Gary Dorsch, editor of Global Money Trends magazine, sums up the “important” jobs news released last Friday….

…And 14-months after losing 763,000-jobs in January 2009, US-payrolls, a key driver for the bond and stock markets, rose in March for only the third time since recession struck in late 2007 as the private sector stepped up hiring at the fastest pace in almost three years. Employers added 162,000 jobs last month, leaving the U-3 unemployment rate steady at 9.7% for the third straight month. About 48,000 temporary workers for the decennial census were hired last month, while private payrolls jumped 123,000, the highest since May 2007. Private payrolls rose 8,000 in February, the Labor apparatchiks reported.

Despite the sharp turnaround in employment last month, weaknesses still remain. A broader measure of unemployment, the U-6 jobless rate, that includes the number of workers marginally attached to the labor force and those working part time rather than full-time, edged up to 16.9% from 16.8% in February. What’s hidden from the masses however, is that the new jobs created pay about 25% less than those that were previously wiped-out, and in many cases, benefits have been dropped.

So, as usual, ‘all hail the headline number, ignore reality and push the equity markets higher’ is the chorus of today.  In the midst of all this job creating excitement should I even bother publishing stories that offer perspective?…

Commercial bankruptcies increase – WSJ WSJ reports the total number of companies filing for bankruptcy in the U.S. jumped by more than 20% in March over the previous month, as business failures in the first quarter outpaced last year’s total. The total number of commercial bankruptcy filings hit 8,208 in March, a sharp rise from February’s total of 6,655, according to new data from Automated Access to Court Electronic Records. March’s total brings the total number of commercial bankruptcies to 21,453 so far this year, almost 1,000 more than the total for the first quarter of 2009, a breakout year for business filings. Jack Williams, a bankruptcy law professor at Georgia State University, said he expects the rising trend to continue through the second quarter despite signs of an improving economy. “There’s no indication whatsoever that the trend is slowing,” Mr. Williams said. “The pace is picking up…and that was off of what was a major filing year in 2009.”

Office vacancy rate hits 16-year high – Reuters Reuters reports U.S. office vacancy rate in the first quarter reached its highest level in 16 years, but the decline in rents eased and crept closer to stabilization, according to a report by real estate research firm Reis Inc. The U.S. office vacancy rate rose to 17.2%, a level unseen since 1994, as the market lost about 11.6 mln net square feet of occupied space during the first quarter, according to the report released on Monday. The U.S. vacancy rate inched up 0.2% from a quarter earlier and was 2% higher than a year ago…The U.S. office vacancy rate hit a cyclical low of 12.5% in the third quarter 2007. Rental rates fell an average of 0.8% in the first quarter, a less steep decline that seen last year. Asking rent fell 4.2% from a year earlier. Factoring months of free rent and landlord contributions to space improvements for each tenant, effective rent was down 7.4% from a year earlier.

…Unfortunately, I find it impossible to create a disingenuous post. As the bandwagon rolls by the desire to jump aboard, at times, can be overwhelming.  However, I have dedicated my missives to “keeping it real” and I will continue to do so no matter how obstreperous the chorus.

Tags: commercial bankruptcies, commercial real estate, jobs, office vacancy, rent, unemloyment, US payrolls

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The volatility of precious metals prices will continue to astound. For those requiring a courage boost, I offer the following information as succor…

The Precious Metals market is minuscule - Matterhorn Asset Management
The graph below shows how small the gold and silver industries and markets are in relation to major US corporations and to total world financial assets. The market capitalisation of the silver industry is only $ 9 billion and of the gold industry $ 200 B whilst Microsoft is valued at $250 B and Exxon 350 B.

Both the silver and gold industries as well as the physical markets are so small that any increase in demand is likely to drive prices very substantially higher.

Zerohedge further exposes the BLS Friday jobs report as a worthless…

Even as the BLS and the administration are trying to cover up the real state of unemployment affairs using assorted semantic gimmicks of just what it means to be unemployed, and as companies provide adjusted EPS numbers, while actual earnings continue to collapse, the true barometer of spending, provided by the Financial Management Service, tax withholdings (net of refunds), continues to paint the truest picture of just what is really happening with both America’s consumer and the corporate world….

…On a rolling 12 month basis, individual tax withheld has dropped by nearly 8% YoY, from $1.42 trillion to $1.31 trillion, while company witholdings are down a whalloping 64%, from $274 billion to just under $100 billion! Read More…

Of course, the Obama administration is aware of the true nature of the unemployment problem…

WASHINGTON – President Barack Obama called for a major new burst of federal spending Tuesday, perhaps $150 billion or more, aiming to jolt the wobbly economy into a stronger recovery and reduce painfully persistent double-digit unemployment. Read More…

Geithner said to be seeking TARP extension until next October -

Bloomberg.com reports Treasury Secretary Timothy Geithner plans to tell Congress that the Obama administration will extend the $700 billion financial-rescue program until next October, according to people familiar with the matter. While the Troubled Asset Relief Program expires on Dec. 31, Geithner can extend it by notifying Congress. A letter notifying Congress of the extension could come as soon as today, said the people, who declined to be identified. Andrew Williams, a Treasury Department spokesman, declined to comment. The TARP, passed in October 2008 to prevent a collapse of the financial system, has drawn criticism from Congressional opponents of taxpayer-funded bailouts of banks including Citigroup Inc. The Obama administration, preparing the ground for an extension, has emphasized that the program may also be used to aid homeowners and small companies.

