Morning Report – Awaiting the jobs data 2/6/14

Vital Statistics:

Last Change Percent
S&P Futures 1748.2 4.2 0.24%
Eurostoxx Index 2975.3 12.8 0.43%
Oil (WTI) 98.62 1.2 1.27%
LIBOR 0.237 0.001 0.21%
US Dollar Index (DXY) 80.83 -0.203 -0.25%
10 Year Govt Bond Yield 2.68% 0.01%
Current Coupon Ginnie Mae TBA 105.9 0.0
Current Coupon Fannie Mae TBA 104.7 0.0
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.26
Markets are up small this morning on overseas strength. Market darling TWTR is down 20% this morning after an earnings miss #bloodbath. Initial Jobless Claims came in at 331k, slightly below expectations.
Other economic data this morning – productivity rose 3.2%, while unit labor costs fell. Challenger, Gray, and Christmas reported announced job cuts increased 11.6% in January.
Regarding obamacare, we are now getting earnings announcements from the big health insurers who are considering pulling out of markets – Aetna and Humana both made such announcements.
Tomorrow we will get the January Jobs report and find out how many people are still liberated from working.The partisan spin war on that CBO report continues… One thing to watch for is a sharp sell-off in the bond market. Emerging markets woes have been on the back burner the past couple of days, which means the bond market could be setting up for a sharp sell off on a strong number. I would highly advise against floating right now.

42 Responses

  1. First!

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  2. The Chicago way.

    Without a word of debate, the City Council on Wednesday blindly added $1.9 billion to Chicago’s mountain of debt even though aldermen have no idea how the money will be spent.

    http://www.suntimes.com/25398572-761/city-council-oks-going-19-billion-deeper-into-debt.html

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  3. Now, we should see a huge spike in unemployment as all those poor bastards who were “job-locked” can now rely on me, er, Taxpayers for their health insurance subsidies, right?

    I mean, we had to fuck up the entire health insurance industry so literally tens of millions of people could be artists and shit, right?

    If it doesn’t happen, the unemployment spike, can we call this “job-lock” more bullshit and repeal this shit sandwich? please?

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  4. If 2.5M people really leave their jobs, “Carl”, I think you can rest assured that there are more than 2.5M people looking for work, so I doubt that this potential loss of labor supply will cause a spike in unemployment.

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  5. If it doesn’t happen, the unemployment spike, can we call this “job-lock” more bullshit and repeal this shit sandwich?

    No. It’s still better than the status quo ante.

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  6. I couldn’t disagree more. The Oregon study has demonstrated that Medicaid provide no longevity increase to its recipients. The narrow networks and sky high premiums deductibles are proving nightmarish for those fortunate to work their way through a corrupted and unsafe computer systems. Further, we’ll find that more people will be uninsured than insured. What was purported to be alleviated, insuring the uninsurable, (and no, that wasn’t the actual reason, just the purported reason) could have been done without essentially destroying the private health insurance market. Ultimately we haven’t even hit the rough stuff yet with the employer mandate and all those poor souls who will be tossed into corrupt exchanges.

    It’s baffling to me how this could be seen as better than the status quo.

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    • McWing:

      It’s baffling to me how this could be seen as better than the status quo.

      I think for many people on the left the political motivations behind a policy are far more important than actual results. O-care is “better” than what came before it because of what it was intended to do, and what it actually does is of little relevance. So pointing to actual results of the policy, like the Oregon study, will just fall on deaf ears. Data can simply be ignored/dismissed because of disagreement over politics, which is the most important thing.

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  7. Been reading through some of the journalists’ tweets from the media hotels at Sochi. So far this is my favorite:

    I just washed my face with Evian, like I’m a Kardashian or something.

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  8. I couldn’t disagree more.

    I know. And that’s why we’re on opposite ends of the political spectrum.

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  9. Worth a read:

    “Verizon denies using net neutrality victory to sabotage Netflix, Amazon
    By Brian Fung
    February 5 at 1:59 pm”

    http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/05/verizon-denies-using-net-neutrality-victory-to-sabotage-netflix-amazon/

    The amusing part about this is that Verizon FiOS advertises their “Quantum” upgrade for faster speeds specifically to people who use NetFlix, etc.

