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Jobs Report: Heads I Win, Tails You Lose!


QE3 embers are stoked; the labor force is not.


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

Freaky Friday arrived and on cue with the release of the payroll data. It was somewhat anti-climactic after world peace broke out yesterday, but every data point counts - or at least it used to!

The headline number - or the one the incumbents will trumpet - is the unemployment rate, which dipped from 8.3% to 8.1%. This, of course, was due to shrinkage in the labor force as folks left the labor force. And not only did the change in non-farm payrolls miss estimates (96K vs. 130K), last month was also revised lower, from 163K to 141K.

Reports like this are a reminder that there's a massive difference between a stock market rally and an economic recovery.

Be that as it may, the bulls continue to shrug and say, "What, me worry?" The more putrid the numbers, they'll argue, the more likely we'll see QE3 (which is pretty much a given anyway after Big Ben expressed "grave concern" over the US employment situation).

Heads I win, tails you lose? Perhaps - but I will tell you, after 21 years of running (after) money, this sorta sentiment scrunches my nose.

Intel (INTC), oh-by-the-way, slashed its third-quarter guidance (to $13.2 billion, plus or minus $300 million, from the previously projected range of $13.8 billion to $14.8 billion). Hey, what's a billion dollars between friends, anyway? I remember when that was actually considered to be a lot of money. Either way and as always, the reaction to news is always more important than the news itself.

As it stands and as I write, S&P and Nasdaq futures, despite Intel and the non-farm payroll miss, are flattish - and in fact, gold and silver futures rallied hard on the report (on expectations that Mr. Bernanke will again spur the herd with an infusion of liquidity). Call it a shell game, a game of chicken, or a FUBAR market, but please respect the psychological power of performance anxiety.

Case in point: My high-water mark on a YTD trading basis pretty much top-ticked when I mentioned it in an impromptu Twitter-fest two months ago(that was a first for me; I never talk about performance while a trade - or a year - is still open).

I am now well off my highs and while I still have a healthy lead on the market averages, I've been pretty anxious about the relative dip - and I don't have to answer to anyone! Put yourself in the shoes of a fund manager who is trailing the proxies, those whose job is on the line and, well, you get it. It's Schvitz City, USA.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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