Juggling Dynamite

This is a disturbing article on the watering down of organic into “natural” food marketing. Read your package ingredients carefully no matter what the advertising says.  The strongest vote we consumers can make is with our dollars and the products and producers we choose to support.

“In the wake of a 12-year battle to keep Monsanto’s Genetically Engineered (GE) crops from contaminating the nation’s 25,000 organic farms and ranches, America’s organic consumers and producers are facing betrayal. A self-appointed cabal of the Organic Elite, spearheaded by Whole Foods Market, Organic Valley, and Stonyfield Farm, has decided it’s time to surrender to Monsanto. Top executives from these companies have publicly admitted that they no longer oppose the mass commercialization of GE crops, such as Monsanto’s controversial Roundup Ready alfalfa, and are prepared to sit down and cut a deal for “coexistence” with Monsanto and USDA biotech cheerleader Tom Vilsack.”

See the whole article here.

Most global strategists and economists are begrudgingly forecasting a short, mild 2012 recession for Europe. But with fiscal crisis, bad debts and austerity sweeping the lands, surely short and mild could prove wildly optimistic.

This week the IMF considers the impacts of a potentially longer, deeper recession in Europe and the US, and the dramatic (in my view more realistic) impact that would have on the fastest growing economies like China( not to mention commodity exporters like Canada and Australia):

China would be highly exposed through trade linkages. Europe and the United States together account for nearly half of China’s total exports. Lower global demand would, therefore, feed back negatively to corporate and financial sector balance sheets, hampering the performance of firms in the tradable sector (where excess capacity is already prevalent), increasing NPLs, and potentially prompting banks to deleverage. This would further reduce investment, employment and growth and could trigger a decline in China’s property market. In the absence of a domestic policy response, China’s growth could decline by as much as 4 percentage points relative to the baseline projections leading to broad-based consumer and asset price deflation. China’s vulnerability to external shocks was highlighted in the global financial crisis, when global growth fell by around 61⁄2 percent. In China, even after a huge credit and fiscal stimulus response, which boosted growth by at least 6 percentage points, growth still fell by 5 percentage points.

See the IMF report: China Economic Outlook Feb 6, 2012

Trimtabs’ Charles Biderman on the suspicious jobs report that encouraged risk traders on Friday.

“The biggest headline for all financial media today is that the US economy added a much more than expected 243,000 jobs in January, and 446,000 jobs over the past two months. That is many more new jobs than our estimate of less than 50,000 for January and our estimate of 90,000 for December and January…

The BLS each month reports two data series, but only one jobs number is reported by the media. Actual jobs outstanding, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments – made at the sole discretion of the Bureau of Labor Statistics economists that 2.9 million less jobs gets translated into 446,000 new seasonally adjusted jobs for January and December.

No one I know has any idea as to how the BLS does this seasonal adjustment. BLS historic data is changed almost every month until the income tax returns for each year are available three years in arrears. In other words, the BLS currently has accurate data for 2008 and before.

I keep repeating that the BLS refuses to use the data embedded in income tax collections to be able to report real time jobs and wages. Why does it refuse? Could the reason it refuses to use real time data on jobs and incomes be because perhaps this jobs number is politically motivated? The entire world is looking at US job creation as a proxy on how well Obama is doing? Could the Obama administration be pressuring its economist employees to create the best possible new jobs number?

Obviously I am quite suspicious of the numbers that I see in today’s BLS press release. Remember most financial journalists and even stock market strategists do nothing more than rewrite government press releases. So do not expect very few others to question the good news.

For those of you who care, look at Table B-1, Total Nonfarm Employment in today’s BLS press release attached… [click to see it here] Start with the non seasonally adjusted table that shows that in November 2011, there were 133.172 million actual jobs. Actual jobs dropped by 220,000 jobs in December and actual jobs dropped an additional 2.7 million in January. Only as a result of unknown seasonal adjustments, could the BLS report 243,000 new hires in January.”

Here is the direct link to the clip.