Schweizer

Strong Recovery Signal from Chicago Fed

Airports are empty
Restruants are empty
Rail traffic flat for over 9 months and a leg down seems to be starting.

What the hell is the FED measuring anyway? I know, nothing. They use "models."

Liz Ann Sonders: Job Gains Possible by Year-End

Don't trust anyone who's job it is to take money from you. Sonders is no exception. I wonder what will become of these types as the SPX tumbles to new lows over the next year.

No one is hiring
Few people are spending
Debt is a 4-letter word

Enough said.

Analysts don't expect a Fed rate hike until 2010 or 2011, but when the time does come, the Fed may opt for a rapid and aggressive increase (using what Bernanke calls the "cold turkey" approach) instead of its usual policy of gradualism.

History has shown that the FED reacts to rate increases rather than initiates them.

All Economic Data Turning Up

If I could borrow $10M from the future and spent it now I would look rather prosperous too.

A stimulus spending bounce is all that you see, and it will fade like the evening sun.

Current Market About to Lose Momentum - Gundlach

He's got it!

Defaults made dollars vanish and thus each dollar is worth more. The Treasury and FED are not going to step in as these defaults mount. The FED is already $2T invested but the private debt size is $50T with a good chunk of it about to default. This is a wave too big to be held back by printing or borrowing more dollars.

Stimulus Can't Save the Stock Market

The $787B "stimulus" was simply money the feds borrowed to backfill tax revenue drops experienced by state and local governments. It temporarily saved thousands of government jobs that should have been scrubbed-out like private jobs have, and allowed some already planned transit projects to continue rather than be halted. Very little was stimulative - just raw spending.

And if you look closer, there is also a strong social engineering overtone to where the money was mandated to be spent. Obama used the economic crisis to fund his socialistic agenda. Despicable.

People should not expect this money to jumpstart anything other than outrage about how Washington behaves.

Stimulus Roll-Out

That chart illustrates 2 things:

1. Social Engineering using economic panic as an excuse to get away with it
2. Backfilling of collapsing State revenues to save government jobs and to salvage already-planned transportation projects. Not stimulative.

"Stimulus" has to have clear leverage. This bill was just pure "spending."

I'd like to see a chart where State budget shortfalls were overlayed on it in some way to see if there truly any net positive money left over to help the economy. My guess is that all $787B was just Federal borrowing to offset $787B in lost tax revenue across the country and very little of it is being used for "new" spending.

Preview: August Employment Report

Jeff, thanks for the follow-up. I do think a monthly chart with 3 lines on it would help readers understand why tracking the BLS estimates is so difficult. The graph would have their initial reported number, their revised (delayed 9m) number, and your estimate at the time. Even now this could be reconstructed from history and it would be beneficial and perhaps help improve your future estimates.

"The great recession of 2007-2009 may have long-lasting financial and psychological effects on millions of people, and therefore on the nation's social fabric," according to a large survey released by Rutgers (.pdf) this morning. Two thirds of unemployed say they're depressed, over half have borrowed money from friends or relatives, and a quarter have skipped mortgage or rent payments.

2007-2009? Better use 2007-201X.

It is a long way from being over. GDP is not the only measure and it can reverse in a hurry.

Employment Outlook Is Improving

Well the V-shaped recovery at the end of 2001 didn't pan out now did it? That's because the unemployment rate increased well into 2003 and only when the rate reversed did the market actually bottom - and that was about 40% lower than in late 2001 when the recession "ended" officially. The V-shape pundants were wrong then and will be wrong again.

In 2003, the unemployment rate peaked at 6.2%. Things are far worse now and the root of the problem (massive debt) is far more serious than the "dot-com" bubble. Our rate is 9.4% now and estimates are for as high at 13% down the road.

All that is happening is a bounce. Nothing has fundamentally been fixed, and the bottom will come in when it is fixed.

Preview: August Employment Report

Your estimate was way off last month and you never explained why. You estimated -441K vs -247K BLS "truth."

You should include a graph of your estimates vs BLS. Thanks.

Sure It’s Legal … But Is It Right?

Wall Street still has the goverment by the balls. Pay me what I want or I push the systemic collapse button.

Sell in September? Time for a Reality Check

September will be far worse than average. Just watch.

Manufacturing: Will This Be a V-Shaped Recovery After All?

Too bad shipping (ocean and rail) do not support your inventory build thesis. The Baltic Dry index is at a 3 month low and off 44% since June.

Just sayin'.

Weaker Dollar, Stronger Equities

A PE on the SP500 of 130 may have something to do with the sell-off.

Just sayin'.