Blue World Jobs Report Analysis November 08 2013

Posted on November 8, 2013 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

Release Site: www.bls.gov

Market Sensitivity: VERY HIGH

Management Value: VERY HIGH

Friday, November 08, 2013

Brain surgery is not rocket science to a brain surgeon©

The Good News Stops at the Headlines…again.

Yesterday I was introduced to a great phrase. In a nod to my friends at Slocum out of Minneapolis I am reporting, “The good news has a lot of hair on it.”

In a quick take on the GDP report that surprised the “experts” to the upside, the news wasn’t very good. The 2.8 percent growth came in .8 percent higher than expected, but of that .83 was inventories, so actual growth was below 2 percent. In addition, the downward trend in personal expenditures that began in 2010 continues. Those are just a couple of the lowlights.

The jobs report didn’t offer much better. The net jobs created in the private sector came in at 212,000. They are reporting 204,000 because that number includes government, which shed 8,000 jobs, so the net private sector number is actually 212,000. While not the 250,000 we need to break even, it sounds better than the low one hundreds we’ve seen lately, right? Sorry.

I hope you’re sitting down.

The civilian labor force dropped by 720,000 dragging the participation rate down a whopping .4 percent to 62.8 percent. To put this in perspective, the records on participation rate go back to 1948. This number is an all-time record low and running 10 points lower than it was at the worst of the recession. I grow so weary of the word “recovery.”

The number of those unemployed rose, and the number of those employed fell by 735,000! The math is simple – 212,000 new jobs, with 735,000 fewer people with jobs, and the number of those reported as not in the labor force soared by…wait for it…932,000.

We appear to be seeing Obamacare’s initial effect on the labor market as those involuntarily working part-time is on the rise for the past three months.

The overall workweek hours, manufacturing hours, and manufacturing overtime hours are all flat while construction’s week shortened by .2 hours.

The conclusion is becoming almost boilerplate, folks. If you invest real money and employ real people, we cannot stress caution enough. The risks are great and many. Fiscal policy is indefensible and not limited to our shores. Bond buying seems to never end, and the markets now celebrate bad fundamentals for fear the Fed will quit “stimulating.” We are not trying to make a living in rational times, and there is no evidence that anyone who could has any appetite to change it. Stay safe out there.

In addition to the print version on December 6^th I am scheduled to do live analysis on Chicago WBBM AM780 and 105.9FM’s Noon Business Hour at about 12:10pm Central. I hope you can make it.

Have a wonderful and safe Thanksgiving.

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed. The official release site should be cross referenced. The analysis represents the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on its analysis.

©Blue World Asset Managers, LTD Friday, November 08, 2013

Blue World Employment Situation Report Analysis 8-2-2013

Posted on August 2, 2013 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

Release Site: www.bls.gov

Market Sensitivity: VERY HIGH

Management Value: VERY HIGH

Friday, August 02, 2013

Brain surgery is not rocket science to a brain surgeon©

The Song That Stays the Same…

If you’ve ever watched a soap opera, dropped it and picked it up again about a year later you found you hadn’t missed much. It feels like that with this damn jobs report. We missed the June report due to the karate national championships in Greenville, SC. Just a quick shout out to Greenville. What a great town.

Hey, new jobs were created and the unemployment rate fell!! I remember the good old days when news like that signaled an improving economy. Now, as our readers know, it just means that we were on the plus side of new jobs but the number of those reporting as available to work either increased less or, as is the case for July 2013, shrank! That’s right, we added net 162k jobs in July but the civilian labor force got smaller…again. Correspondingly, the participation rate fell by .1 and those reported as not in the labor force grew by nearly a quarter of a million! Many of the job gains came from the lower end in food service and hospitality.

Some other revealing negatives showed up. Wages are down overall and in manufacturing in particular. The work week got shorter for all employees and is back to where it was in July of 2012 but the manufacturing work week has fallen below the one year ago level and overtime hours fell by .2, an unusually large move.

So, what’s new(s)? We have to start to wonder about something. We have been very critical of the use of the word “recovery” over the past many months because we have argued (and defended) a position that we are not in recovery. Trivial data like historically low participation rates, GDP below 2 percent, trendless regional fed reports, etc. tend to cast doubt on recovery assertions. After all, we have just learned that for every job created since the “end” of the recession we have added at least two people to the food stamps rolls. That has never been a sign of recovery in America and we should not accept it as such now or ever. BUT, if we were to concede a recovery by its broadest, most charitable definition we are at a point where we have to ask this. “How long does a ‘recovery’ last?” If the recession ended in 2009 as commonly reported, shouldn’t we have been talking about the recovery in the past tense by now? How many “recoveries” last four years? How many “recoveries” boast stats like these? It just doesn’t hold water, folks.

