Goldman's Macro-Bulls Out in Full Force

| About: Goldman Sachs (GS)

First the 85 Broads roll one of them out at CNBC, depositing the permabullish dinosaur Abby Cohen to preach how the bull market has just restarted compliments of the mega squeeze in AIG, Fannie Mae (FNM) and CIT (in finance you are as valuable if you bat 0.000 as if you bat 1.000), and now, hot on the heels of Hatzius' upgrade to Q2 GDP from 1% to 3%, they roll out another macro bullish piece, saying July nonfarm payrolls will be up to -250,000 from -300,000 (the question of whether the 50,000 actually matters in any scheme of things, is irrelevant).

Ironically, it was yesterday that Jan thought projected employment assumptions wouldn't budge. So much has changed in 24 hours.

Incoming information on the labor market has been a mixed bag, but in our view points towards a slightly better outcome than our first estimate made about two weeks ago. In particular, information on jobless claims suggests – even after correcting for seasonal distortions related to the timing of auto sector plant shutdowns – some improvement in the state of the labor market. Furthermore, the one-time effects from the temporary hiring/firing of Census workers earlier this year (which reduced government payrolls by 49,000 last month) are essentially over. More broadly, the economy appears to be stabilizing after the sharp declines of Q4 and Q1, and employment trends should follow this with some lag. Despite disappointments in Wednesday’s ADP employment report and the employment index of the ISM non-manufacturing survey, we are increasing our payroll forecast to -250,000, from -300,000 previously.

This all smells of last-ditch desperation to reel in the few remaining retail investors who still believe that Goldman Sachs (NYSE:GS) practices what it preaches.

Also, watch for this to make Breaking News on CNBC as soon as they figure out how to turn on the Bloomberg (that thumbprint sure is a brainteaser).

h/t Hedged In

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