Bad Employment Numbers: 39,000 New Jobs—Economists Predicted Number 3.5 Times Higher


"Crisis-Hit Banks Flooded Fed with Junk"(CNBC via Financial Times) I first wrote about the issue of collateral quality on Wednesday. The story continues, in today's Financial Times: "Banks flooded the Federal Reserve with billions of dollars in 'junk bonds' and other low-grade collateral in exchange for much-needed liquidity during the crisis, as the financial sector struggled under a crippling credit crunch, new data show". Watch for the details of just how bad that collateral really was to emerge over the next few days, as journalists and others continue to pore over the Fed's spreadsheets.

It will take some time to tease out the broader trends from the data; in the meantime, look for thought provoking anecdotes will drive the discussion. For example, the following: "Within a day of easing the collateral requirements, Credit Suisse had borrowed $1 billion from the PDCF, using it for the first of only two times, against a collateral portfolio that was made up of 91 percent equity. "

Bad Employment Numbers: 39,000 New Jobs—Economists Predicted Number 3.5 Times Higher (CNBC via Reuters) Bad Numbers: "Nonfarm payrolls rose 39,000, with private hiring gaining only 50,000, the Labor Department said. However, overall employment for September and October was revised to show 38,000 more jobs than previously estimated." The expectations were far higher: "Economists had expected payrolls to increase 140,000 last month and the unemployment rate to be unchanged at 9.6 percent." More raw data: "Employment in the goods-producing sector fell 15,000, weighed down by manufacturing payrolls which fell 13,000 and construction shedding 5,000 jobs. Employment in the private service-providing sector rose 65,000 in November, though retail hiring fell a surprising 28,100 despite expectations of a busy holiday season. The workweek was steady at 34.3 hours in November and average hourly earnings edged up 1 cent."

Oil at Two Year High.

(Reuters) The dollar is down and oil is up: "Oil prices rallied on both sides of the Atlantic on Thursday and ended at their highest levels in 25 months, as a weaker dollar prompted investors to buy riskier assets such as oil and other commodities. Oil investors also took the cue from Wall Street, which cheered upbeat U.S. data on housing and retail sales, indicating the economic recovery was getting traction and boding well for future oil demand."

Madoff Trustee Sues JPMorgman for $6.4 billion (Bloomberg) "The trustee liquidating Bernard Madoff’s former investment firm sued JPMorgan Chase & Co. for $6.4 billion over claims the bank aided and abetted the imprisoned con man’s fraud. Irving H. Picard, the lawyer appointed as trustee by a New York bankruptcy court, said in a statement that he sued JPMorgan yesterday seeking $1 billion in fees and $5.4 billion in damages." Strong assertions follow. Such as: “JPMC was at the very center of that fraud, and thoroughly complicit in it.” It keeps getting uglier.

Blackberry Getting a Facelift? (New York Times) iPhones have long been the prettiest participants in the smart phone beauty contest: Is that about to change? That may be the hope at Research in Motion, who just acquired The Astonishing Tribe, "a highly respected interface and design company, which it announced [the purchase of] in the RIM blog on Thursday." Interesting.