Charting Stocks

Fridays employment report was widely reported as the figure came in much weaker than expected. The street was expecting a decline of 150,000 non-farm payrolls for the month of September while the actual figure was 263,000. The official unemployment rate was pushed up by 0.01% to 9.8%. Though the unemployment rate only ticked up by 0.01%, the household survey showed a steep decline of 785,000.

The official unemployment rate would have ticked  higher had it not been for a slight data adjustment. The BLS reduced the size of the Labor Force by 571,000. Most of those 571,000 are actually unemployed workers but because they “Gave up” on looking for a job, they were not counted in the calculation. Remember that the official unemployment rate is calculated as follows:

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Chart of the Trade Weighted US dollar from 1973-2009.

The yield on 3 month treasury bills remain at lows not seen since the great depression.

G-20 commitments to reestablish  financial service regulation are in direct contradiction with deregulation requirements in the World Trade Organization’s (WTO) 1999 Financial Services Agreement.

“It is crazy that the G-20 leaders vowed to re-regulate the financial system while simultaneously undermining their ability to actually do so,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “Instead of agreeing to change WTO rules that now obligate 105 nations to continue the extreme finance deregulation policies that got us into this economic mess, the G-20 leaders called for completion of a WTO expansion that includes additional financial deregulation.”

The London summit communiqué also includes a commitment “to refrain from raising new barriers to investment or to trade in goods and services” and to “rectify promptly any such measures.”
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We’re all familiar with the now famous 2006 Wolf Blitzer interview of Michael Moore during the promotion of the film Sicko.  Blitzer attacked Moore’s film, questioning the factual accuracy of his assertions. Moore responded by savaging Wolf Blitzer’s reporting during the lead-up to the Iraq war. Moore would later post on his website all of the references which were the basis for his arguments in the film “Sicko.”

Blitzer is at it again (see video below) badgering Michael Moore about the apparent ‘Hypocrisy’ of a successful film maker who, in his new film,  challenges the “Capitalist” system which allowed for his success. Moore responded by defending his morality but stopped short of pointing out the obvious hypocrisy that is Wolf Blitzer.
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This is Rep. Alan Grayson questioning Federal Reserve General Counsel Scott Alvarez about the Fed’s market practices.

“The Federal Reserve Bank of New York trades U.S. government and select other securities with designated primary dealers, which include banks and securities broker-dealers. Weekly transaction, market share data and primary dealer lists are updated periodically. Much of the information is submitted voluntarily. The Bank expects primary dealers to submit accurate data, but the Bank itself does not audit the data.”
-NewYorkFed.org

When we wrote “Inflating a Bull Market,” we mentioned the inverse relationship between the US dollar and stock prices. In March, the US dollar peaked from overbought levels and began to decline. At the same time stocks bottomed from oversold levels and began to move up. The reason is simple – Stocks are priced in US dollars. As the dollar weakens, it takes more of them to buy stocks (or anything priced in Dollars), which causes prices to rise.

The US Dollar is now oversold and may be poised for a move-up (at least in the shorter term) which should cause the price of “things” priced in dollar to decline (Stocks, Bonds, Commodities, etc)

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It must be nice to be a huge conglomerate like General Electric. After all, you can drum up support for a meaningless war through one subsidiary (NBC/MSNBC) and then reap the financial benefits of that war through another. You can even invest in a company which has yet to turn a profit as your media network hypes up demand for that company’s IPO. How can you loose?

A123 Systems (AONE) made its public debut today and climbed 50% above the initial offering price after getting the thumbs up from NBC’s Mad Money host Jim Cramer who hailed it as the “Hottest IPO of 2009.”

Citing the the “incredible growth” in the the automotive lithium-ion battery market , Cramer pitched the stock in typical stock broker “story-telling” fashion as he touted the merits of the industry which, he says, will grow from $30 million to $74 billion in 10 years.  Though Cramer’s growth expectations for the industry may be impressive, the company is anything but.

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Morgan Stanley CEO announced that he is stepping down as CEO and will be replaced by James P Gorman.  Mack, who spent four years as the head of the prestigious investment bank, will remain with the firm as its Chairman.

James Gorman joined Morgan Stanley in early 2006 as the President and COO of the firms Global Wealth Management Group. He was recruited by Mack in an effort to turn around the firms ailing brokerage division which was seriously lagging its competitors. By 2007, the wealth management division rose to the top of the industry under his leadership. Gorman was quickly promoted to the position of Co-President of Morgan Stanley along with Walid Chammah.

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