And away we go!
The much anticipated jobs report not only came in 10% better than expected at 110,000 new jobs but the August payroll was revised upwards from -4,000 (which caused the Fed to rush in with a rate cut) to +89,000, that’s a 2,325% adjustment folks!
As I said in last night’s wrap-up, I’m pretty sure these jobs numbers are the product of a random number generator as no human being could possibly miss by this much this consistently. The fact that we lend any credence to these reports is a total joke but the joke is on us so we may as well laugh along.
This should push us firmly into record territory despite the fact that unemployment was actually UP from 4.6% to 4.7% while average wages were up 4.1%, an inflationary indicator that could just as easily have tanked the markets on the heels of an inflationary rate cut which now looks like a massive overreaction by a Fed that is clearly (as Barry Ritholtz so aptly put it) "Wall Street’s Bitch."
Just remember when Cramer punches his "they know nothing" button that it is clearly he and every other Fed basher that knows nothing as these job numbers and wage report clearly indicate that the Fed was absolutely correct in their assessment that the economy was not in danger of slipping into a recession and that inflation should have been much more of a concern than bailing out Jim’s speculator buddies who had followed his advice all year to BUYBUYBUY anything that moved based on his "if the stock is at $80, it’s going to $100 and if the stock is at $100, it’s going to $120" premise. This is the same ridiculous bubble hype that bankrupted millions of investors in the early 90s and the Hypemiester General knows that sustaining a bubble like this requires a constant supply of new capital in order for his pals to get out at the top.
OK, that’s enough of that, time to switch off our brains and enjoy the rally!
President Bush will come on TV at 9:55 to speak about the economy, this is incredible timing as he scheduled this conference well in advance of the jobs report and didn’t schedule any such conversation following last month’s dreadful numbers so bravo to the President for his excellent sense of timing… Of the 110,000 net jobs added, 143,000 were service sector jobs – as I said on Wednesday, this is apropos as I cautioned that the whole dip was an orchestrated move by the funds to shake out retail shareholders before today’s big move and titled the post "Did You Want Fries With That Shake?" so congratulations to the 143,000 people who have earned the right to earn that minimum wage and let’s make sure that we, like our President, pretend that 32,000 high-paying construction and manufacturing jobs weren’t lost.
So Asia was up overnight with the Hang Seng grabbing back 857 points in one mighty session, almost as if they knew the US markets would take off today. The Nikkei was flat on continued dollar/yen concerns as BOJ Governor Iwata warned that the downturn in the U.S. economy from the stalled housing market and the subprime-loan tumult could hurt Japan’s economy, but not enough to force the central bank to change its outlook. Mr. Iwata said adjustments in the U.S. economy, including the housing market, would likely intensify through mid-2008. But even if the U.S. economic slowdown cuts into Japan’s exports, the drop can be made up by exports to countries such as China, India and Russia, he said. The government expects that Japanese industrial production rose 2.3% in the third quarter, after rising 0.2% in the second.
Europe is on the march this morning with strong gains across the board and we are in very bullish territory on the big chart. UK house prices fell half a point and the financial markets have tightened credit standards and will tighten further according to the ECB in a move that "most likely reflects the worsening of global credit market conditions." Still investors choose to party on. There’s nothing inherently wrong with bubbles, we loved playing with them as kids so let’s enjoy this one while we can!
GS added RIMM to their focus list so we will be selling into that excitement and I’ll have to cut this morning’s post short so we can strategize on the member board. We will certainly be covering our gains into the weekend but this should be one exciting day overall!
Have a great weekend,
– Phil
