Stock Market Celebrates the dollar taken behind the woodshed

The U.S. stock market celebrated the better than expected U.S. economic data and Japan cutting rates by launching the S and P 500 23.72 points (2.1%) in a mere 6.5 hours of trading. Let's not forget the fact that the U.S. Dollar was hammered again and Wall Street is giddy as the dollar is escorted behind the barn for a thrashing. (

CNBC reached peak giddiness during the trading day and the boys and girls on Fast Money can't wait to finish spewing their celebrity status picks and treat the spouse to a well deserved Manhattan dinner as a result of "nailing the shorts to the wall rally." Spouses will be drinking 10 1/2 oz bottles of beer given the dollar haircut. In addition, the chef will have sliced off 3 ounces on the 24 ounce Porterhouse, but hey the market was green and we are really smart!

Funny thing about the great financial minds on Wall Street and those paraded around CNBC...they fail to comprehend they have still lost money during the past 3 months. The U.S. dollar index is down 12.1% since June 7, 2010 while the S and P 500 has advanced 10.5%. Are they really smarter than a 5th grader? Correct answer is NO!

Durable Orders TANK....Welcome to the "Recovery Summer"

White House Press Release

"Recovery Summer"

June 17, 2010

WASHINGTON, DC – The Administration today kicks off “Recovery Summer,” a six-week-long focus on the surge in Recovery Act infrastructure projects that will be underway across the country in the coming months – and the jobs they’ll create well into the fall and through the end of the year. The Recovery Act has already funded tens of thousands of projects and put about 2.5 million Americans to work, but summer 2010 is actually poised to be the most active Recovery Act season yet, with tens of thousands of projects underway across the country that will help to create jobs for American workers and economic growth for businesses, large and small.

Census Bureau Press Release

"Reality Summer"

August 25, 2010

July durable goods orders came in at 0.3%, significantly below the 3.0% that analysts were expecting.

Excluding autos, durable goods orders actually TANKED 3.8%, while analysts were looking for small growth.

New orders for manufactured durable goods in July increased $0.6 billion or 0.3 percent to $193.0 billion, the U.S. Census Bureau announced today. This increase followed two consecutive monthly decreases including a 0.1 percent June decrease. Excluding transportation, new orders decreased 3.8 percent. Excluding defense, new orders increased 0.3 percent.

Transportation equipment, also up following two consecutive monthly decreases, had the largest increase, $6.1 billion or 13.1 percent to $52.6 billion. This was due to nondefense aircraft and parts, which increased $4.0 billion.

July versus June Change
-15.0% Machinery-New Orders
-12.7% Computers and Related Products-New Orders

Link to complete Census Bureau Report

Report summary

Welcome to the Recovery...a collection of Timmy Geithner's favorite Folktales

After consuming mass quantities of Timmy's home brewed Kool-aid, he penned an op-ed  folktale piece in the New York Times. Yes, Timmy lives in his own special world talking to his imaginary friends while perusing his imaginary economic reports.

Welcome to the Recovery

A collection of folktales

The devastation wrought by the great recession is still all too real for millions of Americans who lost their jobs, businesses and homes. The scars of the crisis are fresh, and every new economic report brings another wave of anxiety. That uncertainty is understandable, but a review of recent data on the American economy shows that we are on a path back to growth.

The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall, preventing an even deeper collapse and putting the economy on the road to recovery.

From the start, President Obama made clear that recovery from a crisis of this magnitude would not come quickly and that the recovery would not follow a straight line. We saw that this past spring, when the European fiscal crisis posed a serious challenge to the markets and to business confidence, dampening investment and the rate of growth here.

While the economy has a long way to go before reaching its full potential, last week’s data on economic growth show that large parts of the private sector continue to strengthen. Business investment and consumption — the two keys to private demand — are getting stronger, better than last year and better than last quarter. Uncertainty is still inhibiting investment, but business capital spending increased at a solid annual rate of about 17 percent.

Together, private consumption and fixed investment contributed about 3.25 percent to growth. Even the surge in imports, which lowered the rate of increase of G.D.P., actually reflects healthy and growing American demand.

