lassieNonfarm Payrolls fell 598K, blowing by market expectations of minus 525K.  The unemployment rate also jumped, posting a 7.6% level, the highest in more than 16 years.  Service sector jobs did the most damage, falling 279K while most of us built in a number closer to 230K.  Overall, the number is something of concern as the U.S. economy has lost 3.5 million jobs in the last 12 months.

What you are seeing here is consumer who is unemployed or under-employed, going into full-preservation mode.  Even those who can spend, won’t.  In our opinion, what the administration needs to do is apply the “shock and awe” treatment —  and quickly.  A few bullet points come to mind:


  1. Fix the banking system by putting government guarantees on the toxic assets and make the responsible parties clean up their own mess. 
  2. Support the consumer side (car loans, credit cards, etc. with guarantees to get that sector of credit flowing again. 
  3. Put out a meaningful stimulus program that creates jobs, jobs, jobs. 
  4. Work with global trading partners on coordinated efforts to stop the bleeding.  

We can do our part to get the economy going.  

  • First, call the baby sitter and go out tonight (salary cap for sitting will apply).  
  • Then, go out to dinner (dollar menu is acceptable).  
  • Now, stop by the liquor store and get some beer (Keystone will do).  
  • Then, go to a cheap, feel-good movie (Lassie in HD will work) and sneak in a few beers (cost-cutting measures).  

Nice night out and the economy will thank you.  As we were pretty close to our employment “guess,” we didn’t get the expected reaction from treasuries and mortgage backs.  Both are off post data with the 10-year note down 16/32s (yield 2.96%) and MBS off 5/32s.  Both seem to be pessimistic about Monday’s rescue plan (due for release by the President and Treasury Secretary) and fearful of supply coming new week (treasury refunding auctions).  

Stocks seem to have built in a 600K number and are hopeful of something good for banks, etc. in Monday’s rescue plan.  For now, we feel the market is closer to neutral than bearish and expect a little improvement once the auctions are out of the way next week.  

Until then, hope the Apple Dumpling Gang on Capitol hill get’s it right on Monday.  We’ll wrap this up later today.