Investors, business managers and owners, we still urge caution, defensive strategies and avoidance of rose colored glasses brand optimism. It’s still very weak out there with huge uncertainty and risks internationally and domestically. Obamacare implementation is among the biggest. They are trying to deny O-care’s effect on the move toward part-time employment but just take a look at the Employed Persons at Work Part Time section near the bottom of Table A at www.bls.gov.

We hope you’ve all had a great summer and God bless all the kids returning to school. Work hard and remember, never study to “pass the test.” Always study from the point of view “could I explain this to someone else.”

See you in September.

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

©Blue World Asset Managers, LTD Friday, August 02, 2013

Blue World Employment Situation Report Analysis 12-07-2012

Posted on December 7, 2012 by blueworldadmin

Release Date: Usually the first Friday of each month

Release Site: www.bls.gov

Market Sensitivity: VERY HIGH

Management Value: VERY HIGH

Friday, December 07, 2012

Brain surgery is not rocket science to a brain surgeon©

C’mon everybody. Sing along. You know the words to this song. The economy added a net 146,000 jobs and the unemployment rate dropped to 7.7%. I admit we were unable to be even cautiously optimistic about the headline numbers due to the details in some other reports out during the month, especially regional manufacturing data and the GDP estimate. We had predicted that GDP would be revised lower but it was actually revised higher. A glimmer of optimism was squelched immediately by the detail which showed the GDP increase coming on the inventory side while the demand side slid. That indicates a data blip as opposed to the emergence of a sustainable upward trend.

November labor details tell a familiar story so here are the most illuminating. We got 146,000 new jobs but the labor force suffered a huge 350,000 worker reduction. The participation rate fell another .2% and the number of employed people fell by another 122,000. The work week remained flat for all employees and the overtime hours in manufacturing are still unchanged at 3.2 hours per week. There was some improvement in wages reported but still not enough to outpace inflation. Additionally, pay readings have been volatile and given to significant revisions over the last couple of years so we can’t put too much stock in single-month changes. College educated unemployment is still way too high but at least has been below 4% (3.8) for two months in a row. That number needs to go below 2.5% in order for any real recovery to be underway.

On the news there was a vertical spike in the S&P 500 futures but it only got back to about even on last night’s close. As the detail is digested and weak consumer sentiment numbers worked their way into the mix, the charts illustrated a retreat back toward the baseline and now (9:56a C) the S&P has gone fractionally negative while crude and corn retreat and gold is choppy and largely lateral.

So far the outcome of the election has done little to quell any of the uncertainty that has hung over the economy for the last few years. Aggression in the Middle East, continued turmoil in Europe, fiscal cliff worries, unresolved tax policy and anxiety over the implementation of Obama Care in the face of what appear to be developing new legal challenges to the Affordable Care Act maintain their grip on those we rely on to spend, invest and hire.

The markets continue their upward trend. While we have been happy to participate in the run we continue to be very cautious and we’re bringing the safety net up tighter and tighter. We have significant concerns about what seems to drive the markets these days. Government commentary, be it from our Fed or European leaders, have greater impact on market sentiment than economic and corporate fundamentals. We believe this as a driver is unsustainable and at some point market fundamentals will have to trump. When will that happen? If you had told us in 1995 that U.S. Ambassadors were being raped and murdered, Palestine had been admitted to the U.N., Iran was close to nukes, Israel was engaged in missile play, Syria was readying chemical weapons to use on its own people, North Korea was rattling its saber, the government owned private car companies, one sixth of the economy was being nationalized, there were only three banks left, GDP was under 3%, unemployment was over 7.5%, corporate profits were mixed as revenues begin to slip across the board and the markets are UP, we’d have recommended you seek professional intervention from a qualified mental health provider. Historically these conditions would drive the markets to extreme lows. Today, however, they continue to climb. We’ll ride the wave, too, but the defense is still on the field and ready to play when reality and perception align. Whatever defensive strategy you/your financial advisor employ, we think it prudent to keep it executable at very short notice.