The economic rescue package that President Obama put in place was essential to turning the economy around. The combined effect of government actions taken over the past two years — the stimulus package, the stress tests and recapitalization of the banks, the restructuring of the American car industry and the many steps taken by the Federal Reserve — were extremely effective in stopping the freefall and restarting the economy.

We suffered a terrible blow, but we are coming back. Link to Geithner's Folk Tales

Updated Economic Data reported post Folk Tales Publication

Pending Home Sales June 2010 (National Association of Realtors)

The Pending Home Sales Index,* a forward-looking indicator, declined 2.6 percent to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6 percent below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Factory Orders (June 2010)

Factory orders for the month of June were DOWN 1.2% versus a consensus estimate of down 0.5%. May was revised (of course) to DOWN 1.8% from the initial government guesstimate of DOWN 1.4%. April was also revised (government required 3 months to check their math) to UP 1.0% versus the initial report of UP 1.2%.

Sampling of Other Popular Geithner Folktales and Fables

Construction spending beats estimates...just don't look at year over year figures

Another economic report data beats the consensus estimates. Construction spending was up 0.1% for June versus the consensus estimate of down 0.8%. May was revised down to -1.00% from the initial report of -0.2%. The equity market does not care about yet another downward prior month revision as that is old data.

Mr. Market has an unbelievable short term memory. When Construction Spending for the month of May was initially released, the -0.2% was well received as it was WAY BETTER than the consensus estimate of -0.9%. One month later, the revision comes in worse than the initial consensus estimate. The revisions to June will be out September 1st. The economic pundits have forecasted a significant recovery for almost two years. Initially, it was a 2nd half 2009 story and when that did not pan out, it became a 1st half 2010 story. Well, that too has been revised to a 2nd half 2010 recovery forecast.

Judge for yourself how far we have recovered when comparing June 2010 to June 2009: Link to complete report: Construction Spending

-7.9% Total Construction
-4.1% Public Construction
         +31.4% Residential
          -5.0% Non-residential
          -21.9% Educational
         +20.1% Transportation
-10.0% Private Construction
          -15.2% Non-residential
          -57.7% Lodging
          -30.5% Office
         +13.0% Transportation
         +1.7% Highway and street
          -32.9% Manufacturing

ISM Index beats estimates, market launches and celebrates an ISM level lowest of 2010 and below December 2009 level

The July ISM Index beats consensus estimate of 54.2 as it clocked in at 55.5. The equity market launches as it celebrates the fact that the ISM Index was lower than June and is the lowest reading of 2010. The S and P 500 rockets up 20+ points while the DOW living up to "no stock left behind" launches up 177+ points. The ISM Index is now officially below the reading for October 2009! Yes America a weakening economy is reason to celebrate.

ISM Index Recap
55.5 July 2010
56.2 June 2010
59.7 May 2010
60.4 April 2010
59.6 March 2010
56.5 February 2010
58.4 January 2010
55.9 December 2009
53.6 November 2009
55.7 October 2009

Yes, there is a disconnect...

Recap of July 2010 Economic Data...The Folly Continues

Yes America, the folly within the U.S. Equity Market continues. The NASDAQ, S and P 500 and of course the all important 30 Dow Jones Industrial Average inflicted tremendous pain on anyone shorting the market based on fundamental economic data. The bullish algorithmic gamers took the month from the bears (you know, the one's that don't rely on CNBC or comic books for their analysis) and launched the S and P 500 6.88%. Naturally, the trading volume was anemic however the movement afforded another month of paid advertising and busload of Mensa-like portfolio managers on CNBC.

When the CNBC pundits emphatically urge the retail investor to "get in the game" (sounds like Cramer screaming in the background). Research the data released during the month yourself and decide if you want the children's college fund placed in Mr. Market. Hey, what does grandpa know, many "experts" on CNBC deem this to be a generational buying opportunity...you know, if your time horizon is long term (a.k.a. 20+ years). Grandpa wishes you the very best in whatever you decide. The following are "just the facts" reported during the month.

