Who knew all the market needed was a sharp increase in unemployment to get going. The Dow Jones and S&P 500 indexes both ended the day in positive territory despite the unexpected jump in the unemployment rate to 6.1% from 5.7%.

But all is not rosy. The liberal advocacy group Campaign for America’s Future put out a release Friday noting that “the misery index” has risen to 11.7%, it highest level since 1991. You may recall that the index came into vogue during the 1970s and 1980s political campaigns. The index is a composite of the unemployment rate and inflation using the annual Consumer Price Index.

The press release got us thinking. We have chronicled in this space recently how the various methodologies to calculate economic reports by the Federal government have been altered to produce more positive numbers. In the July issue of Futures, we interviewed economist John Williams who keeps up the government’s economic statistics using the original methodology at his firm Shadow Government Statistics (SGS).

Continue reading "Misery loves company" »

2008 may be the year emerging market exchanges ceased to be footnote participants at the annual Bürgenstock Meeting, sponsored by the Swiss Futures and Options Association (SFOA) and held this year in Interlaken as the Bürgenstock resort undergoes renovation.

As always, the host country – in this case, India – was the focus of Wednesday evening's opening panel and Thursday's entertainment; but representatives of the Multi-Commodity Exchange (MCX) and its parent, Financial Technologies (FT) did more than just put on a good show.

Continue reading "Indians Dominate Swiss Futures Meeting" »

One of the major issues discussed in the CFTC's April agriculture forum was the lack of convergence between futures and cash prices in the ag markets. In July, the agency's Agricultural Advisory Committee held another meeting about convergence, where Acting Chairman Walt Lukken noted that "Some commercial participants have lost confidence in the ability to hedge in certain of these markets and it is critical that market participants work with the Commission to address this matter aggressively." Today CME Group offered to the CFTC some recommendations to improve convergence in its wheat contract, including increasing storage rates during the period from July through November to 8 cents per bushel per month, adding delivery points and a recommendation that the vomitoxin level for par delivery be lowered from three parts per million (ppm) to two ppm.

Continue reading "CME Group offers convergence tips" »

Remember last month when the unemployment rate shot up to 5.7% from 5.1%? Well, in August, things continued to deteriorate in the jobs scene. Unemployment increased to 6.1% and nonfarm payrolls decreased by 84,000, with concentrated losses in manufacturing and employment services, interestingly enough. In the past 12 months, according to the Labor Department, the number of unemployed has increased by 2.2 million and the unemployment rate has risen by 1.4% in the past year.

Continue reading "Competing forces: USD recovery and U.S. jobs" »

Suspicion of government economic reports is at an all time high and given our government’s propensity towards happy news, and that we are in the midst of a political convention, traders must be looking at tomorrow’s unemployment report with a certain amount of trepidation.

That we are going into the number on the heels of a 344 point drop in the Dow Jones Industrial Average makes things more interesting. Did someone know something?

Initial unemployment claims for the week ending Aug. 30 jumped to 444,000, well above consensus estimates, contributed to negative sentiment. But tomorrow is the big one and given today’s move, a slightly better than expected report could cause quite a rally. As someone who followed these reports very closely, I can say that it is not that unusual for the unemployment report to come out completely counter to what initial claims showed. So it would not be proof of some conspiracy if tomorrow’s report is positive.

Continue reading "Unenjoyment day" »

Sick of high gas prices? Don't worry...Diddy feels your pain. In a video diatribe, the hip hop mogul/purveyor of bling/frequent name-changer reveals that the skyrocketing price of oil has caused him to (gasp!) fly commercial. When Diddy leaves his private jet at home, you know the situation is dire. But Diddy isn't spending his time blaming speculators for the spike in oil like most of Congress, or instituting a hedging program on his fuel like most U.S. airlines. Instead, in true player fashion, he's giving a shout-out to all of his "Saudi Arabian brothers and sisters" asking "y'all to send me some oil for my jet." If his associates don't come through, perhaps Diddy could act as a celebrity witness if, as expected, Congress reopens hearings on speculation in the fall, bringing some much-needed hip-hop flavor to the proceedings. Word.

Reading the minutes from a Federal Reserve Open Markets Committee (FOMC) meeting can be frustrating and downright painful. The committee literally has dozens of hands and keeps on looking at another.

A newswire story citing a minor shift towards concern over slow economic growth from inflation caused me to look at the release closely.

I guess it was there somewhere but darned if I could find it. It is odd that they would abandon their shift from inflation after only just discovering it despite it being apparent for quite some time. But as Economist John Williams noted in the July issue of Futures, “The Fed is not concerned with inflation. It is not concerned about the economy…its primary function is keeping the banking system solvent.”

Continue reading "On the other hand" »

While out last week on my “staycation”, my wife and I took our three boys to navy pier in Chicago. It was a beautiful summer day in Chicago and the Chicago Air and Water Show was going on, providing some impressive sights and sounds to our trip to the lake.

We were disappointed that we could not walk all the way out on the pier because a private party had rented the fancy ballroom at the end of the pier and blocked off the public walkway as well. I noticed that Wachovia had rented the space and made a mental note that things must be improving for the bank. Maybe all those analysts claiming that the worst is over for the investment banks are right after all. If you make the same claim every few months you will eventually be right.

Continue reading "Party like it’s…" »

Futures magazine has five pairs of free tickets to see the premier of I.O.U.S.A. on August 21 at the Evanston 18. The show time is 7 p.m.

This should be quite an event. As much as I’m looking forward to the movie, the live round table discussion that follows should be just as entertaining. Participants will include Warren Buffett; William Niskanen, chairman of the Cato Institute; Bill Novelli, CEO of AARP; Pete Peterson; and Dave Walker, president & CEO of the Peter G. Peterson Foundation and former U.S. comptroller general. The panel will be moderated by Becky Quick, co-anchor of CNBC’s morning news show Squawk Box.

To claim your tickets, simply send me an e-mail at cmcmahon@futuresmag.com; include your name and a phone number and FREE TICKETS in the header. To claim your tickets, you will need to pick them up in person at the theater no less than 20 minutes prior to showtime.

Until you hear the urgency in Addison Wiggin's voice, you may not think that our $8.9 trillion national debt is an obvious topic for a film documentary, but you may leave the conversation convinced it’s a great subject for a horror flick.

The movie I.O.U.S.A., opening Aug. 21, follows Dave Walker, former U.S. comptroller general, and Concord Coalition Founder Robert L. Bixby on their Fiscal Wake Up Tour. For 18 months, at Rotary Clubs, Better Business Bureau luncheons and town hall meetings, they discussed the national debt, its implications and possible solutions to the looming economic danger that threatens the United States. The film also features interviews with “the Mount Rushmore crowd of American economics,” including former Federal Reserve Chairmen Alan Greenspan and Paul Volker, and former Treasury secretaries Paul O’Neil and Bob Rubin as well as Warren Buffett, chairman of Berkshire Hathaway and one of the world’s wealthiest men, to tell the story. “We have the guys who are responsible for the Federal Reserve and heading up budget committees in Congress, and the former Treasury secretaries,” but it’s not just charts and figures, Wiggin says.

Read more for info on your FREE TICKETS from Futures Magazine...

Continue reading "I.O.U.S.A.: Documentary or horror flick?" »