The jobs report is the talk of the morning and it may continue into next week. We were expecting a loss of 130,000 jobs and we got a loss of 11,000 jobs. (remember what I've always said about that consensus prediction) CNBC is calling the report almost "too good to be true".
US employers cut far fewer jobs than expected last month in the best showing for the labor market since the recession began, boosting the U.S. dollar and global stock prices on hopes for a strong economic recovery.
The economy shed only 11,000 jobs in November, well below the 130,000 loss financial markets had braced for, while the unemployment rate unexpectedly dropped to 10 percent from October's 10.2 percent, a government report on Friday showed.
There is near euphoria almost everywhere but in bonds. The most exciting part is that equities are gaining along with the dollar instead of at the expense of it. Right now all three indices are up about 1.5% and climbing. The Dow has been testing and sometimes crossing 10500 for the last twenty minutes. The NASDAQ has crossed 2200 and the S&P is testing 1120.
There's no spinning this number, note to the pessimists. This was a fabulous number. This number may have even more impact politically than economically but that's for another post. The bottom line is that the jobs market is stabilizing. Now, the question is what will the recovery look like.
Keep in mind that about 150,000 people enter the job market every month. As such, that's the real number necessary to really break even. Of course, the economy has shed in the neighborhood of 6 million jobs since the end of 2007. So, we'll need a recovery of 300,000-500,000 consistently for several months before the jobs market is really beginning to recover. Still, it lost north of 700,000 jobs in February and now it's lost on 11,000 jobs and that's a very healthy sign. The unemployment rate actually fell to 10% but that's mostly the manner in which job rates are calculated.
U.S. Treasury bonds, meanwhile, are near full panic mode. The ten year U.S. Treasury is at 3.48. It was just over 3.20% earlier in the week. The three month T bill is at .04%. I don't want to call that solidly above zero but it was at a negative rate just two weeks ago. The yield spread between the two and ten year continues to tighten. It's now at 2.56%. Gold is trading back below 1200 an ounce to $1194. That's still near all time records but it's another one to watch. Oil is up over a dollar a barrel to $77.60.
Markets in Europe are up across the board. The FTSE in London is up .8%, the DAX in Germany is up 1.08%, and the Spanish index is up 1.13%. Markets in the Far East are mixed and some not open. The NIKKEI in Japan was up .45% and the Straits Time Index in Singapore was down .61%. It should be noted that they closed before our own jobs numbers were announced while the Euros are just finishing trading now.
The dollar is generally up though the Euro is showing even more strength. The dollar is weaker against the Euro by .72%, up by 1.55% against the Japanese Yen, and down by .17% against the British Pound. It's up however against other currencies like the Aussie/New Zealand dollar and the Swiss Franc and is generally showing strength.
Today is the first day that the dollar moved in the same direction as equities. I've been talking about a dollar bubble. If this continues to occur I, along with others, will have been wrong. The story of next week may be the direction of the dollar following the employment data.
Chronic unemployment isn't merely academic but rather "a struggle that cuts deep and touches people across the nation," President Obama said at a much-anticipated jobs summit Thursday where he acknowledged skepticism over the ability to produce results.
Still, the president claimed progress toward an economic recovery while saying much more work needs to be done -- even as the left wing of his party accused his administration of not doing enough to increase employment.
Obama sought fresh ideas from the 130 corporate executives, small business owners and labor leaders who attended the jobs forum. The president said the leading question of the day is "how do we get businesses to start hiring again."
After his opening remarks, the group broke into smaller study groups. Obama planned to address the entire group again at day's end.
I've said it before. Politicians hold summits, councils, and advisory committees when there's a problem they know they need to address and they have answers. Instead, politicians want the folks to think they're making every effort on this matter.
That's what's happening here. The optics on this thing, however, are horrible. In reality, it's the president's policies that are horrible. Wasn't the stimulus supposed to create jobs? Why has he been in office for nearly a year and only now getting ideas to create jobs? Wasn't job creation a top priority? Wouldn't a jobs summit have been the first thing he convened?
