Economic News 12-14-12

Well, let’s get to it.

But first, you should probably DUCK

I don’t want you to hit your head on the debt ceiling.


From ZeroHedge

“At the end of October, as the Tristate Area was being flooded by Hurricane Sandy, one after another Wall Street firm tried to position Sandy virtually as a non-event, with total damage “forecasts” by such “reputable” firms as Goldman Sachs and Bank of America forecasting a total bill between $10 and $20 billion (as anything above that and the Q3 damage to GDP would be far more substantial than their recently bullish forecasts had accounted for, and would also imply a substantial spillover effect into Q1 2013), the same as various insurance companies who had other far more obvious reasons to undershoot on the total damages. We said the opposite, and based on historic damage forecasts, predicted the damage would likely be between $50 and $100 billion. Once again the sellside consensus was wrong and a fringe blog was accurate, as the CBO has just released the Obama administration’s full aid request. Bottom line: $60.4 billion, or roughly what one year of what the ultimate tax hike compromise will bring into the government’s treasury. Furthermore, if fully funded by debt today, this amount would send the US (which has a $57 billion debt buffer as of this moment) over the debt ceiling immediately.

Expect this number to rise even more before all is said and done.”


Oh look! They found a new place to use “unexpectedly” other than the Jobs numbers.

From FoxNews

“The U.S. budget deficit unexpectedly increased in November, to $172 billion  for the month — pushing the country one step closer to the limit on government  borrowing.

The Treasury said Wednesday the deficit last month was $22 billion more than  the October mark and up from $137 billion in November 2011.

The numbers paint a gloomy picture of the country’s fiscal health and could  complicate already delicate negotiations in Washington over tax rates and  spending cuts with a deadline looming to to avert a fiscal crisis.”


This one is from TheWeeklyStandard

“”President Obama’s ‘Plan’ Adds $8.6 Trillion to the Debt,” the minority side of the Senate Budget Committee contends.”

“With Obama’s latest plan, debt in 2022 is expected to be $25.4 trillion; otherwise, in ten years, it is expected to be $25.8 trillion.”

“With the adoption of the Budget Control Act (which immediately raised the debt ceiling $2.1 trillion in exchange for $2.1 trillion in spending cuts over 10 years), the United States is presently on course to add $9 trillion to the gross federal debt by 2022,” write the Republicans on the Senate Budget Committee. ”

And yet the President is said to be in the better position in negotiations?

Really? How is that even possible?

His debt reduction plan does nothing, and does little to reduce the debt. Seriously? 10 years to reduce it less than a half a trillion and he calls this a plan?

This is madness.

Economic News 10-26-12

New numbers came out yesterday.

From ZeroHedge

“When we reported on the surge in last week’s initial claims from 342K to 388K, we made one simple forecast: “Remember: this number will be revised to 391K next
” We were off: it was revised to 392K. In other words, the data charlatainism at the DOL continues unabated. And of course, today’s Initial Claims number which magically “beat” expectations by 1K, printing at 369K, on expectations of 370K, will be revised to a miss of 372K next week. The BLS has become a total farce. In other manipulated news, the BLS reported the culprit for last week’s surge in Claims: it was California, which saw a +26,935 jump in initial claims, due to “Layoffs across all sectors, with the largest share from the service industry.” This somehow is supposed to offset the -4,979 claims drop from the week before, when all those plunges and jumps in claims took place. Elsewhere, the number of Americans on extended claims and EUCs dropped to 2.1 million, down 1.4 million from a year earlier.”

And those folks didn’t find jobs, they were simply dropped off, no longer counted. Check out the 1st chart, which shows the drop in unemployment by the reported numbers, which is blue. But when you look at the red line which is after they revise it up to reality, you see that it’s mostly a flat level, meaning initial claims continue at much the same level. The officially released line is worthless upon revision. Propaganda.

InvestorsBusinessDaily chimes in with this. Yes, it’s as bad as it looks.

“”In many ways, because of the actions we took early on, we’re actually ahead  of pace in the typical recovery out of a recession like this,” Obama said.

