8/5/11…asked and answered

Nonfarm Payrolls ROSE 117k in July vs. consensus for 85k triggering short covering in stocks…think about what this means…nothing! Meanwhile revisions added a puny 56,000 to May and June’s pathetic levels. Private sector added 154k jobs while government cut 38,000…and obviously more to come even as the economy weakens!


The Unemployment rate dropped 0.1% to 9.1% but that is in spite of the employment/population ratio falling to 56.1 – lowest since 1983 as discouraged workers abound. Worse 38,000 household jobs were lost. Average hourly earnings rose 0.4% - +2.3% from a year ago and the biggest gain since Oct. 2009 (making do with fewer workers???)


Market Reaction (8:45am EDT): the 30 year treasury gave up about a point on the headline news but is now off just 5/8 after that 4 point rally yesterday. Gold is off $5 to $1654 while Crude is rallying but after a $5 decline yesterday to $88.17. U.S. stock futures turned positive: DOW +137; SPX +17.90; NDQ +25.25.


Bloomberg Top Stories:


*Stocks Drop for Eighth Day, Commodities Erase Gain for Year; Franc Weakens

*Europe Struggles to Tame Crisis as Spain, Italy Get Respite in Bond Market

*Spain Paying Less to Borrow Than Italy for First Time in More Than a Year

*Payroll Gain in U.S. Was Probably Too Small to Reduce Unemployment in July

*Bernanke Models Prove Faulty as Forecasts Succumb to Change

*Citigroup Said to Get California Subpoena Over Mortgage Deals

*Stock Plunge Erasing $780 Billion Seen as ‘Orderly’ as Brokers Keep Bids

*FAA Set to Recall 4,000 Workers, Resume Full Operation on U.S. Senate Vote


Yesterday NYSE volume exploded to 7.5B shares, highest in 30 months as stocks self-destructed ahead of the July payrolls report. Big Board volume also surged to 1.82 billion from 1.5B, highest since March 18th. The S&P VIX moved in kind to 32.07, highest since July 1, 2010! It closed at 31.66 vs 23.38!!! Their were more signs of slower growth, increasing use of ‘stall speed’ and more talk of the Fed employing another round of quantitative easing (QE3). Bloomberg reported that consumer confidence among those making more than $100k fell to the lowest level since 2009!


We have had one puny up day in TEN sessions, with a big, fat explanation point placed on yesterday’s rout. Over the period the Dow is off 10.5%!Transports which had been very strong fell 13.3%, as did the Russell 2000 small cap. Not only have U.S. stocks suffered but so did the global exchanges. Remember the admonition to by emerging market stocks? That is not working well. Paulson who correctly ‘gamed’ the mortgage meltdown is an a world of hurt with double digit losses for the year in his funds…his winner? Gold fund which is up just 2.5% for the year!TB is not even going to bother with how the other indices fared yesterday as they were off from 4.6% on the NDQ 100 to 6% on the Russell 2000. New 52 week highs tumbled to an incredible 25 from 42 – they had been running in the hundreds, while new lows surged yet again to 781!!! From 491 – you have to go back to 2008-2009 to see this! That puts the ratio at -31:1!!!,and it has now been NEGATIVE for SEVEN straight sessions! Advance/Declines were bloody: NYSE: -21:1!!! and -12:1 on Nasdaq, while Breadth was an incredible NEGATIVE 87x on BOTH NYSE and Nasdaq!!!


Overnight global equities are tanking again: UK’s FTSE -1.9%; French CAC 40 +0.4%; German DAX -1.5%; Nikkei -3.7%!!!; Hang Seng -4.3%!!!; Korean Kospi -3.7%!!!; Indian SENSEX -2.2%!!! U.S. Futures were sharply lower but have come back ahead of payrolls – for now!: DOW -34; SPX -0.80; NDQ -5.75. Gold is $1662.00 +$3.00 on an inside session after suffering a key reversal yesterday in the wake of another record high of $1684.90, while Crude is accelerating to the downside, $86.14 -49 afte4r losing $5.40 yesterday and hitting the lowest level since September 2010 overnight. 95.10, the 200 day is major resistance. U.S. treasuries are slipping ahead of payrolls, but following the huge rally of yesterday, who cares. 30 year 3.70%-5/8, but yesterday’s rally was an incredible 4-3/8 points! the 10 year 2.46% -1/2…after rallying nearly 2 points yesterday. Prices just ahead of payrolls.


