Snow Job

After hearing all week long how the major Northeast snowstorms in February were going to impact the non-farm payroll number, the group that compiles the data, the Bureau of Labor Statistics, flatly denied that the snowstorms materially affected their data in any meaningful way. They even issued a small note at the end of their report clarifying the situation.

What this shows is how little so-called "experts" understand the mechanics of survey data, especially one so widely distributed and followed. Some of these now-disgraced pundits were calling for job losses in the range of 150-200,000. Once again, what passes for economic knowledge and analysis in the age of instant everything is little more than 3rd grade nonsense.

When the BLS did release their report at the appointed time of 8:30 am, they showed the US losing 36,000 jobs for the month of February. Immediately, broker's phones were ringing off their hooks with orders to buy, buy, buy, and that's how the day went, as the media-driven stock markets posted one of the best gains of the year, boosting all major indices well into positive territory for the year.

Even more amusing than the 36,000 job loss being hailed as a positive development was the wild revisionism throughout the media complex. Even sites such as Yahoo Finance and briefing.com changed their outlooks during the week, lowering expectations in advance of snow-related data. Expectations went from losses of 35,000 jobs on Monday all the way to -120,000 on Thursday and Friday. Supposedly, they may have appeared smarter had they just kept their predictions alone.

As the day wore on, the 36,000 decline in employment was being laughably hailed as another sign of recovery. The inverse is probably correct in this case, however. The numbers are going nowhere or actually in reverse. With January revised downward from 20,000 to 26,000 jobs eliminated, today's figure was just more of the same, only worse. But, as Wall Street and their media playfellows insist, any economic data is cause for a party, and party they did.

Dow 10,566.20, +122.06 (1.17%)
NASDAQ 2,326.35, +34.04 (1.48%)
S&P 500 1,138.69, +15.72 (1.40%)
NYSE Composite 7,291.06, +117.99 (1.64%)

Advancers beat back decliners by a healthy margin in a broad-based advance, 5315-1253. New highs punished new lows, 804-56, a margin of magnitude not seen since late summer. Volume, however, continues to lag. Participation in the market remains subdued, a troubling sign for the permanent bulls.

NYSE Volume 4,769,908,000
NASDAQ Volume 2,309,856,750

Commodities were split, though oil continued its amazing ascent, gaining $1.57 per barrel, to $81.78, its highest level in two months. Gold added $4.40, to $1,137.50. Silver was likewise ahead by 21 cents, to $17.39.

All indices were up for the week, putting the scorecard for weekly gains and losses at 4 up and 5 down.

How the markets manage to add to their recent gains is a very good question. Mostly, smoke and mirrors, rather than reasoned analysis will lend much of the punditry to express bullish sentiments on stocks and the economy in general. Apparently, all of the issues that were causing problems, like home foreclosures, unemployment, debt destruction, unfunded liabilities and growing government deficits are now being handled by the powers that be, the very same people who caused them in the first place.

Faith, usually reserved for deities, has now been transferred to the likes of Ben Bernanke, Barney Frank and Lloyd Blankfein. At least in Blankfein's case, he admits to doing "God's work," in his own words. The others are simply liars and/or hypocrites.

The faithful are being led somewhere, though the final destination is as yet unknown. I'll make a small wager that any move to the upside could be the beginning of the mother of all sucker rallies. Stocks appear to be if not at least fairly valued, over-valued. Recovery has been priced into every equity being traded, the perfect recipe for a bear attack. It may come at any time, or months from now, but the prospects for a full, robust recovery are still clouded by bailouts, Fed intervention, and a media with marching orders to sound the "all clear" alert.