Before we get into Thursday’s weekly jobless claims, I want to briefly cover a recent report that I ignored because it came out roughly as expected and didn’t affect the market in any way; however, it probably should have.
In the recent consumer credit report we read that “Consumer credit increased at an annual rate of 1-3/4 percent in October 2010.” Increasing consumer credit drives the economy forward so this was cheered all day. This headline was all that seemed to matter – details were ignored. The details, however, were rather shocking.
Student loans didn’t used to be included in the report but it is now. Perhaps it is included because of the government takeover of student loans? I’m not sure. In the report we find that a staggering amount of the “consumer credit” was in fact, student loans. Student loans increased by $31.8 billion.
Without the debt-for-life student loans, consumer credit literally collapsed. Non-revolving debt fell at a 58% annualized rate and if “credit” drives the economy, this was a horrible report for it.
Thursday’s weekly jobless claims were similar: details matter. Tyler at ZeroHedge did a nice job reporting on it and also brings up a fact that I have repeated often, that the prior week’s data is always revised to make the current data look better than it really is.
As we expected, last week's jobless claims number of 436k was upwardly revised pretty much as expected. The consensus for this week was 425k, and because a statistically meaningless 4k people less were fired the market spikes up. Of course, next week, the revision will take the number above 425k, meaning it was actually a miss, but who cares: computers continue to read just headlines and see what they like. Continuing claims came 4086k on expectations of 4237k, as the prior was also revised upward. Just under 400k people dropped off EUC and Extended Claims in the week ended Nov 20 as the 99-week cliff issue becomes ever more pronounced: these are the people who have anniversaried 2 years of claims and roll off with no further welfare state recourse. And most importantly, the seasonally unadjusted number exploded by a near record 169k, and the NSA unemployment rate jumped from 2.9% to 3.3% in one week!
In other data manipulation news, the BLS data subversion index came in as expected: 87% of initial claims announcements have been revised upward, and a whopping 96% of continuing claims. The only question we have is whether the same computers that trade the market are the same that are used to fudge the data, or is Intel profiting from two sets of 80286 purchases by the fudge monkeys at the BLS.
In the recent consumer credit report we read that “Consumer credit increased at an annual rate of 1-3/4 percent in October 2010.” Increasing consumer credit drives the economy forward so this was cheered all day. This headline was all that seemed to matter – details were ignored. The details, however, were rather shocking.
Student loans didn’t used to be included in the report but it is now. Perhaps it is included because of the government takeover of student loans? I’m not sure. In the report we find that a staggering amount of the “consumer credit” was in fact, student loans. Student loans increased by $31.8 billion.
Without the debt-for-life student loans, consumer credit literally collapsed. Non-revolving debt fell at a 58% annualized rate and if “credit” drives the economy, this was a horrible report for it.
Thursday’s weekly jobless claims were similar: details matter. Tyler at ZeroHedge did a nice job reporting on it and also brings up a fact that I have repeated often, that the prior week’s data is always revised to make the current data look better than it really is.
As we expected, last week's jobless claims number of 436k was upwardly revised pretty much as expected. The consensus for this week was 425k, and because a statistically meaningless 4k people less were fired the market spikes up. Of course, next week, the revision will take the number above 425k, meaning it was actually a miss, but who cares: computers continue to read just headlines and see what they like. Continuing claims came 4086k on expectations of 4237k, as the prior was also revised upward. Just under 400k people dropped off EUC and Extended Claims in the week ended Nov 20 as the 99-week cliff issue becomes ever more pronounced: these are the people who have anniversaried 2 years of claims and roll off with no further welfare state recourse. And most importantly, the seasonally unadjusted number exploded by a near record 169k, and the NSA unemployment rate jumped from 2.9% to 3.3% in one week!
In other data manipulation news, the BLS data subversion index came in as expected: 87% of initial claims announcements have been revised upward, and a whopping 96% of continuing claims. The only question we have is whether the same computers that trade the market are the same that are used to fudge the data, or is Intel profiting from two sets of 80286 purchases by the fudge monkeys at the BLS.
Trade Date: 12/9/10
E-Mini S&P Trades*
(before fees and commissions):
E-Mini S&P Trades*
(before fees and commissions):
- OTF buy @ 8:49am at 1227.25 = +1.50 (1 lot)
- Algorithm positions (3)
- “Reading the Tape” positions (0) …combined Secret’s, Algo, & “Reading the Tape” total… +4.50
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