Sept 9. Obama presses case against Syria on 9/11 anniversary
–Interest rate futures bounced on Friday’s employment data as NFP was only 169k with downward revisions to previous months, with a new 35 yr low in the labor participation rate. At the initial participation level, unemployment would be 10.8%. At this rate we’re nearly a decade away from pre-recession employment.
–In terms of the continuing recovery, disquieting news is still prevalent. For example, “in June, the number of households receiving foodstamps rose to 23.117 million, an increase of 45.9k in one month, and also a new record high.” (ZH) The group hitting record employment levels are those over 55 (St L Fed), and I would suspect that this group mostly feel forced to take any job possible to cover overhead expenses. In that regard, IBM is moving 110k retirees off its company health plan and giving them a payment for health insurance exchanges…”even big, well-capitalized employers aren’t likely to keep providing the once-common benefits as medical costs continue to rise.” (foxnews) Big cities continue to have fiscal challenges, Philly needs to borrow $50m to pay school employees this year and a deal for Chicago to lease out Midway airport just fell through as the city doesn’t feel it’s getting enough. And while the housing recovery has been impressive, a graphic in the WSJ shows that Fannie, Freddie and other govt agencies issue well over 90% of new mortgages, indicative of a subsidy.
–That’s the longer term stuff, but this week of the 9/11 anniversary, geopolitical issues will dominate the news as Obama presses for military action against Syria, which appears increasingly unpopular both domestically and abroad. Either way it represents a loss in presidential credibility, perhaps with ramifications on the debt ceiling, etc.
–While bonds rallied, the ten year yield only fell about 4 bps to 2.935, still fairly close to 3%. As John Brady mentioned on BBG Friday, there’s a global pool of money out there searching for returns, and 3% starts to look pretty attractive. Crude oil had a strong rally Friday and though down slightly this morning, at $110/bbl is still around the highs made since the spike in 2008 (the spike, by the way, that made a strong contribution to the financial crisis).
