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End of the Week Miscellany

Lots of talk about the goose egg jobs report today. 

What I saw was, the Verizon strike lowered private sector jobs by 45,000.  Meanwhile, government jobs were down 17,000. So the private sector actually created 62,000 jobs more than were lost.

That happened in spite of the debt ceiling circus, the feeding frenzy in Europe, and nattering nabobs of negativity. 

Meanwhile retail sales were better than expected, as were car sales. Car sales have been down by about 5 million per year for 3 years.  Meanwhile a lot of older cars are coming off financing and the owners get a pay raise because they don't have to make car payments for a while.  So they pay down their credit cards and maybe catch up with the mortgage, or maybe they continue in default, to keep their options open.

I saw a really dumb interview on Bloomberg today.  They were interviewing a gold miner in Death Valley, he was complaining how he needs 15 permits to do anything, meanwhile he has to crush and treat 870,000 lbs of rock to get one ounce of gold.  After all, nobody goes to Death Valley anyway, why make a fuss about the permits?  Why not just turn it into an immense slag heap in order to produce a few ounces of gold? 

Why not just leave it the way it was?  Is an ounce of gold worth that amount of destruction? Just take an ounce of milk chocolate and wrap it in gold foil, it is worth more.
Another thing, if you go to the Federal Reserve and check out DSR and FOR, both of these metrics are on a pace to be at levels consistent with a robust economic recovery by the middle of this year, or early in the fall.  That would be right now. The consumer is loaded for bear, and many of them are spending in spite of the negativity.  Most of them still have jobs, and they've figured it out: the people who lost their jobs two years ago can't get another one, but everybody else is going to be OK.  So why not give yourself a treat and buy a nice new car as a reward for sticking it out through all that bad stuff at work, the boss making you do the work of two people, no raises, realistic performance appraisals, people looking at their watches when you come in late? 

And NIPA corporate profits. I went to do my usual article, profits were so high I thought I was looking at the wrong table, I had to check back several years before I could verify I was using the same data.  Corporate profits as a percentage of GDP have never been higher, it was almost 11%.  It used to be 5% or 6%. And these people carp and complain about uncertainty.  Maybe they should spread the wealth around, hire a few trainees, teach them some skills, build up a little bench strength. 

Good to see FHFA suing all those big banks.  The financial system has a lot of uncertainty about who's holding the bag on all the fraud and dishonesty from the financial crisis.  Really great if the perpetrators wind up holding the bag.  

I don't see a double dip recession, and look for the economy to pick up during the second half.