…TB is not that smart…yet how come he could see the economic weakness while the bulls referred to strong corporate earnings and the ‘healthy debate’ over the debt ceiling of all things! Healthy? It shouldn’t have even been a discussion. Instead the two parties…three if you count tea leaves…verbally assailed one another in terms as LBJ would have described as “names I wouldn’t call my dog.” But it was healthy and all about the future of America…preserving it for the kiddies. Now they have crawled back into their dens as Rome crumbles…at least Nero entertained the Romans with his fiddling (not in reality, another myth). No, we have nothing to show for it but a market that is a shambles. Consider:


*87 times the down volume as up volume yesterday on BOTH NYSE and Nasdaq

*21:1 stocks declining on NYSE; 12:1 on Nasdaq

*5 stocks up in the S&P 500, ZERO on the Dow (10 of which lost 15+ index points!)

*All 100 Nasdaq stocks were down – led by tech: Apple with 13 index points!

*Only 51 gainers in the Russell 2000 small cap index!


TB could go on…and on…but you get the picture…now add to this the global stock indices and the emerging market indices you were advised to buy and we have a global problem.


Last night, Mike Bloomberg and others echoed TB’s cry yesterday that the markets have lost faith in government as commodities (including gold failed to rally), and crude plunged $5 to close at just over $87. Meanwhile the 30 year treasury rallied by an incredible 4-3/8 points  to 3.7%!


The approval rating of Congress has fallen to just 12%, lowest ever TB believes. Do you still believe the debate was healthy? Healthier than just passing the debt ceiling which the GOP has done consistently when in power and quietly sitting down to hammer out a budget that is born of compromise instead of extortion. Now they can’t even address one another civilly.


. . .  – – –  . . .    . . .  – – –  . . .


While TB voted for Obama as he felt he was the only possibility of change in Washington, he has been sadly disappointed with his performance and misinterpretation of the mandate by him and the left wing of the Democratic Party.


Yet the far right, not content to condemn him for his failures has been spreading lies and distortions of truth…over and over. Why do they have to do that? As TB has repeatedly said, “there have been enough things he has done wrong without making up lies about the President of the United States.”


Yesterday, the right began sending out letters again that the American Communist Party has endorsed Obama. This implies that this is news, first, and second that he sought it. Regardless, this isn’t even ‘real’ news. If you Google “Obama Communist Party Endorsement” you will get 1.6 MILLION hits. The first going back to June 30, 2008, when they first endorsed his candidacy for President. So is this news? No, it is simply more smear. Think about this if you were a member of that party…who would you endorse? While the GOP battles for who will challenge Obama, he has no challengers and won’t. Therefore, there is only one person they can endorse. Does this mean Obama is a communist?


When was the American Communist Party strongest? During the labor movement leading up to the Great Depression. Why? Because of a wide wealth gap for one thing (which has been dwarfed now), it then waned when communism spread and McCarthyism came about. Anyone who is proud of the actions of that man should rethink their position. After all, lies and innuendo should not drive American government. But the internet? Just good old First Amendment freedom of speech…right?


It is time for us to begin acting like Americans, not blaming our problems on the pawns in our society. We should be ashamed of ourselves.


Hope you all have a great weekend!





  1. Robin Wilson said

    This is what happens when you point out that the King (government) has no clothes. It may be the truth, but was it worth it?

    • traderbill said

      It will never be worth it and the tea party will regret what it wished for…as will the rest of us.

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