It’s a point Obama and his supporters have made on occasion throughout the  campaign. Earlier this year, Obama told attendees at a fundraiser about the  “extraordinary progress” the economy was making.”

“But the data are clear that Obama’s economic recovery — which started in June  2009, five months after he was sworn in — has been worse than any recovery since  the Great Depression.”

RealClearMarkets asks the obvious question. This is what happens when you listen to Keynesian hacks.

“Did Economists Doom Obama’s Presidency?”

“If President Obama loses the election in November, economists may well end up taking a share of the blame – for good reason. Their models misled him into applying ambitious stimulus therapies to jump start the economy and boost employment that haven’t worked, vastly undermining his re-election prospects.

Back in January 2009, a now infamous study coauthored by Christina Romer, the future chair of the President Obama’s Council of Economic Advisors, and Jared Bernstein, the future chief economist for the Vice President, predicted that an $800 billion economic stimulus targeted toward boosting consumer demand would stave off a severe recession and hold unemployment below 8 percent by the end of 2009.

What was so compelling about their study was the illusion of precision. The Obama administration used their statistical analysis to aggressively promote specific policy proposals, including the package of tax cuts and discretionary federal spending embodied in the so-called stimulus package, the American Recovery and Reinvestment Act of 2009. But little of what they predicted has panned out.”

And this should be a message to the Obama campaign,  from TheWashingtonExaminer

“Bad news will greet Vice President Joe Biden when he arrives in Wisconsin Thursday night. Hours earlier, Oshkosh’s largest employer announced that it will lay off 450 employees in January.”

“”As Oshkosh and others in the defense industry have discussed on numerous occasions, domestic military vehicle production volumes will decline significantly in 2013 due to the reduction in U.S. defense budgets and the fact that military spending is returning to peacetime levels,” the company said in a statement. “Unfortunately, these economic factors require Oshkosh to rebalance its defense production workforce starting in January 2013.”

The company said the layoffs were not tied to the looming budget cuts set to take effect in January.”

We need a new path, this one is not working.

New UC Numbers 10-11-12

At this point, I don’t know who to believe. But I notice one state failed to report, or be included.

They haven’t named the state, but I have a hunch. If I was a desperate President from Chicago looking to intentionally fudge things, what better state than my own, where the leadership is friendly to my re-election chances. Just sayin’. We’ll see if I’m correct.

From ZeroHedge.

“Data Massaging Continues: Initial Claims Tumble To 339K Lowest Since 2008, Far Below Lowest Expectation”

“This is just getting stupid. After expectations of a rebound in initial claims from 367K last week (naturally revised higher to 369K), to 370K (with the lowest of all sellside expectations at 355K), the past week mysteriously, yet so very unsurprisingly in the aftermath of the fudged BLS unemployment number, saw claims tumble to a number that is so ridiculous not even CNBC’s Steve Liesman bothered defending it, or 339K. Ironically, not even the Labor Department is defending it: it said that “one large state didn’t report some quarterly figures.” Great, but what was reported was a headline grabbing number that is just stunning for reelection purposes. This was the lowest number since 2008. The only point to have this print? For 2-3 bulletin talking points at the Vice Presidential debate tonight. Everything else is now noise. It is also sad that the US “economy” has devolved to such trivial data fudging on a week by week basis, which makes even the Chinese Department of Truth appear amateurish by comparison. Needless to say, Not Seasonally Adjusted initial claims jumped by 26K to 327K in the past week but who’s counting.”

Read more here

Also, keep this in mind, also from ZeroHedge,

“Wake Up Media, the BLS Has Been Fudging Its Numbers for YEARS”

Pop Quiz…

How does the US economy add 800K+ jobs during a month in which employment taxes and consumer spending FALL?

Answer: magic! Or actually the BLS lied… again.

It’s truly staggering to see this brazen a lie out in the public. Even by the BLS’s standards (which has been massaging the @#$% out of its jobs data for years) this latest monthly employment number was a stretch.

Of course, no one bothers explaining just how fraudulent the data was, because that would mean questioning the credibility of the BLS. Instead the whole issue becomes one of politics in which the talking head idiots spar about nothing of import, in yet another attempt to distract the masses from the fact that the Government openly lies about inflation, employment, GDP data and just about everything else.”

