• 6 minutes WTI @ 67.50, charts show $62.50 next
  • 11 minutes Saudi Fund Wants to Take Tesla Private?
  • 17 minutes Why hydrogen economics is does not work
  • 8 hours Starvation, horror in Venezuela
  • 3 hours The EU Loses The Principles On Which It Was Built
  • 9 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 5 hours Crude Price going to $62.50
  • 14 hours Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 7 hours Chinese EV Startup Nio Files for $1.8 billion IPO
  • 18 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 7 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 19 hours Correlation does not equal causation, but they do tend to tango on occasion
  • 1 day WTI @ 69.33 headed for $70s - $80s end of August
  • 18 hours Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
  • 20 hours Monsanto hit by $289 Million for cancerous weedkiller
  • 1 day California Solar Mandate Based on False Facts
Alt Text

Did Venezuela Just Default?

S&P Global Ratings declared Venezuela…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Trending Discussions

Reading the Nonfarm Payroll Tea Leaves

Lifetime followers of the monthly nonfarm payroll report were more than a little amused by the Friday numbers, which could not have been more contradictory, conflicting, and confusing. The headline figure showed a gain of a paltry 36,000, yet the unemployment rate plunged 0.6% to 9.0%, one of the sharpest drops on record. In fact, the unemployment rate has fallen nearly 1% in two months, one of the sharpest drops on record.

Sifting through the tea leaves, these numbers reveal far more than meets the eye. Here are the high points:

*The unemployment rate dropped sharply because people are giving up on looking for work. Once the jobless exhaust their full 99 weeks of unemployment insurance, they disappear completely out of the system.

*Two successive “snowmageddons” possibly shrank employment by as much as 150,000. Construction and transportation were especially hard hit. Check out those amazing photos of cars buried by snow drifts in a Chicago traffic jam. They look like they are from a disaster movie. Those are all people not getting to work.

*The private sector gained jobs, while the public sector lost them. This is only the beginning of what I believe is 30 more years of government downsizing at the federal, state, and local levels.

*The 25 million jobs the US gave away to China and other emerging markets are never coming back, no matter how much the government spends. Unemployment is now structural and permanent. An entire generation of jobs was given away.

There is another big factor at work here that no one is discussing. I am not counted in the nonfarm payroll, as I work entirely in the cloud. Nor is anyone who works for me, be they in Washington, New Mexico, New York, or Timbuktu. We are all invisible to the Department of Labor. For all they know, we are all at home sitting on the sofa, watching TV while stuffing ourselves with bonbons, and picking the lint out of our navels.

What I’m getting at here is that the monthly nonfarm payroll is vastly underestimating the number of employed, and has been doing so for a very long time. It reminds me of another anomaly, when personal computers first came one the scene 30 years ago. The government originally treated them as consumer electronics sales, not as capital spending as it should have, similarly misleading us all.

The implication is that the economy is much stronger than we realize. The stock market correctly figured this out, eking out a 30 point gain on what were heralded as disappointing numbers. This is also how some 70% of companies have beaten conservative analyst forecasts in the current earnings season. All that is left to ask is how much of this undercover jobs boom is already priced into the market.

By. Mad Hedge Fund Trader




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News