Of course, when things are going bad the optics are always bad on everything. The real problem is that we've spent record amounts of money and have a 10.2% unemployment rate to show for it. If he hadn't held a jobs sumit, his opponents would be complaining that people are struggling and the president isn't doing anything.
Now, they'll complain that it's either worthless or ten months too late. Either way, their complaints will resonate only because the unemployment rate is so high and there's a reason to complain.
Back when the stimulus was about to pass, Bill O'Reilly said that Obama was staking his presidency on its success. He said that there was something admirable in taking that large a gamble on such a policy. I suppose there is something admirable in believing so much in a policy that you stake your presidency on its success. It's even more admirable, however, if said policy actually works.
Back at the beginning of his presidency, Ronald Reagan faced a unique problem. He faced high unemployment and high inflation. While he was working on cutting taxes to stimulate the economy, Paul Volcker was raising interest rates to reverse inflation. Of course, the second stunted the first and it was driving factor in the double dip recession that occurred. Reagan never wavered and he never questioned Volcker as he was stemming inflation. I was too young to remember so I don't know if Reagan held any jobs summits in 1982 when things looked bleak. Reagan wound up watching his Republican allies suffer heavy losses in those mid terms. Then, in 1983, the economy began a remarkable turnaround that ultimately only ended in 2008. Reagan indeed, also, staked his presidency on a bold policy, dropping the top rate from 72% to 28%. It's even more admirable that he risked everything on a policy that worked.
The jury is still out on whether or not Obama's gambit will work. It may still shake out that running up a near $2 trillion deficit will create jobs. We're still years away from making a final judgment. That said, Obama is now married to his stimulus. The fate of his presidency rests entirely in it working and leading to economic prosperity. It will be that success or failure and not any jobs summit that will matter. This is the story of the day but the real story is the fate of the stimulus.
I was at Thanksgiving dinner with a professor that also believes in global warming. They minimized the consequences of climategate. They told me that in almost every research endeavor you will find so called outlier data and that in their opinion this was being blown out of proportion. It isn't. What these professors did is inexcusable and unforgivable. In fact, what they've done is make all research on any subject less credible. If these scientists hid vital data, how can we trust any data? I did a story a few months back about Dr. Charles Nemeroff. Dr. Nemeroff took millions in payments from major drug firms like Pfizer all while writing positive research papers on their drugs. He almost always failed to disclose the payments when writing his papers.
There is an unfortunate level of corruption in academia that often leads to compromised research. I spoke to Nemeroff's colleague Dr. Doug Bremner and Dr. Bremner told me that while he was unaware of Nemeroff's corruption prior to its disclosure, it was in fact common place for such conflicts of interest to occur.
In our media culture however, all stories have become politicized. So, this story, which should be about corruption, has turned into science and politics. These emails, which took place at East Anglia University, have been used as the centerpiece of a full frontal attack on the science of global warming. Conservatives are now claiming that the release of this data proves that climate change is bunk.
That's a bit disingenuous. After all, conservatives already thought that global warming was bunk and had a mountain of evidence to prove it. That's why I never understood this line of attack. The opinions on climate change vary. The evidence varies, and the only place that this has become a settled matter is in the minds of those that treat global warming as a pseudo religion. So, nothing in these emails changes that.
Nevertheless, I think it is important for scientists to clearly state that if basic data were withheld, or if there was unprofessional tampering with the peer-review process, we do not condone these acts. It is equally essential to emphasize that alleged problems with a few scientists' behavior do not change the consensus understanding of human-induced, global climate change, which is a robust hypothesis based on well-established observations and inferences.
That's a bunch of nonsense. Nothing is established. For every scientist convinced that there is global warming I can find just as many dubious or flat out saying there's no such thing. It isn't an established fact now, it wasn't then, and these emails don't change that one bit. Those that claim this is a "settled matter" simply want to dismiss countering opinions, hypotheses and data much like the corrupt scientists at the heart of the scandal.
