Worthwhile Reading on NFP day

Okay, I know, I know, the B/D #s are applied on NSA basis, so can't be subtracted directly from SA #s, but, nonetheless, +215k in B/D when NFIB Small Business Optimism is stuck at 90 (which is lower than it had been at any point from 1980 to 2008), and small businesses still reluctant to hire, is stretching the bounds of credulity:

Non Farm Payrolls Come At -226K After Census (411K), Temporary (31K), And Birth-Death Adjustment (215K). zerohedge.

Fannie Mae's chief economist, Douglas Duncan, via Bloomberg:
"Temporary tax credits change behavior temporarily; it’s simply shifted demand forward. It actually created some price appreciation that’s not supportable long term,” Duncan said of the tax credit.

Why its not a normal recovery. Comstock Partners.

The data cited here cover the major indicators of economic activity, and they paint a picture of an economy that has moved up, but only from extremely depressed numbers to a point where they are less depressed. And keep in mind that this is the result of the most massive monetary and fiscal stimulus ever applied to a major economy. In our view the ability of the economy to undergo a sustained recovery without continued massive help is still questionable, and the data discussed in this comment doesn't even include the fiscal problems of the states, the deteriorating federal fiscal outlook, sovereign debt problems subject to potential global contagion, the Chinese housing bubble and the increased threat of beggar-thy-neighbor nationalistic economic policies. At current levels the stock market is substantially
overvalued and subject to severe downside risk.

Richard Russell as of June 3, 2010 on phases of a bear market:

1) The first phase is the one where the bear market wipes out the optimism and excitement which existed at the preceding bull market’s top. I believe we are in the first phase of the bear market now.

2) The second phase of a bear market is usually the longest phase. This is the phase where it gradually dawns on stock holders that business is deteriorating and that we are moving into hard times. I believe we are now close to the second phase.

3) The third phase of a bear market is the “throw ‘em in” phase where stocks are sold for no other reason than that the sellers need to raise cash.

During the latter part of the third phase, blue-chip stocks will sell “below known value,” and dividend yields on top-quality blue-chip stocks will climb above 6% or more.

Investors will turn black-bearish, and we will hear opinions such as “This is the end of capitalism,” and “The nation may not survive.” As a pure guess, I think that if or when the Dow breaks below its March 9, 2009 low of 6547.05 (and I think it will) that will mark the end of the second phase of the bear market and the start of the third phase.

U.S. Monetary Policy in the 2010s. Andy Harless.


Also, we keep getting video feeds of the oil being spilled from the bottom of the Gulf, and over the last few weeks we've repeatedly seen updated maps showing the slick in the Gulf, but only recently have we been seeing much visual press coverage of the true horror of how wildlife is being devastated.

Gulf Oil Spill Photos: Animals in Peril. Huffington Post.