Both actions above are US$ bearish, precious metals bullish. Add to the mix the recent zero-rate U.S. Treasury auction and you can see why our Gold and Silver investment thesis remains intact…

U.S. Treasury zero-rate auction matches record low
WASHINGTON, Dec 8 (Reuters) – The 0.000 percent high yield on the U.S. Treasury’s four-week bill auction on Tuesday matches the lowest on record for the security, the Treasury’s Bureau of the Public Debt said.

The Treasury’s auction of $29 billion in four-week bills at a strong 5.33 bid-to-cover ratio marks only the fourth time that the security was sold at a zero rate. The other three zero-rate auctions occurred in December 2008, near the height of the financial crisis.

Tags: Geithner, gold, jobs, obama, precious metals, silver, U.S. treasury, US$

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Positive developments in the credit markets continue to lead the equity markets higher…

Liquidation of CDOs aids banks - FT
FT reports billions of dollars’ worth of the complex securities at the heart of the financial crisis are being liquidated, enabling banks, insurance companies and other investors to clear toxic assets from their books.

Market participants say the unwinding is occurring in the market for collateralized debt obligations (CDOs). Hundreds of billions of dollars of CDOs have defaulted, but the structures can only be liquidated if the underlying collateral can be sold. In recent weeks, more investors have been buying the underlying assets at deep discounts, leading to increased trade and boosting prices for some existing CDOs.

“There has been a significant increase in the amount of CDO liquidations,” said Vishwanath Tirupattur, analyst at Morgan Stanley. “The rally across asset classes has given investors an incentive to liquidate.” The recent rally has been particularly marked for CDOs backed by corporate bonds and loans. Of the more than $500 bln of CDOs backed by asset-backed securities sold in the boom years, $350 bln have already experienced an “event of default”.

The Fed meets today and will make a statement about monetary policy. Many pundits on TV are suggesting that the Fed may begin to outline the exit strategy for monetary easing. However, I would humbly suggest that if the Fed is aware of the following three stories (these being the tip of the proverbial iceberg) then there will be no meaningful change to the Fed’s monetary stance.

Of course, if there is no change in the epic fiat money proliferation by the Fed then we would expect a continuation of the current inflation rally in assets. Please remember, inflation is currency event not an economic event. For more thoughts on this matter please see the Sept. 17th post.

Holiday jobs look scarce as pessimism grips retail - WSJ WSJ reports nearly half the nation’s 25 biggest retail chains expect to hire fewer holiday workers this season than they did last year, another sign that retailers aren’t counting on recession-strained shoppers to relax the tight grip on their pocketbooks this year. About 40% of stores surveyed across a broad swath of retailing told the Hay Group, a human resources consulting co, that they expect to hire between 5% and 25% fewer temporary workers this year than last, when the recession forced many retailers to trim staff in response to falling sales. That’s a grimmer outlook than the Hay survey found a year ago, when 29% of retailers said they would be slashing their holiday workforce. “Our staffing levels will likely be down slightly,” said an American Eagle (AEO) spokeswoman. “We’ve been focused on creating high levels of efficiency.”

U.S. mortgage delinquencies set record – Reuters.com

Reuters.com reports high U.S. unemployment keeps pushing up the rate of mortgage delinquencies, which could in turn drive personal bankruptcies and home foreclosures, monthly data from the Equifax credit bureau showed.

Among U.S. homeowners with mortgages, a record 7.58% were at least 30 days late on payments in August, up from 7.32% in July, according to the data obtained exclusively by Reuters. August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace.

By comparison, 4.89% of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44%, Equifax data showed. The rate of subprime mortgage delinquencies now tops 41%, up from about 39% in each of the prior five months. The results, which correlate with consumer bankruptcy filings, suggest U.S. homeowners remain under financial stress despite signs of improving sentiment and fundamentals in the U.S. housing market. August bankruptcy filings were up 32% from a year earlier, compared with a 35% year-over-year increase in July.

Delayed foreclosures stalk market - WSJ

WSJ reports legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress. While that buys time for families to work out their problems, some analysts believe the delays are prolonging the mortgage crisis and creating a growing “shadow” inventory of pent-up supply that will eventually hit the market.

The size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market. “There’s going to be a flood [of bank-owned homes] listed for sale at some point,” says John Burns, a real-estate consultant based in Irvine, Calif. When that happens, Mr. Burns believes, home prices will fall further, particularly in markets with large numbers of foreclosures. Overall, he expects home prices to decline 6% next year.

Tags: cdo, jobs

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It looks like the market for `financial dream jobs´ may have actually perked up amidst the financial turmoil of the past few months. 

Investment managers saw a 22% increase in job offers as rival firms take advantage of the increasing number of financial services workers looking for a job by “snapping up the cream of the crop on much less than they would have been able to 6 months ago,” according to Powerchex Limited.

Hedge fund and insurance companies also made more employment offers than 6 months ago as those companies who have been able to remain stable through the turmoil prepare to put themselves at the head of the pack to take advantage of any economic recovery.

Here is another site I came across, it looks pretty new, but I’ll keep tabs on it through this blog as I think it has potential: www.hedgemyjob.com.

Tags: employment, fund, get a job, hedge, hedge fund, jobs, jobs financial

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