That's what's at the heart of this scandal. All these scientists were so committed to a hypothesis that they simply refused to consider anything that ran counter to that hypothesis. That's not science but propaganda. That's at the heart of this scandal, and unfortunately, this is a far too common occurrence in academia.
Like almost all stories in our media today, it's become politicized. The right can't get enough of it and thus have used it as a club to beat the concept of global warming. Meanwhile, the left is afraid of the story because of what the right is doing, and thus ignoring it. Much like most stories, the media isn't reporting on it but rather using it for ideological purposes. The scientists involved have become an afterthought. Most people following it couldn't even name. (please don't name them, I said most not all and google is a wonderful thing) Instead, the focus is on the administration, the science itself, rather than the unforgivable corruption they committed. That's the unfortunate thing. In fact, what Dr. Charles Nemeroff did was much worse. He took millions for more than two decades from drug companies and allowed that to influence his research to the point it was worthless. That story received scant attention, despite a Congressional investigation, because he did it in a field most media don't care about. So, his corruption went largely unnoticed. Because this corruption occurred in an area the media does care about, this story took off. Of course, the corruption itself is an after thought.
As such, we are missing an opportunity to lift the veil on academic research corruption. That corruption is a cancer in the community and this is an example. Delving deeper into that problem we'll find all sorts of problems with data on many subjects, not just climate change.
Yesterday, the Senate Armed Services Committee held a hearing on the President's Afghanistan policy, and we got a preview of the way things will likely go for him going forward. Obama's policy was attacked from both sides. Carl Levin of Michigan was the chief attacker of the president from the left and John McCain was the chief attacker of the president from the right.
Levin's main problem was extremely techical though it follows to a larger mantra of the left. According to Levin, the Obama plan requires that in the hold portion of the operation, (remember that this will still be Petraeus style counter insurgency of clear, hold, and build) that one American troop would be available for every three Afghan troops. Yet, according to Levin, there simply aren't enough trained Afghan troops to accomplish this. As such, Levin is very concerned about sending thirty thousand additional troops. In Levin's view, this operation needs to be lead by the Afghans not the Americans.
The left has long been calling for us to turn this operation into an advisory/training mission primarily. In that we build the Afghan military into as big and as efficient a fighting force as quickly as possible and leave our soldiers in the background so that the take on as few casualties as possible. (there is the extreme left that wants to pull out entirely as well)
The back and forth between Levin, Mullen and Gates was even more technical and ultimately Mullen put it best when he said that for each neighborhood things would be unique. So, it's not entirely clear if the president's goal of one American troop for three Afghans can or cannot be accomplished. What's more important is that the left has no use for any escalation and they will beat to death any and all available technicalities to show that the "escalation" is not worth it.
Meanwhile, McCain was fixated on the idea that Obama not only called for a date certain to begin the draw down but that this date certain would be "conditions based". McCain was almost a broken record in that the two aren't compatible. In reality, the president has shown over and over that deadlines and timelines are things he almost never keeps himself to. We were supposed to have health care reform by now. GITMO was supposed to be closed in January. So to are we supposed to draw down in July of 2011. It's likely as meaningless as all his timelines.
That's the point that Bill O'Reilly made last night. He's right but there's a larger point. First, if a president constantly sets timelines that aren't followed that's a problem. Second, and more germane here, if he's setting timelines before the mission starts, how committed to victory can he be? It's his lack of commitment to victory that you will see Conservatives hammer at ad nauseum.
On a political level, this Afghan policy is a disaster. He gave everyone a little to like and something to hate much more. Sure, the liberals love the idea of a timeline for withdrawal, but they want to do it now. They hate the escalation much more than a timeline they know he won't follow anyway. Sure, the conservatives love that Obama decided to largely go with the McChrystal/Petraeus counter insurgency strategy, but they don't believe he's committed to winning. Without that commitment, the conservatives don't feel any strategy would work.