July Economic Data

• Weekly initial jobless claims averaged 457,000 for the month 
• May Pending Home Sales DOWN 30% month over month and down 15.9% year over year
• Domestic vehicle sales for June: 8.4 million annualized units verus consensus of 8.9 million annualized units (May reported at 8.9 million annualized units)
• Construction spending for May -0.2% versus consensus estimates of -0.9% (April revised to +2.3% from +2.7%)
•  Non-farm payrolls for June DOWN 125,000 on a consensus estimate of down 100,000
• Unemployment rate dropped to 9.5% from 9.7% (grandpa opts not to comment...)
•  Factory Orders for May DOWN 1.4% versus consensus estimate of down 0.6% (April month revised to +1.0% from +1.2%)
•  ISM Services for June 53.8 versus consensus of 55 (May was 55.4)
• Consumer credit for May -$9.1 billion versus consensus estimate of -$3.0 billion (April revised to -$14.9 billion versus +$1.0 billion....clearly the Federal Reserve has an issue)
• Trade Balance for May -$42.3 billion versus consensus estimate of -$39.4 billion (April -$40.3 billion)
• Retail Sales June -0.5% versus consensus estimate of -0.2% (May revised to -1.1% versus -1.2%
• NY Fed Empire Manufacturing July 5.08 versus consensus estimate of 18.0 (June 19.57)
• Philadelphia Fed Survey July 5.1 versus consensus estimate of 10.1 (June 8.0)
• National Assoc. of Home Builders July 14..lowest since April 2009 (June revised to 16 from 17)
• Housing Starts June 549,000 versus consensus estimate of 575,000 (May revised down to 578,000 from 593,000)
• Existing Home Sales May 5.37 million versus consensus estimate of 5.09 million (April was 5.66 million)
•  New Home Sales June 330,000 versus consensus estimate of 310,000 (May revised to 267,000 from 300,000....267,000 lowest level on record)
• Consumer Confidence July 50.4 versus consensus estimate of 51 (June  raised to 54.3 from 52.9)
• Durable Orders June -1.0% versus consensus estimate of +1.0% (May reduced to 1.2% from 1.6%)
• Fed's Beige Book...not viewed as encouraging, reflective of Bernanke's earlier reference to the economy being "unusually uncertain"
• Q2 GDP 2.4% versus consensus estimate of 2.5%. Q1 revised to 3.7% from 2.7% while the government revised down GDP figures for 2007, 2008 and 2009
• Chicago PMI  July 62.3 versus consensus estimate of 56.3 (June 59.1)
• University of MI Sentiment final for July 67.8 versus consensus estimate of 67.5 (June final was 76)

Grandpa has set the timer for 2013 given the GDP revisions as will likely be 3 years before the "shrooms" wear off given the 37% increase to Q1 GDP on Friday. It took the government until 2010 to revise down 2007, 2008 and 2009 GDP.

Wall Street robots create best performing month in a year even as billions of dollars left the equity market, no trading volume and poor fundamental economic data

The exploits of Wall Street's mathematician robots churn out a positive month. July yielded the best performing month in a year as the S and P 500 gained 6.88% while the Dow gained 7.1%. These "annual-like" gains occurred even as:

• billions of dollars were withdrawn from the U.S. equity market
• trading volume was anemic
• fundamental economic data shows clear signs of a slowdown

Significant Dollars Removed from the U.S. Equity Market

Investment Company Institute (ICI) reports $8.797 billion was withdrawn from domestic equity funds through 7/21/10. This represents an average of $2.932 billion per week with yet another week to be reported. For the entire month of June, ICI reported $8.076 billion withdrawn from domestic equity funds and their first report of June included the final 5 days of May.

From the week ending May 5, 2010 through the week ending 7/21/10, $40.515 Billion has been withdrawn from the U.S. equity funds.

Anemic Trading Volume

The S and P 500 clocked in a 70.89 point (6.88%) gain for the month of July on an average daily trading volume of 4.513 billion shares. During the month of June, the S and P 500 was down 58.70 points (5.39%) on average daily trading volume of 5.005 billion shares. The S and P 500 launches 6.88% while month over month average daily trading volume falls 9.8%.

Grandpa's interest piqued while dissecting the curious 6 consecutive up days in the S and P 500. From July 6th through July 13th, the S and P 500 gained 72.76 points (7.1%). This gargantuan move occurred on a paltry 4.290 billion average daily trading volume (223 million fewer shares per day than the July monthly average).

