Guest Post by Michael Ashton
There was a great deal of excitement about today’s Employment Report. The S&P rallied 1.1%, erasing the month-to-date losses at a stroke. And for what? Nonfarm Payrolls were reported at 203k with a net +8k upward revision to the prior months, versus expectations for 185k. That’s a miss that is easily within the standard error. The 6-month average stayed at about 180k and the 12-month average at about 190k. The 3-month average reached 193k, but that is lower than it was in Q1 of this year so no great shakes there.
Guest Post by Doug Noland
With about three weeks to go until year-end, things are turning more interesting.
December 6 – Bloomberg (Saijel Kishan and Kelly Bit): “The $2.5 trillion hedge-fund industry, whose money managers are among the finance world’s highest paid, is headed for its worst annual performance relative to U.S. stocks since at least 2005. The funds returned 7.1% in 2013 through November… That’s 22 percentage points less than the 29.1% return of the Standard & Poor’s 500 Index, with reinvested dividends, as markets rallied to records. ‘It has been difficult for hedge funds on the short side,’ said Nick Markola, head of research at Fieldpoint Private, a $3.5 billion… private bank and wealth-advisory firm… Hedge funds, which stand to earn about $50 billion in management fees this year based on industrywide assets, are underperforming the benchmark U.S. index for the fifth year in a row … Billionaire Stan Druckenmiller, who produced annual returns averaging 30% for more than two decades, last month called the industry’s results a ‘tragedy’ and questioned why investors pay hedge-fund fees for annual gains closer to 8%.”
Now can we please start to move along to what come next? Dear Mr. Bernanke and Ms. Yellen… pretty please will you take decisive action? If not literally at this month’s FOMC, would you at least put some language in there?
PMI courtesy of ISM
By Doug Noland
Another week another record high.
“To understand the Great Depression is the Holy Grail of macroeconomics. Not only did the Depression give birth to macroeconomics as a distinct field of study, but also—to an extent that is not always fully appreciated—the experience of the 1930s continues to influence macroeconomists’ beliefs, policy recommendations, and research agendas. And, practicalities aside, finding an explanation for the worldwide economic collapse of the 1930s remains a fascinating intellectual challenge.” Ben. S Bernanke, Essays on the Great Depression, 2000
#266 had this going on for the first few pages and then proceeded to refine a solid view of the financial markets.
Talking My Book
While awaiting important turning points in the markets it makes no sense to deny current realities. We get it; the Fed is inflating, manipulating and promoting greater moral hazards down the road. NFTRH has done its share of illustrating reasons why what is happening is unsustainable and most likely, very unhealthy.
 I can think of a few others (money supply to Corp. profits to S&P 500, GDP to S&P 500, etc.) as you have seen posted repeatedly at Biiwii.com.
By Tom McClellan
November 21, 2013
A quick snapshot of the sector that is mirroring the drunken party going on in the US stock market.