It's The Economy Stupid: Intervention

Wow!  The ADP Employment Change surprised on the upside by a ton.  Economists were expecting 130K, but the number came in at 206K.   JOB CUTS also declined, that’s a good thing.  Mortgage apps declined 11.7%, which is not so good.

 

Central banks all over the world intervened to provide liquidity to Euroland.  It IS NOT a solution to the Euro problems, it just provides liquidity.  The Federal Reserve and five other central banks agreed to reduce the interest rate on dollar liquidity swap lines by 50 basis points from 100 basis points to 50 basis points and extend their authorization through Feb. 1, 2013.  The Fed, The Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank are involved in the coordinated action.

 

So, they are addressing fundamental liquidity issues and NOT addressing fundamental economic issues.

 

The Fed said “The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and

so help foster economic activity,” the statement said.  

 

Sure, yeah, right.  How many households you know enter into dollar liquidity swap lines????

 

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
MBA Mortgage Applications	25-Nov	-	-11.7%	-1.2%	-
Challenger Job Cuts YoY	NOV	-	-12.8%	12.6%	-
ADP Employment Change	NOV	130K	206K	110K	130K
Nonfarm Productivity	3Q F	2.5%	2.3%	3.1%	-
Unit Labor Costs	3Q F	-2.1%	-2.5%	-2.4%	-

 

 

Boudin Chaud. Cous Cous Froide. Allons Tigres--Poussez Poussez Poussez

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

445 North Blvd, 7^th Floor

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One City Plaza, 7th Floor

Corner of North Blvd & 4th Street

Exit 1B I-110 Convention Street, Turn Left to get to North Blvd