|Actual Jobs #||64,500 to 176,500|
Money McBags is glad to see jobs were added according to the B(L)S’ goal seek model, really, that is super duper titriffic, but lets not kid ourselves here about what the fuck is happening. Job growth is still slower than a conversation between Kirk Douglas and Dick Clark and more government layoffs could derail any improvements. So while Money McBags knows neither Rome, nor Pam Anderson, were built in a day, at this pace the recovery will be over sometime in the year 2025 just when the robots are starting to take over, so plan accordingly.
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.
6/4/10 Midafternoon Report: Jobs report challenges Marmaduke movie for biggest bomb released on Friday
The (No) Labor Department’s jobs report came out today and was well below analyst guesses which sent the market tumbling like Tony Hayward’s Q score at a Greenpeace convention. The US added 431k jobs in May which was the biggest increase in a single month in over a decade since the internet was founded and needed people to set up all of the tubes. While on the surface that number seems spanktastic (though not nearly as spanktastic as Rosie Huntington-Whiteley who Money McBags would let hunt his whitey anytime), the market was surprisingly not fooled by it. First of all, analysts had guessed 500k jobs would be created so the actual number came up shorter than a Kristen Bell skirt or Bernie Madoff’s alibi. But what makes matter worse is if one digs in to the numbers it is doubtful any real jobs were created despite the government claiming that a whopping 41k private sector jobs were created, and honestly, bragging about 41k private sector jobs being created is like bragging that you won the spelling bee on the short bus. But let’s look at the numbers more closely.
Of the 431k jobs created, 411k were temporary census workers and 31k were temporary service workers. So already were at a net -11k permanent job creation number unless the government decides to turn the US into Oceania and thus take a new census every month thereby making those temporary jobs permanent. Now the Labor Department said the government cut 20k permanent jobs so the 411k census jobs added led to a net 391k new government jobs. So since the top line number was 431K, they solve for x in 431k – x = 391k and get “you’re fucked,” I mean ~40k for private sector job growth. But here’s the thing, as we said above, 31k of those ~40k were temporary fucking jobs so even using the government’s hunky dory jobs created numbers, there were only ~10k PERMANENT private jobs added to the economy or 10k total permanent jobs lost including the government figures. That number is more piss awful than having to listen to Lynyrd Skynyrd put to music any of George Will’s essays about baseball. But wait, it gets even fucking worse, like being married for 21 years, or being for 21 years and then finding out your spouse was gay the whole time, and yes I mean you Fran Drescher (though to be fair, having to hear Fran Drescher every morning might turn Money McBags gay as well). You see the BLS uses something they call a birth death-model to estimate the lag between the creation of new businesses and the close of businesses that their survey misses in the short term. They don’t release the methodology so it is the biggest black box Money McBags has seen since Vanessa Del Rio graced the screen in the 1980s. For May, the BLS’ birth death model showed an increase of 215k jobs, which again is an estimate likely based on population levels, claims for unemployment, and shoving one’s thumb far up one’s own ass. So based on our previous numbers where we showed 10k permanent private sector jobs were created and 10k overall permanent jobs were lost, we can now deduct a number somewhere between 0 and 215k from that (and Money McBags believes the number is closer to 215k since the birth-death model is likely more fictitious than strippers who dance just to put themselves through college) to get the real job DESTRUCTION number which was likely more negative than a disgruntled anion. So we’ve got that going for us.
Other tidbits from the jobs report show that 6.8MM people have been out of work for more than 6 months, the average length of unemployment is now 34 weeks which is the longest period since the government started keeping track in 1948, and Chewbacca was a wookie. Some may spin the drop in the unemployment rate from 9.9% to 9.7% as positive but that was more likely caused by people leaving the workforce as the Labor Force Participation Rate, which oddly enough measures the labor force participation of working age adults, decreased to 65.0% from 65.2%. So no matter how the government spins the jobs number, it sucked harder than a young lady trying to fellate Whitezilla all by herself.
In international news, everything was down as the Euro broke through the critical $1.20 mark on its way to extinction. Traders now see $1.18 as the next short term technical downside target for the Euro until it falls below that. The latest fears coming out of Europe revolve around Hungary which is apparently starving for funding. The newly elected vice president of Hungary, Lajos Kosa, channeled his inner Joe Biden late yesterday by saying that Hungary is in a Greece-like sovereign credit crisis. In response Prime Minister Viktor Orban didn’t deny the issues but did call Kosa a dicknut for speaking out of turn and promised to punish him by uninviting him to the new administration’s meet and greet with Zita Gorog. The new government is now in the process of determining the real state of the budget, and will report this weekend on whether they are fucked or just lovingly violated. The fear of Hungary defaulting is causing a spike in european CDS and has caused the price of European default insurance to rise to it’s highest price since Jean-Paul Marat forgot to lock his bathroom door.
In stock news, everything is down as the government can’t even properly manipulate the economy anymore. MCD is showing weakness because they annonced they will have to recall 12MM Shrek drinking glasses that contain the toxic metal cadmium. The irony in this is that the cadmium glasses are still less toxic and better for you than the nine piece Chicken McNuggets. And WMT had their annual shareholders meeting today where they announced a five year plan to add 500k jobs, insitute a $15B stock buyback plan, and continue to make the world a worse place.
In small cap news, WGO took it in the winnebago again today since the stock remains more overvalued than multi-family dwellings in Detroit before the subprime crash. Money McBags has been through this before but the company is not going to make money this year and is trading at a valuation that makes less sense than the rules of cricket. This is a best a $7.50 stock and on high volatility days it will get pitched around like the SS Minnow because valuation is based solely on hope and hope doesn’t put food on the table (though Hope Dworaczyk could put her melons on Money McBags’ table any day). The fact is, every small cap closed down except for somehow CTGX, JOEZ, TZA, and TWM (and that last two are funny because they are leveraged small cap short ETFs) because no one wants to hold illiquid little shit when the economy is still struggling, Europe is going to 0, and we now have to give a fuck about some do-shit country called Hungary who dropped a steaming pile of ghoulash on the markets today.
Oh well, at least try to have a good weekend.