The barkeeper on Shrub and economy problems.
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August 6, 2004
Billmon: Murphy´s Law
Comments
Well, if Katherine Harris and the unknown White House leaker feel free to share ‘homeland security’ information with all and sundry, I suppose it comes as no surprise that the public’s economic information might be farmed out the right group of friends.
Posted by: Citizen | Aug 6 2004 5:13 utc | 1
…the fighting (which included the downing of a Marine helicopter) just reminded the market that the quagmire in Iraq hasn’t gone away, even if Paul Bremer and the Coalition Provisional Authority have.
now if only the rest of the US would get a clue…
Posted by: æ | Aug 6 2004 6:26 utc | 2
Just to be nit-picky, I think Billmon got his laws mixed up.
In a way, Shrub’s become a test case for Hobson’s Law: When it says that everything that can go wrong will, does it really mean everything?
Actually, it’s Murphy’s Law which states that if anything can go wrong, it will.
Now, there is a Hobson’s Choice, which is a situation where the choice is really no choice at all (usually because the alternatives are equally awful). I think that’s what short-circuited with Murphy to create that title.
Nice to know I’m not the only one afflicted with brain-farts.
(And there is actually a Hobson’s Law, but it has to do with calculating metal fatigue. Maybe there’s a sociological equivalent for “truth fatigue”, when it’s been bent out of shape once too often.)
Posted by: prof fate | Aug 6 2004 6:49 utc | 3
Insider forcasting?
What will they think of next?
How ’bout leaks on how elections are gonna turn out?
They wouldn’t stoop to something like that would they?
Naaaaah, never!
After all Kathleen Harris is nothing but a loose cannon, right?
Posted by: RossK | Aug 6 2004 7:20 utc | 4
The SEC and the New York Stock Exchange both closely monitor daily trading to detect patterns that suggest insider trading (that’s how they were able to debunk the story that there had been suspicious trading activity in the airline stocks in the days leading up to 9/11).
So there was no insider trading before 9/11?
I found this report:
Part of the answer is tucked away in a footnote on page 499 of the 9/11 Commission Report. The commissioners, basing their findings upon exhaustive research of millions of transactions by the Securities and Exchange Commission, note that “some unusual trading did in fact occur, but each such trade proved to have an innocuous explanation.” Moreover, “the trading had no connection with 9/11.” So what happened? “A single U.S.-based institutional investor with no conceivable ties to al Qaeda purchased 95 percent of the UAL puts on September 6.” This same institution, as part of a complex trading strategy, also purchased 115,000 shares of AMR on September 10. But what about the spike in AMR puts trading on September 10? It turns out that a “U.S.-based options trading newsletter, faxed to its subscribers on Sunday, September 9…recommended these trades.” Readers jumped in headfirst come Monday morning, only to strike it tragically lucky the next day.
http://nationalreview.com/rose/rose200407260700.asp
So we believe this explanation, Billmon?
Posted by: french speaker | Aug 6 2004 8:35 utc | 5
Yeah, I was surprised by that, too. The insider trading before 9/11 seems so far to be the main “conspiracy theory” stuff that hasn’t really be contested so far.
Posted by: CluelessJoe | Aug 6 2004 10:29 utc | 6
Companies appear to be doing a lot of capital spending and inventory building, which suggests they’re still confident about the health of the expansion.
perhaps it’s not so much “confidence about the health of the expansion” but worries that the price of oil could shot thru the roof one of these days ?
could some people be building up inventories to at least dampen the short-term effects of, say, a $10/barrel jump in oil price if something nasty happens ? i mean nasty like in israel really, really bombing irans nuke infrastructure.
one question to the other patrons: some time ago i read that at about $50/barrel the US economy would go bankrupt. any comment ?
Posted by: name | Aug 6 2004 11:26 utc | 7
U.S. payrolls up 32,000 in July ; unemployment rate down to 5.5%. Details coming.
The breaking news on CNN.com – lets wait a while – the details will show what happened and then the view is usually worse.
Posted by: b | Aug 6 2004 12:34 utc | 8
Now CNN says Job growth shock – July payroll growth far shy of Wall Street forecasts; unemployment rate slips to 5.5%.
Hmm – this sounds a little different than the breaking news 30 minutes ago.
Hiring by U.S. employers slowed significantly in July, according to a government report Friday, as the number of new jobs added to payrolls came in far below Wall Street expectations.
The Labor Department report showed only 32,000 new net jobs added to payrolls during the month, down from a revised 78,000 jobs that were added in June. The increase was the smallest since December.
Economists surveyed by Briefing.com forecast a 243,000 gain in jobs, and the unemployment rate staying unchanged at 5.6 percent, while economists surveyed by Reuters had a median jobs growth forecast of 228,000, with a range of estimates between 200,000 and 300,000.
Posted by: b | Aug 6 2004 13:10 utc | 9
“i read that at about $50/barrel the US economy would go bankrupt”
I really doubt it. Whatever, we’ll know it in 6 months.
