Posted on 05/07/2013 6:41:42 AM PDT by blam
The US Economy Is The Envy Of The World Again, And Just Like That The Bears Have Been Annihilated
Joe Weisenthal
May 7, 2013, 4:44 AM
Just two and a half weeks ago, the bears were starting to feel good.
Markets around the world seemed to be rolling over. Commodities were falling. People were talking about deflation.
And then, the market turned, and then we got Friday's strong jobs report.
Now the market is back to making new highs again, and the market bears are crushed.
A new note from Olivier Korber at SocGen is titled "US payrolls annihilated 'sell in May.'" Basically, whatever temptation there was to dump risky assets starting in May (as the cliche goes) has been sapped.
Separately, Steven Englander of Citi wrote yesterday:
The implications of the payroll release for FX is that the US is back on track as an outperformer (admittedly modest, but still standing out) in a world of underperformance, From a Fed perspective labor market improvement since last year has been steady but clear, with household and payroll employment and aggregate hours converging to a 1.5% y/y gain (Figure 1, upper panel). This is probably at the low end of what the FOMC core would consider acceptable.
This idea of the US being the one country that you "must own" was a huge theme in markets during the first quarter. Everyone sensed that the US was going towards liftoff, and that regardless of whatever else, exposure to the US was a must.
The same takeaway was offered from trader Mark Dow, who tweeted yesterday.
For now, the US is back to being the envy of the world.
(Excerpt) Read more at businessinsider.com ...
yes the jobs markets are mostly in terrible, terrible condition and getting worse, not better.
the reported “new jobs” were (more than) all in part-time situations. Or, in other words, Obamacare’s new taxes and regulations and “fines” ... are forcing employers to either lay off more workers or else convert (limit) more of them to part-time only status.
Good for you. What other historical precedents result in you sticking your head in the sand?
LOL! So an incredibly extreme example (probably an 8 sigma event) is a relevant “precedent”? Brilliant.
Exactly. Well put.
Right.
Reality is that stock prices going up means more hiring and lowering stock prices mean layoffs.
Excellent job proving your point that opinions are not fact.
The only thing that results in job growth is opportunity. If there is no projection that equates to increased demand, there is no need to hire more people. Profits and employment are associated, but not linked. A company that lays off 100 shovelers and buys one bulldozer may have higher profits and lower employment.
Looking around at the worlds economies over the last 70 years, I would say that the Weimar experience isn't that far off from the norm.
The only thing seperating the U.S. dollar from the currencies of South America, the pre-euro southern europeans, and ultimately Zimbabwe, is the fact that we are still treated as a world currency. The day that we cannot pay off bonds or pay for goods in U.S. dollars is the day that this house of cards comes down.
How do you envision the exit from QE going? Where are interest rates going to go when competitive rates have to be paid? What do those rates do to bond issues, home prices, and business capital?
Yep, super rosey outlook we got here. Best I've seen in 40 years! Buy, buy, Buy!
The Shadowstat figures are the closest approach to the key metric of "people who could potentially work but who aren't working".
Hope this is helpful.
I’ve posted the U6 chart dozens of times as well. I’ve heard of shadow stats but don’t place a lot of stock in it. Thanks for posting.
Precisely.
And you know what? Those Zimbabwe companies had massive gains in profit as well (measured in Zimbabwe dollars).
Job gains? Not so much.
That entire post is incorrect.
Any householder over 15 is questioned on their employment status. The only thing that disqualifies them from being considered ‘unemployed’ is answering that they do NOT WANT TO WORK.
And two jobs doesn’t count as two people employed if tied to the same person.
We're not talking profits and employment.
What we've associated here are stock valuations and employment. Something else we've associated is the timing, that an increase in stock prices is followed by a later increase in employment. It's very possible that the actual cause of both is some combination of new orders + falling inventories + soaring profits that all combines to first increase the stock price and then afterward force companies to hire.
It matters little; bottom line is still "the market is jobs".
see post 93 for direct refutation of your linkage analysis as being a “fact”. If the same fundamentals don’t exist, then historical analysis is useless.
The only way that employment stats have improved has been by decreasing the number of people in the workforce pool.
But they do. We now have welfare mamas and the chronically unemployed with big screen televisions and all the movies ever made at their disposal and they can consume such with copious amounts of food and drink purchased with food stamps.
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