…it can’t get any worse – it does! …and that is despite some decent news on jobless claims…but who cares anyway… today is the all important payrolls and they don’t look like they are going to be good.
So today is payday for the economic news and payrolls are expected to grow by about 50k…a pretty pathetic showing and in a couple of months we get the benchmark revisions which we already know are going to reduce the number of jobs by a million or so due to the Birth/Death of business stats which have been overstating them for the past year.
Still a big debate about whether this is a slowdown or a recession. Pay attention to the Iowa caucus as the two winners, Obama and Huckabee, stressed the wealth gap with CEO’s getting rich while middle class workers are losing their jobs. Huckabee is now the only GOP guy who has broken ranks with the party on this issue. Also interesting that Hillary is in a tie with Edwards…not that TB is disappointed with that turn of events. It didn’t take long for Larry Kudlow to lash out against both of them since he believes everything is rosy…that is because he has no clue on anyone below his ’station’ in life.
Perhaps he and the others in New York City can be excused seeing the real estate market just keep on truckin’…in Manhattan…not what TB is hearing in the Hamptons or the rest of the state which is not so strong. That has long been a pet peeve of TB’s that all the decision makers are in NYC and they are blinded to the rest of the country if they are doing well. In fairness, desirable areas in SF, LA, and other areas are doing well but eventually they can’t mask reality.
Post employment: This was truly ugly and the specter of stagflation will make the Fed’s job that much tougher…but a jump to 5% on unemployment is clearly a wake-up call and validates the concerns of the wealth gap of Obama and Huckabee…if you doubt this, there was an unprecedented surge of voters in Iowa shifting from GOP to Dem affiliation…they even ran out of forms. The race will get interesting now!
The sad part of all this is that long-term investors have been ripped off by corporate directors and CEO’s with little to show for it…as former compensation analyst Graef Crystal and TB have often pointed out…there is no correlation between CEO compensation and performance. Still think stocks are undervalued?…still think a stock buyback is as good as a dividend increase? Turn on the coffee pot!
By the way, TB’s memory was jogged to check out Graef’s columns of late (NI Crystal on Bloomie). On 11/20 he wrote about Merrill signing John Thane…what a joke: Crystal estimates his base compensation at $64 million…plus a $15 million signing bonus for showing up on Dec. 1 – supposedly to compensate him for lost bonuses and options at NYSE/Euronext but points out that in 2006 his bonus there was a mere $3.25 million. Also, like TB, Crystal is no lover of CEO compensation and laments that he helped cause the problem…that is why he is so adamant about it…he is always a good read…and insightful.
It gives no joy to TB to be right about the problems in this economy or the blissful neglect (was going to say benign but it is anything but that) of the economists and most strategists….Merrill’s David Rosenberg excepted! This will be an ugly day…and an ugly end to the past two weeks…sadly the last week of the old year and first of the new one. Batten down the hatches and good luck!
TB
Trader Bill thinks it is clear to anyone reading these missives that they are merely commentaries…as he sees it…and in no way reflect the views of anyone other than himself. Information is gathered from sources he has found reliable, but no guarantees of accuracy are implied. No fee…nothing to sell…merely observations of events in the marketplace offering a non-mainstream viewpoint…sometimes…usually? Hope you find it useful.
Copyright TBD Capital LLC January 4, 2008
Copyright TBD Capital LLC January 4, 2008