More evidence of manipulative trickery is evident after comparing the two biggest July up days to the two biggest down days in June. The two biggest down days in June (4th and 29th) collectively produced a loss of 71.28 points on average trading volume of 6.159 billion shares per day. The two biggest up days in July were contrived on 1.280 billion less shares per day.

Grandpa's "granddaddy" validation of manipulative and deceptive components became even more evident when May was included in the analysis. The down and dirty:

S and P 500 Monthly Recap

• July 2010 UP 70.89 points (6.88%) on daily average daily trading volume of 4.513 billion shares
• June 2010 DOWN 56.70 points (5.39%) on average daily trading volume of 5.005 billion shares
• May 2010 DOWN 92.28 points (8.2%) on average daily trading volume of 6.383 billion shares

July's 6.88% gain occurred on average daily trading volume of 492 million fewer shares than July and 1.87 billion fewer shares than May.

Ben Bernanke's "Unusually Uncertain" Economic Data

• Weekly initial jobless claims averaged 457,000 for the month
• Pending Home Sales DOWN 30% month over month
• Non-farm payrolls for June DOWN 125,000 on a consensus estimate of down 100,000
• Factory Orders DOWN 1.4% versus consensus estimate of down 0.6%
• ISM Services 53.8 versus consensus of 55 (prior was 55.4)
• Trade Deficit -42.3 billion versus consensus estimate of -39.4 billion (prior -40.3 billion)
• Retail Sales -0.5% versus consensus estimate of -0.2%
• Existing Home Sales 5.37 million versus consensus estimate of 5.09 million (prior 5.66 million)
•  New Home Sales 330,000 versus consensus estimate of 310,000 (prior revised to 267,000 from 300,000....267,000 lowest level on record)
• Consumer Confidence 50.4 versus consensus estimate of 51 (prior raised to 54.3 from 52.9)
• Durable Orders -1.0% versus consensus estimate of +1.0% (prior reduced to 1.2% from 1.6%)
• Q2 GDP 2.4% versus consensus estimate of 2.5%. Q1 revised to 3.7% from 2.7% while the government revised down GDP figures for 2007, 2008 and 2009

Once Wall Street repositions the roulette table magnets, the casino will open for business as usual Monday at 9:30 am EDT. The High Frequency Traders have replenished their pantry with Cheetos and Red Bull and will surely commence with yet another upward romp in the market. After all, they (i.e. robotic computer gamers) are the only one's trading the market.

Another "annual-like" return is assured for the month of August predicated upon economic data continuing to reflect a downward slope, another $10 billion is withdrawn from the U.S. equity funds and volume drops another 10%.

Mr. and Ms. Market are waiting patiently for the average retail investor to come off the sideline and provide the catalyst for another 5 to 10% upward move. When they sense they have sucked in the final flock of lambs, you can be assured the market will sell, once again proving to the retail investor who controls the market.

U.S. Stock Market Likely to launch again given today's stinky economic data

As noted in prior posts, the U.S. stock market consists of a small group of algorithmic gamers who deem funadamental economic data irrelevant to market manipulation. CNBC will continue to parade around guests that signed a "bullish at all costs" agreement contract however for those making decisions with their money versus other peoples' money, today's economic data STUNK.

The Empire Manufacturing Index plunged to 5.08 on consensus expectations of the "experts" of 18 (prior level was 19.57). This startling drop was driven by a contraction in virtually all  categories:
New Orders (10.13 from 17.53)
Shipments (6.31 from 19.67)
Unfilled Orders (-15.87 from -1.23)
Prices Received (-1.59 from 4.94)
Average Employee Workweek (-9.52 from 8.64)

Initial Jobless Claims came in at 429,000 from 458,000 the week before. Department of Labor had to throw many darts in order to figure out the seasonal adjustment factor due to various auto companies stating they would continue summer production versus the normal summer plant shutdown.

NOTE: the Non Seasonally Adjusted number for the week surged from 468,492 to 513,347. The Department of Labor simply waved their magic wand and seasonally adjusted out 84,347 individuals filing initial claims.

