Tag Archives: jobs report

More B.S. From The BLS Leads To A Blatant Attack On Gold & Silver

With the release of the latest BLSBS at 8:30am EST, the market interventionists were set up for a spectacular effort today. The S&P was first out of the gate, to the upside of course, and the precious metals were slammed. Ironically, the impulse triggered by the headline jobs report should have effected the stock market and the precious metals similarly.

How are 100’s of thousands of working age people leaving the labor force yet, somehow, the BLS can report hundreds of thousands of new jobs that were filled? Well, there is the “Birth/Death Model”. The Birth/Death Model, much like the Federal Reserve Note, is just made up out of thin air. A number is determined by the Bureau of Labor Statistics and then entered into the BLS report. It has nothing to do with reality. But someone forgot to tell the BLS that construction spending in June was down nearly 10% year over year from last June because the BLS reports that new construction businesses added 11,000 new jobs to the economy – an economic and statistical extreme improbability.

If there were any markets that actually moved in accordance with fundamentals, natural price discovery or anything associated with reality the S&P and Dow Jones would be moving to the downside as well. Why? Because as Dave explains in the latest Shadow of Truth, if the [equities] markets were sensing the Fed was going to raise interest rates, and if the employment report were based in reality the Fed would be forced to raise interest rates, this would be negative for those indices. But, alas, everything is rigged, so it doesn’t matter. The “market saved us again…”

A Preposterous Jobs Report And Preposterous AMZN Earnings

On a trailing twelve month quarterly basis, AMZN’s operating income growth has plunged from 30.2% in Q2 2015 to just 3.6% in Q4 2016.  This is a stunning drop in growth considering that AMZN’s stock is trading at 92x operating income and 134x net income. That’s before accounting manipulations are stripped away.

The fake news abounds.  It’s seeping from cracks in every part of the U.S. system.  It’s one of the hallmarks of a collapsing economic and social system and, even worse, the onslaught of totalitarianism.   Orwell’s vision was stunningly prophetic.  Of course, he was simply reconstituting history and warning us about the lessons which everyone seems to forget.

The latest non-farm payroll report, the data for which is compiled by the Census Bureau and manufactured into fake news by the Bureau of Labor Statistics, wants us to believe that the economy produced 227,000 jobs in January.  If you look at the “not seasonally adjusted” employment numbers, the number of people employed dropped by 1.25 million.

This is in an economy in which retail and auto sales plunged in January, which means retailers and domestic OEM’s cut back on employment – two major sources of employment in the economy.

In fact, according to the BLS fake news jobs report, “retail trade” was largest component of job “adds” in January. This is quite interesting given that retailers have been dumping employees en masse plus big box and mall anchor concepts like Macy’s are shuttering stores by the 100’s.  In short, that statistic is simply not credible nor supported by the facts. By the same token, auto manufacturers have been cutting shifts and shuttering production lines, as dealer inventories are ballooning and used car prices are plummeting, with a flood of low-mileage, well-maintained leased cars coming off lease.

The BLS is making the claim that “construction” was the 2nd largest category of job adds in January.  No way.  An apartment building and commercial real estate glut has formed. The default rate on CMBS (commercial mortgage-backed securities) is climbing as loans mature and borrowers are unable to repay or refi them – LINK.  Furthermore, the issuance of CMBS in 2016 was the lowest in the last 4 years.  If commercial r/e loans are not being sourced and therefore projects are slowing down, how can construction employment increase?

Restaurant sales are in freefall – a fact of which I have detailed meticulously in my Short Seller’s Journal – which means the standard plug used to goal-seek a specific employment number,  part-time waitresses and bartenders, is a fraud.  Moreover, with wage growth slowing down and real inflation wreaking havoc on non-discretionary expense items, it would seem highly improbable that “leisure and hospitality” would be the 3rd biggest contributor to the employment rolls.

In short, the Government employment report is once again not even remotely credible. But this should be expected.  First, the Census Bureau’s data collection apparatus not only is called into question constantly, but the CB has been caught submitting fraudulent data collection reports.  Some of the data collectors decide to take extra long lunches or visit the pot dispensaries in States where applicable and then submit fraudulent reports rather than conduct actual data collection.   Then the BLS takes the questionable data and pushes it through a seasonal adjustments and annual benchmark revision meat grinder. The data goes in as rat poison and comes out as nuclear waste.

As for Amazon…Amazon is the archetypal accounting fraud poster child.  Whether or  not you are willing to accept my analysis of their accounting practices, let ‘s look just at some surface indicators that AMZN is running off the rails to nirvana.   I wrote a comprehensive report on AMZN in which I drilled down to the core of AMZN’s highly misleading accounting practices.  The report is dated by a year but the “proof of concept” is still valid – maybe even more valid now than over the past 10 years.  I’ll send a copy to anyone who subscribes to the Short Seller’s Journal (I’ll send a copy to existing subscribers along with Sunday’s weekly issue).  You can subscribe here:  Short Seller’s Journal.

