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  • Talk about a snow job
    Jobless claims came out weaker than expected this morning at 496,000.  We probably hit 500,000 but the labor department tweaked some assumption and it kept it under 500,000.  They also offered their brilliant insight, again using seasonality and the seasons to explain away all bad news by pointing to a claims processing backlog caused by the snow in the NE.  Don't they know that claims are by and large processed on-line?  Talk about a snow job!!

    On Thursday February 25, 2010, 8:34 am

    WASHINGTON (NYSE:AP) -- The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snows caused layoffs to rise.

    A Labor Department analyst says mid-Atlantic and New England states are still processing a spike in claims stemming from the bad weather two weeks ago.

    The department says first-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000. Wall Street analysts polled by Thomson Reuters expected a drop to 455,000.

    The four-week average, which smooths volatility, rose by 6,000 to 473,750. Continuing claims were essentially unchanged at 4.6 million.

    Initial claims are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.



    Disclosure: No stocks mentioned
    Feb 25 8:59 AM | Link | Comment!
  • US Government: The Cat in the Hat


    Most of us should remember the story of the Cat in the Hat.  The kid (Wall Street and the banking industry) makes a mess and creates a stain and the Cat in the Hat (The US Government) tries one thing after another but can get rid of the problem.  The cat simply transfers the stain from one article to another actually making it far worse in the process.  Morale of the story: One can't run from or hide from problems to deal with them.

    *********
    This describes the economic mess we are in and have been for the last two plus years.  Consider the deep systemic problems we have with toxic assets, still overleveraged banks, under regulated and under restricted financial institutions, too big to fail firms, an American consumer with a disseminated balance sheet, a dysfunctional credit market, horrendous job and housing markets.

    It would be nice to think we just had the worst recession in 100 years (excluding the depression) and we have quickly bounced back and will enjoy a typical "V" recovery.  Only this downturn was far worse than a garden variety recession so the recovery should not be typical.  I know we would all hope it would be but it won't be.

    To make matters far worse, consider what the US government has actually done to fix the underlying problems.  

    Nothing

    In fact the government has put the same punch bowl out that got us into the mess in the first place.  More debt and consumption and don't worry about paying it back.

    *****

    In our case the US Government has deposited the stain on the taxpayers.  Some of us don't see it becasue we are wearing it.  But it is there, just repackaged. 

    Problem substitution is not economic resolution.


    Short Financials
    Oct 01 11:14 PM | Link | Comment!
  • Sophie's Choice: People or Profits
    Tags: Economy
    Jul 26 10:01 AM | Link | Comment!
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