Sunday, November 21, 2010

Non Farm Payroll Beats Estimates

On the surface, sure, all looks well. To even talk about a double dip right now will get you banned from CNBC (which isn't a bad thing for your credibility). Before people go ahead and call mortgage gate a non issue, bank health a non issue, macro economics as rebounding, check out the headline from October 5, 2007 (yes 2007).
Nonfarm payrolls rose by 110,000 last month -- including 73,000 in the private sector -- very close to expectations of a 113,000 gain in total payrolls.
The S&P 500 highs were on October 8, 2007. What happened after that? Subprime was NOT contained. Financials having declined for 5 months were a leading indicator of the indices. The economy was not doing a goldilocks dance as Kudlow so proudly declared each night. This is all in the back drop of a weakening dollar and rising commodity prices.  Seems quite familiar to our current environment.


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