This is our final jobs analysis to post for 2012. Thanks so much for reading and commenting. God bless you and your families. Have a very Merry Christmas and a Happy New Year. We’ll see ya on the other side.

GO IRISH!!

Release Site: www.bls.gov

Messin’ with Markets is More Dangerous than Messin’ with Sasquatch!

Posted on September 13, 2012 by blueworldadmin

Thursday, September 13, 2012

Messin’ with Markets is More Dangerous than Messin’ with Sasquatch!

Time to Roll Up a Newspaper and Smack the Market “Experts” on the Nose!

GDP is below 2%. Claims for unemployment benefits are up and get revised higher every week. A record number of Americans are on government assistance. Social Security and Disability benefits hit record highs with a full month left in the fiscal year. Consumer comfort, confidence and sentiment are low and falling. Investor confidence is weak. Manufacturing is contracting. The Eurozone is on the brink of financial collapse. Our national debt is over $16 Trillion. Foreclosures are high and rising. Terrorists are attacking U.S. Embassies around the world and murdering Americans. And unemployment is over 8%…for over 40 months…yet, somehow, the Dow is up over 200 points on 9/13/2012 because the Fed announced QE3?

It should be of tremendous concern to everyone who has investments in the public markets that market performance has become SO dependent on government action. Do you realize that the actions contemplated by governments have become more important to the public markets than business fundamentals? Governments don’t even have to do anything. All they have to do is hint that they might do something, and the markets go crazy. It may be a suggestion that the Europeans may bail out Greece, or it may be the U.S. Fed announcing a new round of stimulus, as is the case today.

Let us explain what Quantitative Easing is in simple terms, then decide if you want your investment nest egg tied to more of it. In its simplest terms it is trading short term debt for long term debt. It is the proverbial kick-the-can-down-the-road exercise. The Fed uses our money (tax receipts) to buy back short term bonds (loans to the government) and refinance them for a longer term. The massive buy-back causes a drop in interest rates that is expected to stimulate the economy. It is the exact opposite of what they do during boom times when they think the economy is “overheating” and they want to avoid inflation by artificially raising the interest rates to slow things down.

Folks, we’re telling ya, messin’ with markets is more dangerous than messin’ with Sasquatch! At some point this will have to revert to being about economic fundamentals. When it does we recommend having the A-Team defense on the field or watch from the stands because it could be a catastrophe.

We can’t understand the exuberance at any level BECAUSE IT DOESN’T WORK, but we would think that the “experts” who get so giddy about such stupid and detrimental policies would have a learning curve that breaks off 180° somewhere. After all, we have plenty of evidence that these measures don’t work in the face of the current economic environment. You know what they say about the definition of insanity being the duplication of effort over and over yet expecting different results? O.K. the “experts” are not just morons, they’re insane.

For those of you wondering how we can make such assertions regarding the ineffectiveness of prior actions rendering the current ones “insane”…

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed. Referenced sources should be reviewed. Any analysis represents the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on its analysis.

<> Quick Post – …but we object to water boarding

Posted on September 12, 2012 by blueworldadmin

We felt compelled to comment on the events surrounding the Embassy attacks and the U.S. response.

The first and most important question we asked was “of the people who were terrorized, injured and killed, which of them had anything to do with the “offending” video?

Next, How can our gov’t have the audacity to suggest that free speech is a “global right?” Ask anyone from those countries if they have a “right” to free speech.

if “free speech” is a “global right” how could it possibly be ABUSED? This is The UNITED STATES of AMERICA GOVERNMENT”S response to INNOCENT AMERICANS being murdered and DRAGGED THROUGH THE STREETS a la Black Hawk Down in the Bakara Market? Oh, yes, it gets worse.

It terrifies us that the U.S. response was to condemn the video maker(s) first during a statement that was overall apologetic to the terrorists (whom OUR government has chosen to label “protesters”). Protestors are what we find screwing up traffic in Chicago. TERRORISTS are what we find storming embassies and murdering innocent people!

They dragged a U.S. citizen’s dead body through the street. As the government couldn’t get the photos down fast enough it is reported that Hillary Clinton (Just now repeated by President Obama) claimed that they were dragging the dead body to the hospital. http://ht.ly/dELhk Why would anyone photograph a living man being “dragged” to safety. This is insulting and terrifying.

This story is moving fast but we had to comment on the early reports and responses. Now, Michelle, you may legitimately be un-proud of your country!