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Monthly Archives: October 2012

Party on the Jobs Report!

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The news was electrifying just one month before the election.  Unemployment rate down to 7.8%!  Decent gains in employment all around!  After an August report so dismal it spurred the Fed into action with an open-ended round of mortgage buying, QE3, how could September’s come in so strong?

The answer is obvious to longtime readers of Barataria, since it was called when the August report came out.  We’re seeing fluctuations caused by sketchy methods of calculating the state of jobs, a small number found by subtracting a big number from another big number.  Indeed, the best part of the gain came from adjusting July and August up by 89k jobs total.

Underneath the big story is a much bigger story that is going unreported through this gradual turnaround.  We are witnessing the printing of a strong bottom, a floor in the overall employment picture where we are roughly treading water.  What makes this possible, and hard to report, is the net gain of jobs in unexpected places that the traditional survey is having a lot of trouble finding.

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Dodd-Frank, a Non-Issue

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The first presidential debate went over a lot of topics – taxes, Medicare, budgets – that were very much worth spending a lot of time on.  But one of the things that came up far more than I ever thought possible was the Dodd-Frank Act, aka the Wall Street Reform and Consumer Protection Act of 2010.  Mitt Romney called it “the biggest kiss to New York banks I’ve ever seen.”  He went on at some length about it, too, claiming “We need to get rid of that provision because it’s killing regional and small banks.”

Some of you know far more about this than I do, but this absolutely shocked me.  Dodd-Frank is really a non-issue, a half-step where a bold march forward is called for.  About half the world thinks it went too far and half thinks it didn’t go far enough, meaning it’s a rough compromise.  And, in practice, it doesn’t seem to have really changed very much.

How did this come up as an issue?  Dunno.  But I’m asking all of you to correct me if I have this wrong.

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Through the Looking Glass

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We live in an economy so through the looking glass that bad news is good news.  So what constitutes actual bad news?  Apparently, no news is potentially the worst news, although it is still shrugged off as nothing.  So perhaps it’s really bad news after all, making it good news.  It’s so hard to tell.

All we’re missing is a Mad Hatter.  Everyone, change places!

The lack of news at hand is the lawsuit against JP Morgan filed by US Attorney Eric Holder alleging a violation of the Martin Act.  That’s a somewhat obscure statute from 1921 that makes interesting lawsuits out of small violations.  The reason this isn’t news is that it wasn’t even JP Morgan, as we know them, that has a problem – it’s from the firm of Bear, Stearns that they purchased in 2008 on its way underwater.  And it involves mortgage problems that the industry supposedly corrected long ago.  The White Rabbit is a solid four years late.

Or – is it really news after all?  They picked up a lot of interesting stuff along the way, including some tidbits from Chase Manhattan Bank (aka Chased MadHatter) so is there more to come?

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A Day at the Races

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As we head into the final stretch of the election season, the presidential debates and accompanying horserace are the focus of the upcoming two weeks.  They will prove interesting, as they always do for political junkies, but they are unlikely to significantly change at this point.  They may, however, change the races further down the ballot, possibly in strange and unpredictable ways.  It’s worth some time getting to know what to look for ahead of time.

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