AMZN’s quarterly revenue growth rate has been slowing for several quarters.  Its revenue growth rate peaked in 2011 at 41%.   Since Q3 2015 to Q4 2016, the year over year quarterly growth rate has slowed from 30% to 24%.  This is despite the heady growth rate attributed to its cloud computing division (AWS – which I eviscerate in the AMZN report).   Operating income is worse.  Over the last 6 quarters, its year over year quarterly operating income growth has plunged from 84% to 13%. This excludes F/X effects, the application of which would make it worse.  Net income?  Forget net income.  By the time the numbers flow through AMZN’s waterfall of misleading accounting practices, the net income number is completely useless and highly manufactured.  I detail this fact in the AMZN report.

AMZN’s AWS segement (cloud computing) is highly touted by Wall Street snake-oil salesmen.  Don’t poison your view by looking at AMZN’s highly massaged and highly misleading earning presentation slide-show.  Go directly to the SEC-filed 8K/10Q, which itself is riddled with suspect accounting.

The growth of AWS has slowed considerably and will continue to do so.  Especially if Trump cuts back on Deep State funding, which is significant source of revenues for AMZN’s cloud computing services.  On a year over year quarterly revenue growth basis, AWS’ sales growth has gone from 82% in Q2 2015 to 47% in Q4 2016.  It’s been nearly cut in half.  It’s not a scale phenomenon either, as its Q4 revenues for AWS were $3.5 billion, which was just 8% of total revenues for the quarter.  I can remember when Wall St. stock jockeys were forecasting an explosion in AWS’s contribution to AMZN’s revenues and income.   But AWS sales have been running between 7% to 9.5% of total revenues since Q2 2015.  It was 8% of revenues in the latest quarter.

I will say that AWS produced 73.7% of AMZN’s operating income in Q4.  But that’s more a damnation of AMZN’s retail sales business, if anything.  With $1.255 billion in total operating income, that means AMZN generated just $329 million of operating income on $40.1 billion of retail sales.  That’s a “sweltering” 0.8% operating margin (zero point eight percent).   For comparison purposes, Walmart and Target generate an operating margin of about 5% on similar product sales.  So much for the argument that cyber-sales are more profitable than “brick and mortar.”

There’s a lot more analysis that I can present showing the misleading to fraudulent nature of AMZN’s financials, but that’s for subscribers.  Suffice it to say that the Free Cash Flow number presented by Jeff Bezos every quarter in his ridiculous slide presentation is completely fraudulent except for that fact that he discloses deep in the bowels of the AMZN 10Q – a place where Wall Street analysts never venture – that AMZN’s definition of “free cash flow” is not based on generally accepted accounting principles.

Non-Farm Payroll Headlines Are A Complete Fraud

“A lie told often enough becomes truth” – Vladimir Lenin.

The Government-programmed mass financial media gleefully reported this morning that the “jobs recovery” continues as the Government is telling us that 295,000 jobs were produced in February and the employment rate dropped to 5.5%.   Unfortunately, those headline statistics are complete Orwellian propaganda.  In fact, as I will demonstrate using the same payroll report used to derive the headline numbers, the employment situation in this country continues to get worse by the month.

The table below comes from the Bureaus of Labor Statistics actual employment report (BLS – Household Data Table A-1) – please click to enlarge:

NFP2

I’ve highlighted the most important data.   According to the Government’s own statistics, the working age population (“civilian noninstitutional population) grew by 176k in February BUT the number of people in the labor force declined 178k.   The labor force participation rate once again declined to 62.8% – a level of employment as a percent of the working age population not seen since the late 1970’s.   This is the definition of an employment depression.

According to the Government’s own numbers per the household survey above, the number of people employed increased by 95,000.  BUT the number of people “not in the labor force” increased 354,000. 

Those are the relevant numbers that need to be examined and debated.  Not the statistically manipulated garbage that the Government feeds into the media headlines. The employment situation grows worse by the day in this country.  Tens of thousands of oil industry workers have already been fired this year.   Hewlett Packard just announced 54,000 job cuts.  IBM is cutting over 100,000.  Both of those totals are for the global operations but a significant number will occur in this country.

As just one example of the Government lies embedded in the headline statistics, the BLS is reporting that construction added 29k jobs.  Yet, we found out yesterday that construction spending plunged 1.1% in January (Wall St. was expecting a .3% gain).  Retailers supposedly added 32k jobs in February.  Yet, we know that several retailers filed chapter 11 in January/February.  This list goes on.

If you have not watched it yet, this is a must-see short video by John Titus of Bailout Films which explains in detail how the monthly Government payroll report is a complete farce:  The Fed Is Blowtorching The Economy With QE.

The bottom line is that the Government’s non-farm payroll report has zero credibility.  Moreover, it grows more absurdly fraudulent by the month.