Continuing claims were reported at 4.68 million versus the pundits expectation of 4.4 million and the 4.68 million figure is  +247,000 from prior week.

Let the robot trading games begin!

Dylan Ratigan addresses the "Real Cause" of the "Flash Crash"

While Dylan was still with CNBC and the host of Fast Money, grandpa’s very dear friend coined him as “Hollywood” and this was not intended to be complimentary.

Grandpa and his dear friend are now most complimentary of Dylan as he has clearly found his niche and a venue that allows him to “call it like it is”. Dylan leaving the CNBC puppet show is great for all parents and especially grandchildren as they now have a voice!

Dylan addresses the real causes of the “Flash Crash” this past Thursday May 6, 2010. This is not a market as it is built on accounting fraud and money printing and no matter where you look, there are sightings of Larry Sumers and Robert Rubin.

NOTE TO CNBC and CONGRESS: there was no “fat finger trader”.

Visit msnbc.com for breaking news, world news, and news about the economy

March 2010 Construction Spending Better than Expected…Really???

The media is euphoric as evidenced by their headlines:
March construction surges…
U.S. construction spending rises in March…
U.S. construction defies expectations…
U.S. construction spending exceeds expectations…
U.S. construction spending rises into positive territory…
It is time to get ready for the construction recovery…

Given the headlines, one would surmise there is not a hammer left on the shelf and traffic delays abound as all previously laid off construction workers are heading back to the jobsites. Quick, you need transfer from the university to trade school. Well, not exactly…

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2010 was estimated at a seasonally adjusted annual rate of $847.3 billion, 0.2 percent above the revised February estimate of $845.5 billion. The originally reported figure for February 2010 was $846.2 billion annual rate. Had the government not revised the figure lower, the March figure would be a whopping 1/$846.2 increase. Don’t leave the campus yet, grandpa is not done.

The March figure is 12.3 percent below the March 2009 estimate of $966.7 billion. During the first 3 months of this year, construction spending amounted to $179.9 billion, 14.0 percent below the $209.2 billion for the same period in 2009.

How can that be, the equity market is up 160 points of light?

The original January 2010 figure was $884.1 billion. Yes, the government also revised a 3 month old figure to $863.5 billion. The March 2010 figure is $16.2 billion less than the January 2010. Surely the equity market knows that the revisions are absolute and we are good to go! Well, not exactly…

U.S. Department of Commerce note in this month’s report:
In the May 2010 press release, revisions to unadjusted and seasonally adjusted data will revise back to January 2004 to incorporate and benchmark to the 2008 detailed structures data from the U.S. Census Bureau’s Annual Capital Expenditures Survey.

Back to January 2004! That is almost 6 ½ years! Apparently the equity market in its infinite wisdom and manipulative ways already priced in over ½ a decade worth of revisions.

Oh grandpa, you are sounding a bit cynical; share some specifics from the report and compare it to a year ago especially given the BILLIONS of debt the government has shoveled on to our grandchildren. CNBC, Jim Cramer, Tim Geithner, Larry Summers and Christina Romer continue to express their bullishness about the recover and President Obama just stated; “nation’s economic heartbeat is strong”!

Surely lodging has improved given the monumental job creation which yields vacations and business travel. Likewise, office construction must be off the charts as the mass number of new employees need a place to sit. Finally, check out manufacturing as surely products are flying off the shelves given recent manufacturing survey results.
March 2010 versus March 2009 Value of Construction Put In Place
-59.7% Lodging
-34.1% Office
-28.3% Manufacturing
 
Sorry grandkids, grandpa is trying his best to remove some of the burden off your shoulders however not only does our government continue to spend, it is become impossible to identify a positive return on the BILLIONS. Grandpa will not quit the quest.

Friday Funnies...the week in review

Bureau of Economic Analysis Manual

for computing GDP

Obama's response to the Creative

GDP Computation

GDP shows the economy is on the right track

Nation is moving in the right direction

Nation's Economic Heartbeat is Strong

Hey Man, bad turn, sign says Yuma. Oh man we're in AZ

Hey man, TELL THEM we have papers...