So, what you're going to see is a steady stream of criticism from all sides on a range of issues on Afghanistan and given that he wants to pass health care, such a blazing criticism only makes that even harder.
The number of U.S. workers filing new applications for jobless insurance unexpectedly fell last week to the lowest level in more than 14 months, government data showed on Thursday, pointing to a moderation in the pace of job losses.
Separately, non-farm productivity was slightly less robust than previously thought in the third quarter as workers earned more money and output rose at a slower pace, government data showed on Thursday.
The European Central Bank kept rates at a record low of 1 percent as expected on Thursday, leaving markets firmly focused on how it plans to handle the delicate process of phasing out its financial crisis support.
With markets still some way from normality, all 80 economists in the latest Reuters poll had predicted the rate decision. Currency and bond markets were little moved by the decision.
The equity markets have all but shrugged off news in Dubai for now. Futures are up this morning and all three indices are back to roughly the levels they were at before the news. In fact, the big financial news of this morning, domestically at least, is the consummation of the deal between Comcast and GE that will give Comcast controlling interest in NBC.
Comcast Corp. announced Thursday it plans to buy a majority stake in NBC Universal for $13.75 billion, giving the nation's largest cable TV operator control of the Peacock network, an array of cable channels and a major movie studio.
Although the deal could mean that movies could reach cable more quickly after showing in theaters, and that TV shows could appear faster on cell phones and other devices, it was already raising concerns that Comcast would wield too much power over entertainment.
Meanwhile, good news in equities has been bad news for bonds. After the ten year U.S. Treasury bond tested 3.20% earlier in the week, it's now back up to 3.38%. The yield spread between the two and ten year has increased to 2.61%. The three month treasuries are still positive, barely, paying .005%.
In the Far East, the Hang Seng is up 1.19% and the NIKKEI in Japan is up 3.84%. In Europe, the FTSE in London was up .1%, the DAX in Germany was up .38%, and the Spanish index was up .82%.
The Dollar is mixed this morning. It's down by .31% against the Euro, up by .17% against the British Pound, and up by 1.01% against the Japanese Yen.
Pre Introduction: This piece was supposed to go up this evening on the web site Big Government. I hope it will soon but in the meantime, here it is in it's entirety. The piece is being run in conjunction with the release of a letter sent by Congressman Brad Miller to General Eric Shinseki on behalf of Dr. Anna Chacko on May 15th, 2009.
Introduction:
Dr. Chacko spent six years at Lahey Clinic in the Boston suburb of Burlington. When she was fired from there, security had to forcibly carry her out all while Dr. Chacko screamed
Kiss my big Indian Ass
(Dr. Chacko is of Indian descent)
After Lahey Clinic, Dr. Chacko spent about a year at the BostonUniversity until she was removed after complaints of sexual harrassment to human resources.
From there, Dr. Chacko moved to St. James Hospital in Butte, Mt. ashead of radiology in July of 2007. Dr. Chacko replaced the three radiologists there. The three radiologists, Drs. William Driscoll, Jesse Cole, and Dennis Wright, had a combined 70 years of service to St. James. Prior to her arrival, St. James CEO, James Kiser, often referred to the radiology department as its "savior" because itsconsistent seven figure bottom line profitability almost singlehandedly kept the entire hospital profitable. Dr. Chacko left St. James fifteen months later in October of 2009, and she took all thenew radiologists with her. In the interim, no less than four lawsuits were filed in which she was mentioned prominently. The radiology department, once the savior, was now deep in the red. In fact, thehospital was on the verge of collapse and they were about to default on lease payments for millions of dollars worth of radiology equipment that Dr. Chacko herself ordered.
Despite this, Dr. Chacko was able to land a plumb job as headofradiology at the Pittsbugh VA and started there in October of 2008.
