Friday, December 5, 2008
Ugly Employment Report
The US shed 533,000 jobs last month and the unemployment rate hit 6.7%. This is the worst employment report I have ever witnessed and indeed the US hasn't lost jobs at this pace in over 30 years. 163,000 of the job losses came from the goods-producing industries, with manufacturing firms cutting 85,000 jobs. Construction employment was down 82,000 and the service-sector lost 370,000 jobs. If that weren't enough, the prior month was revised down from 240,000 to 320,000 job losses. Unsurprisingly, the market is unhappy with these numbers as it confirms that the current recession we are in will be incredibly painful. Hopefully, our lawmakers are paying attention and can find a way to keep the US auto industry out of Chapter 11 (unless it is a government financed pre-pack) as the loss of our manufacturing sector would be devastating.
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4 comments:
Hi K10, have you ever heard of the Plunge Protection Team (PPT)? I've heard some people talking about it on several forums but it tends to get dismissed as an urban legend. I thought i'd ask for your expert opinion on the subject?
I have heard of the PPT. I used to know an options trader and total kook who would talk about them all the time when the market rallied back from a huge decline. I thought he was crazy and dismissed the idea. I am still a cynic about the existence of the PPT. I think the market is too big for anyone to really manipulate, and I would certainly hope that our government would understand that. But, then again, you never know with the people who've been running this country of late.
I traded for the PPT in the early days. Remember the scene in Apollo 13 when the guy had to tape the sign on the console saying "don't push this button" because he wasn't thinking clearly? They stole that scene from what really happened at PPT in '87 when some kid panicked and hit "sell". Luckily, technology has advanced so their computers only have "buy" buttons now. In fact, the government fudged the inflation figures in '05 when they brought those computers on-line by claiming that you were getting more functionality for the same dollar (their famous "hedonistic quality adjustment"), which, as any five year old can tell you, is total crap in this case, since you're really getting exactly half of the functionality. Today, the feds have replaced all the PPT traders with clones of Donald Trump, Harry Macklowe, Abby Joseph Cohen, and Ian Bruce Eichner - people who never even knew "sell" was an option. They just have to pick up the phone, and the market knows which way they're going.
Reggie, if you're kidding, that was funny stuff. If you're serious, I'm officially scared.
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