First 4 Goldman Sachs boys waiting to testify

before the Permanent Subcommittee on Investigations

Past week's initial jobless claims surprised economists...oh come on!

The data “surprised economists” is laughable given the fact that their data is solely a myopic perspective from Wall Street. They are removed from the “real world” and deem Wall Street the center of the economic universe. Why anyone deems an economist’s opinion as credible is beyond me especially given our top economist’s (a.k.a. Helicopter Ben Bernanke’s) complete miss on the impact of subprime mortgage.

Economist’s dribble combined with utterly polluted government reports courtesy of seasonal adjustments and a manipulated birth/death rate model collectively yield the same level of clarity as Hermann Rorschach’s art collection.

While financial cheerleader networks such as CNBC incessantly spew a “glass half full” scenario, the reality of unemployment is sobering. The most recent DOL data reports emergency unemployment claims were up 261,817 to 5,855,301. This figure roughly represents the entire population of Maryland or the collective populations of Nebraska, New Hampshire and Utah.

Don’t be concerned, this is a “jobless recovery”.

Weekly Jobless Claims Jump 24,000 to 484,000

U.S. Department of Labor reports that weekly Jobless Claims Jump 24,000 to 484,000 for the week ending April 10th. This is the highest level since February 20, 2010.

The economic experts consensus estimate was 440,000 so they were only off bullseye by 10%.

Continuing claims cranked up to 4.639 million versus the consensus estimate of 4.580 million. The continuing claims figure is an increase of 73,000 people from the prior reported period.

Emergency unemployment claims were up 261,817 to 5,855,301 which are roughly the entire population of Maryland or the collective populations of Nebraska, New Hampshire and Utah. No big deal as CNBC will give us the green shoots perspective.

CNBC has already put their cheerleading positive spin on the claims number as the Empire Manufacturing Index came in above expectations and Joe Kernan stated to Santelli that maybe the market will focus more on this than the initial claims.

Joe would have you believe that a survey of 175 manufacturing executives trumps 484,000 filing initial unemployment claims and of course a survey of 175 is way more telling than 4.6 million still collecting unemployment benefits. You are pathetic!

Foreclosure Rates At Record High

LPS’ Mortgage Monitor Report Shows Total Delinquent Loans 21.3 Percent Higher Than Last Year; Foreclosure Rates At Record High

Report Includes Data as of February 2010 Month-End

JACKSONVILLE, Fla. – April 12, 2010 – The latest Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS), a leading provider of mortgage performance data and analytics, shows that the total number of delinquent loans was 21.3 percent higher than the same period last year. Although the data showed a small 1.45 percent seasonal decline in delinquencies from January 2010 to February 2010 month-end, the national delinquency rate still stood at 10.2 percent. The report is based on data as of February 2010 month-end.

The nation’s foreclosure inventories reached record highs. February’s foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.

As a result of the federal government’s Home Affordable Modification Program (HAMP), delinquent loans that were modified and that remained current through HAMP’s three-month trial period – called “cures-to-current” – have increased. Advanced delinquency rolls, however, remain elevated from a historical perspective.

Other key results from LPS’ latest Mortgage Monitor report include:
Total U.S. loan delinquency rate: 10.2 percent
Total U.S. foreclosure inventory rate: 3.3 percent
Total U.S. non-current* loan rate: 13.5 percent
States with most non-current* loans: Florida, Nevada, Arizona, Mississippi, California, New Jersey, Georgia, Illinois, Ohio and Indiana

States with fewest non-current* loans: North Dakota, South Dakota, Alaska, Wyoming, Nebraska, Montana, Vermont, Colorado, Washington and Minnesota

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.

Note: Totals based on LPS Applied Analytics’ loan-level database of mortgage assets.


Link to Complete Report and Presentation

 

Retail Sales CNBC Cheerleader Style....and along comes along Jane Wells with a bucket of cold water

Oh it has been a great day for the CNBC financial news network cheerleader competition. The competition for top cheerleader honors was fierce all day. It appears the euphoria peaked during Power Lunch and Julia Boorstin was clearly in the gold medal round; that is until Jane Wells threw the cold bucket of water on Julia and Steve Liesman (Steve had a lock on the silver medal).

