Thursday, October 3, 2013

Some evening reads

Just a few things to read tonight.

Michael Shaoul - ISM non-manufacturing. "The sector remains in a long period of expansion."

Michael Shaoul - Initial claims data. Quote:
It also brings up the question of credibility for the Non-Farm Payroll report which has remained largely static over the last 12 months, averaging around 180K a month for this period. In order to reconcile this data you would either have to believe that Initial Claims are entirely erroneous (unlikely given that they are derived from actual claims made in state offices) or that employers hired around 100K LESS employees a month in the 12 months ending in September 2013 than the year ending September 2012. Although we are prepared to believe there has been no significant acceleration of hiring, we do not believe that there has been significant less willingness to take on labor.

We must therefore be open to the possibility that the Non-Farm Payroll report and the Household Survey which drives the Unemployment Rate are significantly underestimating the strength of employment gains in recent months. Given their wide error tolerances and publicly admitted deficiencies at tracking employment at smaller and new businesses this would come as no surprise, but it does have obvious implications for the setting of monetary policy and the undertaking of economic analysis.

We remained convinced that the US economy is moving on a substantially faster track than is widely realized, and concerned that monetary policy is currently calibrated for the economic and financial conditions that were in place 5 years ago. Eventually at some point in a cycle economic reality and monetary policy (and sometimes even economic analysis) converge and given the current gap we would expect this to be a fairly explosive process whenever it finally occurs.
Mineweb - the process of selling silver. Hats off to EDR for putting edumacational videos on the internet. Maybe IR meatheads worldwide will someday look at this and see that this is the way you encourage investors back into the mining scene?

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