John Stewart Exposes The Charlatan Jim Cramer

Hat tip to Deano for spotting the latest skewering of CNBC and more specifically Jim Cramer on The Daily Show. After the great job they did on CNBC just a few days ago, Jim Cramer tried to defend himself in an article on mainstreet.com. Read Cramer Takes on the White House, Frank Rich and Jon Stewart.

However Cramer would have been better off shutting his mouth and taking his medicine as The Daily Show absolutely tore him a new arsehole in their latest segment and showed him up as the true charlatan that he is. Once thanks again to Deano for the links and the heads up.

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ANZ Job Ads Show Biggest Monthly Decline Ever

Last month I noted that the increase in newspaper ads in December should be viewed with caution. That turned out to be on the money as newspaper ads fell -25.2% in February, wiping out all the gains in January and then some and are now down -55.4% from a year ago.

Internet ads which make up for 95% of all job ads fell -9.4% in February and are now -38.6% lower than they were a year ago. The combined total of ads from both internet and newspapers fell -10.4% in February, the biggest single monthly drop since the combined series began in 1999. Also the year over year decline of -39.8% is also the largest since the series began.

ANZ's Head of Australian Economics, Warren Hogan, had this to say:

The trends in job advertising in Australia suggest a substantial rise in the unemployment rate is likely. We have revised up our unemployment rate forecasts. We now expect the unemployment rate to reach 6½% by the end of 2009 and 7½% by mid 2010. These job advertisement numbers, based on historical relationships, suggests the risks to our forecasts are for higher unemployment.....

...Our assessment is that the latest job ad results are consistent with employment contracting at a 2% annualised pace over the second half of 2009. This in turn suggests that the current downturn in the economy is likely to last throughout 2009, with little prospect of a meaningful recovery before 2010. Recent trends in job advertising are consistent with other indicators which suggest that the Australian economy entered recession in late 2008 and remains in recession in early 2009.

Well fancy that, a mainstream economist is now playing catch-up with a deteriorating economic picture. Welcome to the recession camp Warren, you may be late but you won't be the last. Note that Hogan say risks to his unemployment forecasts are to the upside. I concur.

Also out today, NAB's monthly survey of business conditions which fell to -20, a reading not seen since 1992. NAB Chief Economist Alan Oster had this to say, from The Australian:

"There is little in the survey to suggest that activity levels might be bottoming with continuing falls in mining and manufacturing activity very prominent,"

"Nor is there much solace to be found in the employment, forward order and capex data in the survey."

The bank has lifted it forecast for the nation's jobless and now sees it at 6.5 per cent by the end of 2009 and 7.5 per cent in 2010

The NAB survey showed the employment index fell by 10 index points to minus 27 points in February, the largest fall in the survey's history to level last touched in December 1991.....

...."Our forecasts imply a moderate recession in 2009 - it would no longer be appropriate to classify these forecasts as a mild recession," he said.

NAB expects the Reserve Bank to cut the cash rate to 2 per cent by late 2009, from 3.25 per cent currently.

Seems Allan Oster and Warren Hogan are now smoking from the same hookah pipe (click the link if you don't know what a hookah pipe is). Yes I know, what use are economists in telling you what you already knew 3 months ago ? None, charlatans the lot of em.

The thing to note is that their forecasts continue to get worse, just 3 months ago, most thought we could scrape through and avoid a recession. a month ago it was maybe a mild recession and now its a moderate recession. Give them a few more months and it will be a severe recession with unemployment forecasts over 8% in 2010. But since you know that already, it won't be a surprise when the media excitedly announce it.

Geithner Gone By June?

Chris Whalen of Institutional Risk Analytics says that Tim Geithner will be gone by June. Also in this brief piece, he says Citigroup will be resolved by some kind of liquidation process, about time. Let's hope he's right on both scores but I have a feeling we may be disappointed.