Time to go back in the box Julia

Weekly jobless claims rise 18,000: Easter Bunny and Civil Rights Activist are to blame

Initial claims for state unemployment benefits rose 18,000 to a seasonally adjusted 460,000 (week ending 4/3/2010), the Labor Department said. The prior week was adjusted to reflect 442,000 initial claims versus the previously reported 439,000.

A Labor Department official attributed the rise in claims to seasonal volatility, mainly from the Easter holiday (a.k.a Easter Bunny), and noted there were shutdowns in two states. A holiday on March 31 in California (César Chávez Day)  also had an effect on claims, he said.

Wanted By the Department of Labor

High Cost of Long-Term Employment: The Pew Charitable Trusts

Pew Economic Policy Group (a very detailed and thorough report)
The federal government defines “long-term unemployment” as a jobless period of six months or longer. In March 2010, over 44 percent of unemployed Americans met or exceeded that standard—the highest rate since WorldWar II. In contrast, during the severe recession of the early 1980s, the percentage of workers unemployed for six months or longer peaked at 26 percent in 1983.

The media have reported the historically high six-month unemployment figure, but a new study by the pew fiscal Analysis initiative goes further by calculating the percentage of people who have been unemployed for a year or more. This analysis further illuminates the extent of the country’s long-term unemployment problem and its impact on the nation’s fiscal condition.

According to pew’s analysis of Current population survey (Cps) data from December 2009, 23 percent of the nearly 15 million Americans who are unemployed have been jobless for a year or more. That percentage translates into 3.4 million people, roughly equivalent to the population of the state of Connecticut.

Long-term unemployment cuts across nearly every industry and occupation. Even in fields with overall unemployment rates that are relatively low, workers who are unemployed are remaining so for a long time.

Long-term unemployment is occurring among people of all ages. While workers 55 or older are less likely to become unemployed, those who do are more likely to stay unemployed for a long period of time. Nearly 30 percent of unemployed people 55 or older have been jobless for a year or longer—a higher rate than any other age group.

Once a person is out of work, a high level of education provides only limited protection against a long period of unemployment. Twenty-one percent of unemployed workers with a bachelor’s degree have been without work for a year or longer, compared to 27 percent of unemployed high school graduates and 23 percent of unemployed high school drop-outs.

In the current fiscal year, federal spending on unemployment benefits is projected to be five times greater than it was in each of the years immediately preceding the recession. in each fiscal year between 2005 and 2007, annual federal spending on unemployment insurance ranged between $31 and $33 billion. Federal spending on unemployment benefits could reach $168 billion in fiscal year 2010, of which $81 billion represents spending on regular benefits. The remaining $87 billion represents the cost of additional unemployment aid that Congress has approved (or is poised to approve) to help people who have been out of work for six months or longer.

The high long-term unemployment rate represents the continuation of a decades long trend, one that has worsened after downturns but has persisted even during periods of growth. in March 2004, at its most recent peak, the percentage of people who had been unemployed for at least six months was 23.4 percent. In November 2007, the last month of economic expansion before the current recession, 19.5 percent of the unemployed had been jobless for at least six months (see figure 1).

Pew’s analysis further illuminates this problem by calculating the percentage of people who have been unemployed for a year or more. in December 2009, nearly three and a half million Americans, or 23 percent of the unemployed, had been jobless for a year or longer.

The nation’s long-term unemployment rate is historically high, and it has had a substantial impact on families, government budgets and the country’s overall economic health. Pew’s finding that nearly a quarter of the unemployed have been out of work for a year or more casts new light on the extent of the problem.

Federal spending on unemployment benefits could reach $168 billion in fiscal year 2010, more than five times the cost of benefits in the years immediately preceding the downturn. More than half of that amount represents the cost of extended benefits. The federal government’s decision to help unemployed workers pay for health insurance cost an additional $14.3 billion in fiscal year 2009, and could cost as much as $15 billion in fiscal year 2010. The high long-term unemployment rate also has spurred increased spending on other government safety-net programs and contributed to a decline in federal tax receipts.