The letter is from Congressman Brad Miller of North Carolina's 13th district and it is addressed to General Eric Shinseki, the head of the Veteran's Administration. The letter is regarding a personnel issue at the Pittsburgh VA about a Dr. Anna Chacko. I have had this letter in my possession since the beginning of September. I have been under strict orders not to release it until a couple days back. I've decided to release said letter onto Big Government and have it be the center piece of the first of what I plan on making a series of articles about Dr. Chacko here.
This letter, dated May 15, 2009, was sent by Congressman Miller on behalf of Dr. Anna Chacko. In March of this year, Dr. Chacko was put in front of an adminstrative investigative board at the Pittsburgh VA to determine if she should be removed from her post as head of the radiology department.
Dr. Chacko arrived at the Pittsburgh VA in October of 2008. Almost immediately, staff began making formal complaints about Dr. Chacko. One doctor, Dr. Tanuja Kanderi, complained that Dr. Chacko had called her other employer, the University of Pittsburgh Medical Center, and made disparaging statements about her to the administration there. Dr. Chacko routinely refused to do her required clinical work. Dr. Chacko went so far as to implement a rule that forbade chit chat and mandated that all members of the radiology department only be allowed to speak on matters related to their jobs.Several members of the radiology department were recent legal resident aliens. Dr. Chacko would threaten them with calls to immigration if the "crossed her". The environment described to me by a source in the radiology department was "the department was divided and at war with itself"
In fact, what I've just relayed was part of the sworn testimony at the administrative investigative board hearing that convened in March. In fact, the Pittsburgh VA was determined to remove Dr. Chacko and was in the final stages of doing so if fate, Congressman Brad Miller, and General Shinseki hadn't stepped in.
In April, Dr. Chacko hired a lawyer. The lawyer determined that the investigative administrative board had failed to give Dr. Chacko her "due process" and the results were thrown out. The Pittsburgh VA was in the process of convening a Professional Standards Board. That was scheduled to convene on May 21, 2009. It also had the potential of removing Dr. Chacko. It never convened.
Instead, Dr. Chacko reached out to Congressman Miller. He sent said letter to General Shinseki. Then, within weeks, word came down from Shinseki's office to the administration at the Pittsburgh VA to cease proceedings to remove Dr. Chacko and restore her as head of radiology.Congressman Brad Miller is from North Carolina. The Pittsburgh VA is in Pittsburgh, Pennsylvania, of course. It's not entirely clear what jurisdiction he had in this matter. He is a member of the House Science and Technology Committee, which has some oversight over the VA system, but that doesn't give him any oversight into personnel matters at a VA hospital that isn't even in his district. In fact, here's how Miller begins his letter.
I do not ordinarily regard a personnel matter in the executive branch as a proper subject of congressional oversight
The tenor of the letter paints a picture of management at the Pittsburgh VA that is incompetent, corrupt, and chaotic. At one point, Miller says this.
there is something very wrong in the management of the VAPHS (VAPHS is the acronym for the hospital involved)
He accuses the management of having a myopic goal of getting rid of Dr. Chacko. Both sources that testified at the original board vehemently disagree with this characterization. Instead, they point to a pattern of behavior by Dr. Chacko that makes her individual that's simply unsuited to continue to work at the Pittsburgh VA.
Dr. Chacko was ordered to complete a management training course and then on August 1st, she came back to work. Her behavior became even more extreme following her return. She even more routinely refused to do her clinical work. In fact, often radiologists would have to involve the head of the Pittsburgh VA, Terri Wolfe, to force Dr. Chacko to do her clinical work.
According to a source in the department, Dr. Chacko also began to make a series of complaints about members of the staff. Almost always these same people were also making complaints about Dr. Chacko.