February Another Horrible Month for US Jobs

US non-farm payrolls shed 651k jobs in February. However, as usual the more interesting numbers are the revisiosn and they shoeed a continuation of an already bad trend. The trend in recent months is for revisions to be on the downside and this month was no exception.

December payrolls were revised from a loss of -577k to a loss of -681k whilst January was revised from a loss of -598k to a loss of -655k. Job losses are clearly worse than the headline number indicate. Revisions to January (each month undergoes two revisions) and February could easily push losses for those months in excess of 700k.

In the past 4 months, 2.6 million jobs have been lost, the most in any 4 month period since the 4 months from June to September 1945 when 2.8 million jobs were lost.

Of course that needs to be put into perspective. 2.8 million jobs in 1945 amounted to a massive 6.8% of the labor force whereas the current 4 month contraction amounts to 1.9%. That is not meant to minimize the current situation, the US economy is shedding jobs at an alarming rate.


The US unemployment rate leapt to 8.1% in February, surpassing the peak of the early 90's recession and reaching heights not seen since December 1983. If you include people who currently want a job but are not actively looking and those working part-time but that would like to work full-time, the unemplyment rate is 14.8%.



The US employment picture gets more grim with each passing month. Job losses are intensifying although an absolute peak in monthly declines may not be too far off. At current rates it is clear that the US unemployment rate is set to push through 9% by the summer and looks likely to hit double digits by the end of the year or early in 2010.

However, as employment is a lagging indicator of interest will be when the monthly declines peak and start getting smaller, that still appears to be a few months away and wll only be obvious after revisions come through to prior months.

The Daily Show Rips CNBC Apart

Absolutely one of the best clips I've seen in a long time. A host of CNBC muppets really get their commuppance on this clip although you'd need a movie length version to do it justice

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Jim Chanos on Incompetence and Criminality

Always worth listening to, Jim Chanos on the distinction between incompetence and criminality. Basically Chanos says we should expect to see Enron style investigations into some of the wildly misleading statements by bank executives over the last couple of years. Chanos reveals how some institutions were pricing securities using two sets of books to make their financial position look better as just one example.

Australian Economy Contracts -0.5% in 4Q08

Back in December in The Recession We Couldn't Avoid, I wrote the following:

"There is no doubt in my mind that the Australian economy is now in recession."

The evidence back then showed that the manufacturing, services and construction sectors had all been contracting for at least 6 straight months each and that surveys of business conditions confidence were at recessionary levels. Today we got more confirmation that a recession has been underway for a least a quarter with the latest GDP numbers.


After tepid GDP growth of just 0.1% in 3Q08, Australian GDP contracted for the first time in 8 years falling -0.5% in the fourth quarter. This would seem at odds with what the RBA announced just yesterday after their decision to leave interest rates unchanged at their March meeting:

"on the basis of currently available information, the Australian economy has not experienced the sort of large contraction seen elsewhere".

True, Australia hasn't seen declines as big as Japan or the US, but the fact is demand is undergoing a significant contraction in the non-farm sector. Excluding the farm sector, GDP was down -0.8% in the fourth quarter.

Also of interest in the above quote is the phrase "currently available data", as noted yesterday, the RBA is a data dependent and therefore a backward looking gauge of the economy. Remember that less than a year ago, the RBA was still waffling on about the threat of inflation and last March actually raised interest rates.

The RBA's ability to forecast the future is no better than anyone else's and so whilst they may be able to formulate a coherent narrative of where we have been, their forecasts for the future should be taken with a large grain of salt.


Year over Year GDP growth rose a paltry 0.3% in 4Q08 the slowest pace since the -0.9% recorded in the 12 months to December 1991, not surprisingly occurring just after the end of the last recession.

Despite the Rudd Stimulus package in December and consecutive interest rate cuts the Australian economy has been unable to avoid a contraction in the fourth quarter of 2008. Whilst Rudd Stimulus mark II will get underway in March and April it is unlikely that these measures can do more than soften the decline in economic activity in 2009.