Posted by: CluelessJoe | Aug 6 2004 13:35 utc | 10
From the Yahoo story Job Growth Meager, Markets Stunned
“I find this number stunning,” said Stephen Stanley, chief economist at RBS Greenwich Capital. “I think the Fed will raise rates on Aug. 10 but this puts everything else into play.”
In my own inane way I’ve been following short term corporate bonds the last few months.
I’ve no overall numbers to offer up. Just a sense that that market seems to be anticpating that the Fed will NOT raise rates.
Which is to say… I believe the economy is tanking. It was fragile to begin with and the price of gasoline has exposed the fragility.
Here is an ancillary thought:
Historians may write that Chinese and the Subcontinent demand for oil doomed Bush’s reelection efforts. Which would be a pretty interesting bit of a karma for an oil aristocrat.
Posted by: koreyel | Aug 6 2004 15:34 utc | 11
Billmon really nailed it with the bad jobs prediction based on the market jitters yesterday….
So, who knew?
And even more curious, perhaps….what’s with all this re-adjustment of previous months’ jobs numbers downward? (from Atrios)
Has every stinking thing within this administration’s tentacleular reach become politicized? Will weather reports soon be ‘re-adjusted’ so as to inform you that everything is just fine and sunny while a hurricane rages outside your window?
Posted by: RossK | Aug 6 2004 16:52 utc | 12
Will weather reports soon be ‘re-adjusted’ so as to inform you that everything is just fine and sunny while a hurricane rages outside your window?
Posted by: RossK | August 6, 2004 12:52 PM
LOL, Ross. I wouldn’t doubt it.
Posted by: Pat | Aug 6 2004 16:58 utc | 13
slightly OT
Bill Gross manages $100 billion (with b) in bonds and treasuries for Pimco. His recent monthly piece on hedge funds is a gem for people interested in financials. Lemonade for Sale
On a broader perspective, the growing fascination with hedge funds and indeed the ability to lever almost any asset at minimal borrowing costs which was the heretofore province of strongly regulated banks, promises excessive speculation that inevitably will follow the financial metronome’s pendulum towards greed then back to fear, producing a number of near certain bubble poppings in the process. America’s and, therefore increasingly, the world’s economy is unstably founded on a base of cheap money used as leverage to support certain asset prices of dubious value. If and when the cost of those funds moves sharply higher for any reason – a dollar crisis, inflation, foreign central bank sales of Treasuries, increasing budget deficits, to name a few – then the flaws of a levered economy will be quickly exposed.
Lets hope this happens before the election on Bushs watch. Today was -maybe- a start for the unraveling waiting to happen.
Posted by: b | Aug 6 2004 18:18 utc | 14
Thanks b, very insightful link–
Would only add that I’m not sure that it is an unraveling that is ‘waiting’ to happen. Instead, I would suggest that it has been ‘engineered’.
In the words of Disco Effin Dick…
“Reagan proved it, deficits don’t matter.”
Posted by: RossK | Aug 6 2004 18:37 utc | 15
RossK- yes, I also want to know who bailed yesterday, and, for that matter, what institutional investor bought those put options.
and who the person working for each of those places is who did the transactions.
how does Jane and Joe Q. Public find out these things? Or is that for the SEC to know and for us to never find out?
btw, the jobs growth figures, like the lies about the cost of the pharma med program, and like the lies about the benefits of tax cuts are more examples of the Bushista’s total contempt for the people of this country.
not to mention their war profiteering, their failure to hold people accountable for issues of national security, their failure to adjust their economic policies (which Reagan did do, btw, by raising taxes) in the face of evidence of failure, and at great threat to our nation at this time when there are two war fronts (so far) to fund and fuel…
but Bush’s crony crook buddies are making out like the thieves they are.
and in the meantime, prisoners in Iraq were so ill-supplied they had to wear women’s underwear on their heads, according to statements reported on CNN in regard to the England trial.
Prison is where the entire Bush junta belongs, included Jeb and Poppy.
Posted by: fauxreal | Aug 6 2004 19:04 utc | 16
@fauxreal
Prison is where the entire Bush junta belongs, included Jeb and Poppy.
Hell, let’s unearth the corpse of Prescott, that degenrate Nazi-finacing, eugenics-promting, dynasty-founding prick, and throw it in there with ’em.
Posted by: æ | Aug 6 2004 19:21 utc | 17
Fauxreal wrote:
“not to mention their war profiteering, their failure to hold people accountable for issues of national security, their failure to adjust their economic policies (which Reagan did do, btw, by raising taxes) in the face of evidence of failure, and at great threat to our nation at this time when there are two war fronts (so far) to fund and fuel…”
‘Failure’ is the key word here.
It seems that everything GWB has ever done has been a failure. *Why* is he still the president???
Every Republican Senator and House Representative should be thrown out on their ear in November.
Posted by: Anonymous | Aug 6 2004 22:47 utc | 18
Prescott’s body doesn’t deserve to be in jail. It deserves to be dissolved in an acid bath.
Posted by: Clueless Joe | Aug 6 2004 22:57 utc | 19