Wednesday, February 03, 2010

Recession to Recovery and ADP data

Note how the last 3 recessions - 1991, 2001, and 2009 - have all led to very tepid recoveries. What's particularly surprising is that the 2009/2010 "recovery" has been injected with the finest steroids known to mankind - mountains of government stimulus - and yet it still shows a very weak upswing. Will our economy pull an Eric Gagne without the performance enhancing drugs (for the reader that isn't a baseball fan - Eric Gagne went from the best pitcher in baseball in 2003 to pitching for the Quebec Capitales after going off PED's).

The ADP data was slightly better than expected - shedding just 22,000 jobs in January. The BLS data tends to vary widely from the ADP data but this should result in another good jobs report on Friday (that will likely be heavy on phantom Birth/Death jobs).

This report is a divergence from what I'm hearing from companies around the US. Many CFOs have taken a wait and see approach, but as 2010 looks like more of the same -- weak revenues, cost cutting -- they are lining up their next round of layoffs for late February and March. I don't know how to mesh these two different data points at this time.

Quote of the day "Everyone wants an exception for their group and everyone thinks what they do is necessary." This is why people pour into the streets to protest higher taxes or healthcare reform but talk about closing a prison, shutting a fire station, or reducing state ticketing agents.... oops, I mean state police and the same people will scream even louder.

Finally, a little love for you the loyal readers.... if you click through to newsflashr you'll see a list of leading business blogs on the web. It's not a totally inclusive list because some big blogs are missing (like zerohedge and calculated risk). However, after starting 2009 down around the bottom of this list, our little NNY blog has slowly worked its way up to #41! The biggest blogs can fund themselves through ads but I don't like that model so we're still happily ad free here at Grindstone Financial. Thanks for reading and pass along the good news.


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