Link to site to obtain complete report

Sunday Comics-Early Resurrection Edition

Christina Romer: "While this is the most positive jobs report

we have had in three years, there will likely be bumps

in the road ahead"

Barney Frank on Keith Olbermann: "This is a bring it on

moment, let's call their bluff should Republicans want to

defend the interest of banks over those of voters".

We paid this much for the Bear Stearns assets in an effort

to help our good friend and American icon Jamie Dimon.

Had we not paid this amount, Jamie would have told us to

pound sand and there would have been a

"vicious circle of forced selling".

As noted in our release this week, our Bear Stearns assets

are currently valued at....

Obama on today's jobs report:

"We are beginning to turn the corner...

we're still going to have a rough time..."

$4 Billion Neighborhood Stabilization Program.

Federal Government relaxes rules...

FAA Approves Antidepressant Medication While Flying

Apple ipad launch day

CMBS delinquencies continue to rise (Realpoint Research)

Realpoint Research
In February 2010, the delinquent unpaid balance for CMBS (commercial mortgage backed securities) increased by another $1.87 billion, up to $47.82 billion from $45.94 billion a month prior. Aggregate delinquency increased despite a slight decrease in 30-day delinquency. The overall delinquent unpaid balance is up almost 300% from one-year ago (when only $11.98 billion of delinquent unpaid balance was reported for February 2009), and is now over 21 times the low point of $2.21 billion in March 2007. The distressed 90+-day, Foreclosure and REO categories grew in aggregate for the 26th straight month – up by $2.88 billion (9%) from the previous month and $29.36 billion (420%) in the past year (up from only $6.98 billion in February 2009).

Based upon an updated trend analysis, we now project the delinquency percentage to grow to between 8% and 9% through mid 2010, potentially approaching and surpassing 11% to 12% under more heavily stressed scenarios through the year-end 2010). This forecast / outlook is driven by the watchlist reporting of several Realpoint identified High Risk Loans from recent vintage transactions that continue to show signs of stress and are on the verge of delinquency, along with continued balloon maturity defaults from more seasoned transactions. As part of our monthly surveillance efforts of every CMBS transaction, we continue to monitor in detail many large Realpoint Watchlisted loans that have never met their pro-forma underwritten expectations. This includes a large amount of loans that remain current in payments but have already been transferred into special servicing - many of which may ultimately default based upon a denial of requests for loan modifications or debt restructuring by the special servicers, or a decision by borrowers to surrender the collateral.

Delinquency Rates
5.999% February 2010
5.762% January 2010
5.223% December 2009
1.431% February 20009

Link to complete Realpoint report


Our super hero Tim Geithner has commercial real estate under control...

CNBC interview on 3/29/10: Mounting losses from commercial real estate loans will continue to be a problem for the U.S. and especially smaller banks, but it can be managed, Treasury Secretary Timothy Geithner said Monday. "Commercial real estate's still going to be a problem for the country," Geithner said in an interview with CNBC. "But we can manage through this process."

"There's no need to fear, Tim Geithner is here"!

 

ADP Payroll Report…. Loss of 23,000, SWING AND A MISS!

The consensus Wall Street pundits forecast an increase of 40,000 private sector jobs for the month of March. Don’t worry about the equity market, as this is a jobless recovery! The Quant robot traders refuse to let fundamental economic data get in the way of an orchestrated upward trajectory. PLUS, it is the end of the quarter; it is imperative to end on an up note so fund managers are assured their bonus and receive the happy hour invitation.

Remember America, this is not about you. The equity market is best left to the few, the proud, the manipulators.

Non-farm Private Employment Highlights
Total employment: -23,000
Small businesses* -12,000
Medium businesses** -4,000
Large businesses*** -7,000
Goods-producing sector: -51,000
Service-providing sector: +28,000
Addendum:
Manufacturing industry: -9,000

“The economic recovery has not been long enough or strong enough along the way yet to produce the kind of rapid employment that people are hoping for,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, which produces the figures with ADP, said in a conference call with reporters after the report.

“Today’s figure does not incorporate a weather-related rebound that could be present in this month’s” report from the Labor Department, Prakken said in a statement. “It is reasonable to expect” that the government’s report will be “stronger” than the ADP estimate”.

THANK GOD FOR THE WEATHER CARD!

ADP Report