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— Kevin Jacobs 🇧🇪 🇵🇱 🇮🇹 🇪🇺 (@kevinjaybe) May 10, 2021

Interesting (to me) thought. Stimulus/unemployment checks could be being used to raise wages where legislation has failed: employers must now compete with the gummint for employees. Tin foil hat removed.

Tin foil hat?

Pretty sure that's obvious what's going on

cageybee77 said:

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Interesting (to me) thought. Stimulus/unemployment checks could be being used to raise wages where legislation has failed: employers must now compete with the gummint for employees. Tin foil hat removed.

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Yeah, that's patently obvious to me. Some govt officials have even said it.

Monday Macros

Can Unemployment Numbers Be Explained Away?...Was it a Fluke

Glad we had a scenario 3 on Friday that took in account the possibility that the street had the number wrong and that it could come in less than 500... We said that 1.47 was the first stopping point, which it was, and funny, the whole move in both 10 years and long bonds reversed and closed at higher yields than before the numbers...The fear was that with such a low number, the Fed would delay tapering talk and would put rate rises further out... That did not sit well with holders of the long end as the inflation risks increased , with 10 year break-evens soaring above 2.50.

The number....Yellen was in the press room answering questions on the number where she said that the increased unemployment premiums did not kept workers away from jobs...We watched David Westin interview Larry Summers on Friday, where Summers, a former Treasury secretary, threw Yellen under the bus...clearly the extended unemployment premiums are keeping workers away... 5 state are now reducing premiums and we expect other states to join in... Bank America put a number on the table saying if you make less than 32000 a year, it pays for you to sit home... At 15 dollars an hour that is 30000 a year, so many of the restaurant and other hospitality workers continue to decide not to work, which is not a good thing...Montana has a good idea, pay a 1200 bonus to workers to work and get them off the dole....... That is the political side... Here is the numbers side.

Years ago, when we first started in the business we sat next to Maria Ramirez, great lady... Her firm had some great stats in Barron's about the employment numbers. They claim that the Labor Department got the seasonal's all wrong... And they did not properly incorporate the pandemic changes. Specifically, the unadjusted gain in private non farm payrolls in April was 992,000, which included 884,000 service-providing jobs... But after labor adjusted these jobs they came up with the number of 218,000 and 234,000... So actually the street, whose consensus was 998,000, were pretty close, and it was the labor department that screwed it up... As for the other numbers, average hourly earnings per month, up 9% and the increase in the workweek, shows significant strength in employment, they just got the headline wrong...we think this is the reason rates ended up closing higher on the day in the long end.

Overnight 10 year treasuries got to 1.60 at 3 am and then rallied to 1.57 before starting to back off as NY comes in... The jury is out as to where treasuries are going in the short term... The range, after being broken by treasuries stops kicking in after the 3 sigma event employment number, are right back into the middle of the range... 1.64 is the number that has to be taken out to get rates higher, back to 1.47 is the rate that takes us to lower yields.. Our view is still 2% 10 years, but the timing may no longer be the June Fed meeting, it may take Jackson Hole to get there... The problem we have for that, the longer it takes, the stronger the transitory nature of the economic numbers works against that... We still see higher rates, but not sustaining higher rates..

14 Fed speakers this week but the key economic number will be Wednesday with the CPI... Current projections are for 3.6% year over year... That should get some attention... Add in the current soaring of commodity prices and the current hacked closure of the Colonial Pipeline, the mover of gasoline for the Northeast, and we are in a commodity boom inflation spike or scare...Retail sales on Friday should give us a look at revisions to last month's 9.8% number... Hard to believe the current expectation is only 1%

Supply... Negative for treasuries, but if the Japanese are going to come in we could get fireworks... 3/10/30 this week... The ranges in 10 years is above... 5 years are remaining below .78... The long end of the curve is the most vulnerable as fears are that the Fed will ignore the inflation statistics until they see employment numbers they like... The one saving grace is that corporate spreads continue to be solid and demand for credit remains strong... We expect 45 billion of new issuance this week in IG, and a good amount of HY and Junk.

Equities tend to scare us, as we see many cracks in the armor... With record highs in the Dow, Dow Transports, and S+P, the fears of "irrational exuberance" worry us... S+P dividend yields are only 1.4%, which is 18 basis through the current 10 year... Everyone seems to be long, cash positions are low and we are half way through May, where the next 6 months , in a normal times, are not great for equities... But as we said above, corporate spreads are solid...

We are in for another choppy week, where liquidity is poor, and tantrums are the norm... Algos more in charge... But we refer to Larry Summers again, when asked did Janet Yellen make a 'faux pas" on her rates comment last week, he said it could have been said better, but the reality is that the economy is strong and rates are going higher....Do not believe last weeks payroll numbers.

austinAG90 said:

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Monday Macros

Bank America put a number on the table saying if you make less than 32000 a year, it pays for you to sit home... At 15 dollars an hour that is 30000 a year, so many of the restaurant and other hospitality workers continue to decide not to work, which is not a good thing

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Just insane

PWestAg18 said:

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austinAG90 said:

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Monday Macros

Bank America put a number on the table saying if you make less than 32000 a year, it pays for you to sit home... At 15 dollars an hour that is 30000 a year, so many of the restaurant and other hospitality workers continue to decide not to work, which is not a good thing

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Just insane

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I bet the number is closer to $75,000 for a single mom of 2

The sad thing is, there are that many people who are perfectly happy being a mediocre leech

cageybee77 said:

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Interesting (to me) thought. Stimulus/unemployment checks could be being used to raise wages where legislation has failed: employers must now compete with the gummint for employees. Tin foil hat removed.

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Dems don't care about the $15/hr.

The $15/hr, UE benes, etc., it's all a tool to destroy the middle class and eventually the system (cloward-piven theory).

Wow, PLTR is really really dead right now.

McInnis 03 said:

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Wow, PLTR my portfolio is really really dead right now.

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FIFY LOL

ag94whoop said:

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McInnis 03 said:

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Wow, PLTR my portfolio will to go on is really really dead right now.

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FIFY LOL

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No, FIFY