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  10. “so I doubt that this potential loss of labor supply will cause a spike in unemployment.”

    Correct. Due to the way unemployment statistics are calculated, it will reduce unemployment as people leave the labor market. Cutting unemployment insurance does the same thing as “discouraged workers” cease looking for work.

    The bigger critique of CBO’s report is the one that Brent pointed out yesterday over assuming that the impact of the new employer costs will be negligible on labor demand.

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  11. How is the better? I really don’t understand this.

    This isn’t reducing job lock, this is taking taxpayers and turning them into welfare recipients. No, the jobs won’t be lost. But that CBO is estimating that less work will be done. The policy is discouraging work/labor. It’s doing so particularly at the low end of the income scale.

    By providing heavily subsidized health-insurance to people with very low income and withdrawing those subsidies as income rises, creates a disincentive for people to work, relative to what would have been the case in the absence of that act.” – Doug Elmendorf Testimony at House Committee Hearing

    That can’t be a positive. and it can’t be good for reducing income inequality if you care about that. they’re not going to move up the income latter. they’re just getting off completely. and this is “freedom” or “liberty”?

    so fewer people in the labor force paying income and payroll. just as the boomers retire and start drawing SS and Medicare?

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  12. This is really gonna piss off her kook base.

    http://www.foxnews.com/politics/2014/02/06/wendy-davis-supports-open-carry-law/

    Woder if it’ll effect her fundraising?

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  13. Worth noting:

    ” AOL is making a change in the way it distributes 401(k) matching contributions to employees because Obamacare has resulted in an “additional $7.1 million expense for us as a company,” Chairman and CEO Tim Armstrong told CNBC on Thursday, following the company’s release of better-than expected earnings and revenues.

    Starting in 2014, AOL will distribute the 50 percent company match on up to 6 percent of employees’ pre-tax income in a lump sum after the end of the year, instead of paying the benefit throughout the year as it had done previously.

    That means workers who leave AOL before Dec. 31 won’t get the year’s company match at all. ”

    http://www.cnbc.com/id/101393490

    Wonkblog’s take:

    http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/06/aol-chief-cuts-401k-benefits-blames-obamacare/#comments

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  14. Oh yeah, paying Humana half a billion dollars is DEFINITELY better than the status quo!

    http://www.forbes.com/sites/scottgottlieb/2014/02/06/obamacare-bailout-for-one-insurer-450-million-in-2014/

    Why does the left love health Insurance companies so much?

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  15. FWIW, I don’t get a match with my 401k.

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  16. Priceless!

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  17. God what a hack.

    Oh the humanity!

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  18. The latest improvements to the Washington Post comment system are pretty much a disaster. Reminds me of Windows 8 being considered an “upgrade”.

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  19. i heard on local radio that microsoft is going to stop supporting XP and bascially force an upgrade to (i think) 8. i’ve got macs at home, so i’m not up on it. i’ve got windows 7 at the office

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  20. “Letters from the unemployed.”

    completely relate to that… I was rounding the corner into candy castle and drew the candy cane card…

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  21. oh, the the SGR repeal bill is out … without offsets.

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  22. Full repeal, not just an annual punt?

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  23. physicians would receive a 0.5% annual update over five years. after that time, the rate would be locked in and a few current incentive payment programs would be consolidated. docs could earn more by meeting the criteria of the new quality/value program.

    it also a 5 percent bonus to those who receive a significant portion of their revenue from an alternative payment model or patient-centered medical home.

    it’s a repeal and replace with a transition period.

    but they didn’t include the offsets on how to pay for it.

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  24. Baucus confirmed. 96-0

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  25. Remember that article on our national debt that I linked to?

    What the truth might be, and what few politicians would dare say, is there might simply be some value in lower economic growth.

    http://www.usnews.com/news/articles/2014/02/06/the-philosophical-debate-beneath-the-obamacare-jobs-freakout

    Isn’t this what repudiation looks like?

