[Premium] Everyone is talking seasonality

Here is something to flag; there has been a lot of chatter amongst economic pundits about the seasonality effect on recent data. Those with a sceptical view have been saying that the upside surprise in the Friday jobs data in particular is the result of seasonal factors. Here are two examples

The fireworks will start with Spain or Italy

Here’s what I had to say about Europe on Capital Account with Lauren Lyster on Thursday night. I’m not bullish on the real economy there (but I still expect relative share outperformance due to lower P/Es). The US is having a bit of a data surge to the upside: housing, employment, manufacturing, all of these numbers have been better of late

The expansionary fiscal contraction bust

If you argue that austerity works in cutting deficits over the longer-term but the short-term pain is worth it, that’s a different argument than the one Republicans are making – and one not likely to get one elected, which is why they’re not making it

Beyond Jobs

The US jobs report is the main economic release today. In recent months, better than expected employment reports have spurred risk on trading and this has been dollar negative. Given the ADP report, despite the December skew in that time series, market expectations appear to have crept higher and it will take a stronger than expected number of give the dollar much of a lift. However, with Spanish and Italian bond auctions next week, the extent of a relief rally in the euro may be constrained

A Tale of Two Markets

The Shanghai has turned down this evening after opening up and looks to continue the downtrend. That is one ugly chart. Meanwhile, the S&P500 looks like it really wants to resolve its wedge formation to the upside. After a year of head fakes, bull and bear traps, traders may have lost a little trust in the charts, however. A good employment number on Friday may provide a nice catalyst for some resolution

America: What to Do with North Korea?

North Korea’s dear leader, Kim II, died a few days ago. His 3rd son is now in charge, as Kim III, Kim Jong Un (pictured). There is no better time to talk about North Korea than now, as evidenced by some timely expert opinions. So it’s time for me to chip in my two cents. I will briefly but succinctly answer five pertinent questions as follows

Chart of the Day: U.S. Real Earnings through November 2011

Only three positive months in the last year. Lots of pain out there. Be charitable this holiday season, our friends. The return is tremendous

U.S. Exposure to Europe – Unknowns Unknowns

As Eurocrats dissemble, ratios that quantify U.S. financial system exposure to European insolvency are dated, even as they are published

Stephen Roach on the IMF bailout, Chinese banks and US consumers

Here’s a good all-encompassing Bloomberg TV video with Morgan Stanley’s Stephen Roach from Friday. He is not impressed with the IMF plans that the Europeans are working on, calling the numbers “chump change”. Roach also talks about the US and Chinese economies as well.

The video is below followed by the copy from Bloomberg

More on how post credit bubble fiscal austerity leads to depression

Britain’s economy is a shambles as the negative impact of austerity has been made plain. Now, mind you, it was already clear from a leaked Greek bailout document that expansionary fiscal consolidation has failed in Greece. But now the OECD’s double dip warning for Britain should make this plain to all

Weekend Developments and Their Significance Going Forward

There have been several important developments over the weekend which are likely to support the euro at the start of the week, after falling for the past four consecutive weeks and recording a 7-week low before the weekend. However, I continue to expect corrective gains in the euro will be short-lived and subject to headline risks. I still think that the $1.29 year end target for the euro is reasonable

PIMCO’s Mohamed El-Erian: US recession odds are 50%

Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian told Bloomberg TV’s Betty Liu and Dominic Chu this morning that U.S. economic conditions are “terrifying” as the nation struggles to recover from recession. El-Erian also said the odds of the U.S. returning to recession are as high as 50%