The first article recounts how two radiologists with a combined sixty years of service at St. James were let go to bring in Dr. Chacko to head the department. The second recounts how Dr. Chacko filed suit against another radiologist named Jesse Cole because she alleged he threatened her. A third story talks about a lawsuit by the former radiology manager at St. James, Kristi George, in which George claimed that Dr. Chacko lied about her, disparaged her to colleagues in an attempt to have George fired. The final article, from September of 2008, recounts how Dr. Chacko would be leaving St. James AND take all the radiologists in the department with her. Again, two radiologists with sixty years of combined service were removed so she could step in AND she was gone less than two years later. In my opinion, those articles should have been a major red flag.
Furthermore, Dr. Chacko, now 64, has worked at the Boston University Medical Center in Boston, St. James Hospital in Butte, Mt., and the Pittsburgh VA all since the end of 2006. That's a peculiar work history for someone that age and should have been another red flag. Given the accusations against her, there should have been all sorts of red flags for both Miller and Shinseki before injected themselves into this matter.
Here's how a source described my contribution to the story.All
of us are very grateful to you for what you have done. If it were not for your articles the senior VA adm in Washington would have not realized what she is
Besides an obvious attempt to stroke my ego, that statement also reveals that those in D.C. clearly didn't do their homework before the injected themselves. I am not the head of H.R. at the VA. As such, it's not my job to show the administration that their personnel decisions at the Pittsburgh VA were misguided.
By now, it should be clear to all that neither Congressman Miller, General Shinseki, or Dr. Anna Chacko ever wanted this letter to come to light. If they had their way, all of this would have occurred and no one in the general public would have known.
In fact, the story of how I received this letter adds the last layer to this story. Upon her return, Dr. Chacko showed this letter to an individual she thought she could trust. (I don't know their identity) She couldn't and eventually the letter wound up in my hands. I was under strict orders not to release because my source feared that Dr. Chacko would know who betrayed her and take reprisal. Dr. Chacko showed this letter to the individual in the context of a power play. According to a source, words to the effect of
see I can get a Congressman to write the head of the VA on my behalf so don't cross me
were used. I don't know how much responsibility Congressman Miller feels for writing the letter (since he refuses to speak to me), but he should know that this letter was used by Dr. Chacko as a tool of intimidation. Furthermore, because Dr. Chacko challenged the results of the original investigative board, she was given transcripts of all the testimony. As such, when she came back, she knew who in the department testified against her and of course, she treated them with an extra venom. (again, the same two sources confirmed that as well) I don't know if General Shinseki had done the math on all of these calculations, however, by sending her back, he unwittingly gave her a tool that she used.
Mind you, Dr. Chacko is 64. Her career spans several decades and includes stints in the military, she reached the rank of Colonel. (Often she directed colleagues to call her Colonel) As I unfold this story on Big Government, it will add even more context to the decision by both Miller and Shinseki. In Chicago, we call this CLOUT. In Chicago, it means cronies getting cushy jobs in the water, parks, and sanitation department. In so doing, those that know what they're doing are passed over and move on. Incompetents then become in charge of the city's infrastructure, and that's why the city is now falling apart. Dr. Chacko had clout and everyone else in the Pittsburgh VA didn't. As such, she wasn't removed and everyone else suffered. In fact, the Pittsburgh VA has suffered. I've been told that almost everyone in the department began to put their resume out there upon her return. It's what happens when those in power misuse their power. It's what happens when they inject themselves where they don't belong without having all the facts.
I'm always amused when someone claims that our VA system is a model for government run health care. Dr. Chacko is the poster child of what happens in the VA. It's this sort of clout that corrupts the system.
Excuse the lack of posts today but I expect to put up my first Dr. Chacko piece on Big Government. I've been working on it all day. As soon as it's up, I'll put up a link. If doesn't go up, it will be released here. To preview, the letter from Congressman Brad Miller to General Shinseki on May 15th will be released for the first time. It's been referenced and now it will be revealed.
Please note. I welcome any and all comments from any political perspective. I will not stand or approve any swearing, and personal attacks will likely also not be approved.
