Re: usa vs kina

The bigger news was CIT's statement that it didn't feel that a bailout was likely. CIT apparently falls in the category of "small enough to let fail", even if it would still represent one of the largest bankruptcies in US history. This sent risk trades in a brief and sharp swoon overnight, before they recovered a bit later on the JPM "earnings" news. Also bolstering risk appetite again ahead of the US equity open was the Jobless Claims data, which showed a 667k non-seasonally adjusted number (vs. NSA of 581k last week) changed to a 522k seasonally adjusted headline. Voila - a stroke of the statisticians keyboard and you vaporize the activity of a net 145,000 people filing for claims after losing their jobs. Yes, there is a tendency for a large spike in claims in early July that then quickly fades, but we won't know the true level of jobless claims until we get into the fall firing period. Last fall/winter, Jobless claim rates as high as 900+k were revised down to sub-600k levels for seasonal adjustments and the seasonally adjusted numbers actually peaked when the SA numbers . It's all a circus really. As well, we must consider the fact that claimants - to be counted in these statistics must be "Actively seeking work". As we have read and discussed elsewhere, the quotient of discouraged workers is growing rapidly. The continuing claims number dropped by so much that is must also be due to some statistical adjustment - we'll have to look for an explanation. In general, analysts are saying that the large drop in both SA numbers is a distortion caused by all of the auto industry layoffs - an effect which will likely fade in coming weeks.