Friday, December 7, 2012

Non-Farm Payroll Report - Seriously?

73% of all jobs "created in the last 5 months are Government jobs:  LINK
These are not GDP-producing jobs, as jobs created by the Government are a result of tax revenue generated by the economy:  In fact, it can be argued that every Government job created subtracts from the wealth of this country.

The Bureau of Labor Statistics should be re-named the Bureau of Laughable Statistics.  I wasn't surprised when the headline number was reported to be an increase in jobs during November of 146,000, well in excess of the forecast increase of 80,000.  But I was shocked by the reaction to the number by the cast of clowns on CNBC, who were in total disbelief.  I was shocked because typically CNBC hypes and promotes a good number and "spins" a bad number into a good number.  To me that is emblematic of the extreme degree of implausibility with the BLS jobs report now assumed by everyone.

Of course, as usual, it doesn't take much digging below the surface to find serious holes and inconsistencies:  BLS report  Right off the top, the BLS posts a disclaimer saying that Hurricane Sandy did not affect the sampling results.  Well, if that's the case, then why bother mentioning it other than in a footnote, like everything else?  The Government has qualified every other weak economic report released since the beginning of July as being affected by the hurricane.  This one isn't? LOL

The real shocker was the downward revision to October's reported headline number.  Originally coming in at 171,000, it was revised down to 138,000.  31,000 jobs disappeared with computer keystroke at the BLS.  Recall, very few analysts were not skeptical of the 171k reported and the BLS just confirmed why.  I would suggest that we will see a massive downward revision to the number released today when December's headline is reported next month.  Please note that the revisions are not typically reported in mainstream media news reports.

But I don't have to shoot holes in this report.  The Census Bureau released a report yesterday in which it measures the unemployment rate at 8.3% vs. today's BLS' reported 7.7%.  Furthermore, Gallup's index which measures the intentions of small businesses to hire in the next 12 months plunged to -4.  The matches the all-time low for this index, which was hit previously in November 2008.  You can see the details HERE

The truth is that we'll never get the truth out of the Government.   If you delve into the depths of the BLS employment report, even their own more comprehensive measurement of the level of unemployment in this country shows 14.4% unemployment.  The way that metric is calculated more closely resembles how the unemployment was calculated 30 years, before the real statistical manipulation of economic numbers started occurring.

Just one more point about this.  It won't be too long before the number of people receiving some form of Government support payment will outnumber the number of people paying for those payments (taxpayers).  The payees will outnumber the payers.  Make no mistake about it, as tragic and catastrophic as this is for our system, it is going to get worse.  I can guarantee you that it will mean more debt accumulation, more money printing/currency devaluation and much higher prices in store for precious metals.

Have a great weekend.


  1. The IMF has just published the Eigenvector
    Centrality Systemic Risk Index. It is interesting that the major risk seems to be coming from the UK and Europe in that order.

    Barclays 0.431
    JPMorgan 0.391
    HSBC Group 0.388
    Credit Agricole 0.259
    BNP Paribas 0.255
    Bank of America 0.253
    Credit Suisse 0.244
    Deutsche Bank 0.244
    UBS 0.194
    Uni Credit 0.192
    Citibank 0.161
    Societe General 0.157
    Goldman Sachs 0.155
    Wachovia 0.133
    Lloyds 0.132
    Morgan Stanley 0.132
    Dexia 0.061
    Chartered 0.051
    RBS 0.049
    New York Mellon 0.048

  2. Burger-building robot that makes 360 burgers every hour


    A new burger-making robot that can create 360 perfect burgers every hour could threaten thousands of jobs in burger bars around the world.
    The robot - known as Burgeon - can serve up a fully-loaded mouthful every 16 seconds.
    The team behind the machine say it can do everything a burger-making human can do - only faster!
    It grinds the meat and sends it along a conveyor-belt to be grilled. It toasts the buns and sorts the salad and sauce.
    If that wasn't enough, it pops the finished burger in a bag!

  3. HFT Study Pulls Back the Veil and the Bride is Ugly

    This is a condemnation of the claim that HFT activities provide liquidity to markets and therefore benefit traditional investors who can make trades more easily. The HFT firms are taking money from the market and, on net, decreasing liquidity. This is akin to paying the local mob to protect your store while they are actually doing the shoplifting.

    The three researchers are Matthew Baron, Princeton University; Jonathan Brogaard, Foster School of Business, University of Washington; and Andrei Kirilenko, CFTC economist.

    While the study determined that HFT was profitable, it is not a wide-open field. In October a two year old HFT firm Eladian Partners shut down because of lack of business. The ever declining trading volume for U.S. stocks has apparently sufficiently reduced the number of traditional investors needed to support the skimming operations of HFT. When the flock diminishes the shearing productivity goes down and the number of shearers who can make a living is reduced. From the New York Times:

  4. The last traces of integrity are vanishing from government. They manipulated the jobs number of behalf of Obama just before the election.
    I celebrate this. I celebrate the creation of government jobs. This will bring about the economic collapse much sooner than it would otherwise occur.

    I prefer the quick death to the slow death.

  5. Another spot-on analysis, Dave. It's heartening to know that not everyone who ever worked on Wall Street is a rat. Keep 'em coming, bro, some of us out here are listening to you.

    On gold versus silver, physical I mean, do you think there's more bang for the buck loading up on silver? If gold were to double on the next leg up, and some are calling for it, do you think silver will do just as good if not better? I've got my eye on a fair amount of junk silver (pre '65 half dollars) offered by my local coin dealer and would appreciate your thoughts on the matter. Thanks in advance.

  6. Let's see them try to keep the Euro together now that Monti is resigning and Berlosconi is running again.