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  26. I haven’t had a chance to read the links yet, but this is from the current PL post:

    My Post colleague Sean Sullivan makes a very good point today: For all the certainty among Republicans that the collapse of Obamacare is a certain winner for them, a very small percentage of Americans say they’ve actually been negatively impacted by the law.

    He points to a Gallup poll this week finding that only 19 percent of Americans say the law has hurt them or their family, while 64 percent say it has had no effect, and another 13 percent say it has helped.

    But who are those 19 percent?

    It turns out those telling Gallup the law has hurt them or their family are very disproportionately Republican and conservative. I asked Gallup for a breakdown of that 19 percent. The results:

    Sixty percent of those who say the law has hurt them or their families are Republicans or GOP-leaning independents. Only 23 percent are Dems or Dem-leaning independents, and another 15 percent are non-leaning independents.

    Meanwhile, there’s a strong ideological tilt here. A majority, 53 percent, of those who say the law has hurt them or their families are self-identified conservatives. Only 34 percent of them are moderates, and even fewer (10 percent) are liberals.

    It’s always possible Republicans and conservatives are disproportionately impacted by the law, but it’s also possible that some who already dislike Obamacare are more likely to tell pollsters they’ve been negatively impacted by it, perhaps because they’re inclined to blame problems they’re experiencing with the health system in general on the law. Of course, this could work the other way around: Dems and Dem-leaners could be less inclined to say they are being hurt by it.

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  27. He should’ve tried harder, then he could have been really insulting:

    The billionaire chairman of Equity Group Investments backed up fellow rich guy Tom Perkins, who set off a firestorm when he recently compared the “progressive war on the 1 percent” to Nazi anti-Semitism in a letter to the Wall Street Journal. (He later apologized for using the word “Kristallnacht” but defended the overall “message.”)

    “I guess my feeling is that he’s right,” Zell said when asked by Bloomberg’s Betty Liu how he felt about Perkins’ stance. “The 1 percent are being pummeled because it’s politically convenient to do so.”

    Zell then said the problem is that all non-rich are just jealous that they don’t have the same work ethic that the country’s wealthiest do.

    “The problem is that the world and this country should not talk about envy of the 1 percent. It should talk about emulating the 1 percent,” he said. “The 1 percent work harder. The 1 percent are much bigger factors in all forms of our society.”

    Really? What an asshole.

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  28. Hacktastic!

    The butthurt is palpable.

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  29. Why does he think immigration reform is a priority of Republicans in Congress?

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  30. This doesn’t sound like a company that is confident it has priced its exchange policies correctly; it sounds like a company that is confident it has priced its exchange policies incorrectly but is going to have most of its losses made up by the U.S. government. And if Humana — one of the country’s largest and most experienced health insurers — has priced its policies incorrectly, what are the odds that most of the other insurers have done better?

    http://mobile.bloomberg.com/news/2014-02-06/health-insurers-banking-on-government-funding.html

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  31. Like

  32. This line says a whole lot about the NYT and it’s readers.

    deep Republican refusal to embrace policies that have broad support even among some Republican allies.

    http://mobile.nytimes.com/2014/02/07/us/politics/behind-retreat-on-immigration-a-complicated-political-interplay.html?smid=tw-share&_r=0&referrer=

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  33. @Michigoose: “No. It’s still better than the status quo ante.”

    Not better, just different. Seriously, this looks like such a mess. I’m sure it will be better for some but for most I’m not just seeing it. And that doesn’t even get into the likely positive impact on longevity or health in the aggregate (likely to be zero).

    “Really? What an asshole.”

    Or just palpably stupid (regarding 1% working harder comment). Most of the 1% work hard but to suggest that wealth is directly correlative to level of work does is crazy, and demonstrably untrue (just look at anybody who has inherited wealth). Being in the right markets at the right time is important, and everybody who is in the wrong market at the wrong time thinks they are in the right market until proved wrong . . . and that’s the product of a lot of factors beyond and effort and intelligence and preparation.

    The one guarantee is you will not be wealthy if you do nothing. You will also be better off in life if you prepare and you work hard and you do the basic things (set goals, come up with plans, save money). But the 1% do not collectively work harder than the remaining 99%.

    Like

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