Read more here

And check out the comment from OC Money Man in the comments, titled “PRESIDENT HOUDINI THE EMPLOYMENT MAGICIAN”

Are the new welfare work requirement rules, changed by Obama, being used to manipulate data by calling welfare recipients employed? Good question.



So who is the State not reporting? The BLS isn’t saying.

From BusinessInsider

“And from the WSJ:

“However, the report may not be as positive as  the sharp drop indicates. A Labor Department economist said one large state  didn’t report additional quarterly figures as expected, accounting for a  substantial part of the decrease.”

Initially, rumors started circulating that an entire state’s worth of jobless  claims was excluded.

The DoL was not immediately available to comment.

However, CNBC’s  Kelly Evans is reporting that the discrepancy is that “one state did not  process & report its typical seasonal workload” and that a rebound next week  is likely.

Read more here




“Here’s what actually happened. The state did report weekly jobless claims but did not process and report its quarterly claims number (when many people have to reapply for benefits for technical reasons as opposed to being newly laid off). As a result, there wasn’t the expected spike in claims that normally happens at the start of the quarter.

It is unclear why that happened or how unusual that is. What is clear is that the expected spike in claims around the start of each quarter was smaller this time than usual. Coupled with the seasonal adjustment (that expected a bigger increase), that pushed down the headline figure.

In other words, the drop of 30,000 last week had more to do with the lack of expected re-filings at the start of the fourth quarter than with any particular improvement in labor market conditions.”

Read more here

They still haven’t identified the state responsible.

The Economy 10-5-12

The new Unemployment rate is out.

And it’s dropped to 7.8%— Yay!

Or not.

CBS would like you to think so.

The Labor Department said Friday that employers added 114,000 jobs in September. The economy also created 86,000 more jobs in July and August than first estimated. Wages rose in September and more people started looking for work.

The revisions show employers added 146,000 jobs per month from July through September, up from 67,000 in the previous three months. The unemployment rate fell from 8.1 percent in August, matching its level in January 2009 when President Barack Obama took office.

The decline could help Obama, who is coming off a disappointing debate performance against GOP challenger Mitt Romney.”

It’s not until the last paragraph that they mention this,

“Still, many of the jobs added last month were part time. The number of people with part-time jobs who wanted full-time work rose 7.5 percent to 8.6 million.”

Read more here

More here from AEI

“Is this the Obama October Surprise?

Only in an era of depressingly diminished expectations could the September jobs report be called a good one. It really isn’t. Not at all.

1. Yes, the U-3 unemployment rate fell to 7.8%, the first time it has been below 8% since January 2009. But that’s only due to a flood of 582,000 part-time jobs. As the Labor Department noted:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.”

“4. The shrunken workforce remains shrunken. If the labor force participation rate was the same as when President Obama took office, the unemployment rate would be 10.7%. If the participation rate had just stayed steady since the start of the year, the unemployment rate would be 8.4% vs. 8.3%. Where’s the progress?”

Read more here

And this from ZeroHedge

“We already noted the absolutely stunning surge in reported Household Survey jobs which “added” 873,000 jobs, or the most since 2003 and the
second most in the past decade, which was just a little bit off the Household Survey used in the monthly NFP jobs changes, which came at 114,000, or about 8
times less. But what was the reason for this epic jump in Household survey jobs? Simple, and those who have read our series on America’s transition to a
part-time worker society know the answer. The reason is that the number of part-time people employed for economic reasons soared by 582,000 to 8,613,000,
the most since October 2011, and the largest one month jump since February 2009, when “restoring” confidence in the economy was all the rage… and just before
the Fed announced the full blown QE1 in March of 2009. Odd symmetry.

So putting it all together, what does this mean for the true state of the US economy? Recall back in September one of our Charts of the Day was the number of Unemployed and Underemployed for the month of August, which was 25.8 million. Readers may be surprised to learn that when putting it all together, in September this number increased to 26.2 million.”

The charts are here

Rick Santelli over at CNBC isn’t buying it.

You can see the whole video from CNBC here

Good news? Depends who you ask.