US Economic Support Pillars are Breaking

Karl Denninger puts out some sobering observations on unemployment -

Holy crap!  Now that's a nasty number.  +893,000?!  Uh, wow.

And the bad news is where it is showing up - the majority of this is in new claims in the regular state figures.  The roll into EUC continues but that +548 up above says that a huge percentage of the people who claimed in the last few weeks "stuck" - that is, there were no material roll-offs from people finding jobs in the weeks leading up to Black Friday.

Remember folks, claims is a "fuzzy" number.  It tells you who claimed but it doesn't tell you who found jobs.  Well, now we know.  And now we also know where the unemployment stats for November, where we lost an actual 500,000 jobs on the household survey, came from. 

Oh, I know, I know..... Nobody could have seen it coming.

 FedEx -

FedEx reported earnings that broadly missed expectations.

Excluding special items, the company reported a profit of $1.16 a share. Analysts, on average, had anticipated earnings of $1.31 per share for the quarter ended on Nov. 30, according to Thomson Reuters I/B/E/S.

Oops.  Or is that UPS.  I guess we'll eventually find out.

Oh wait - higher oil prices are good for shipping companies, right?  You know, commodity costs?  One of the largest expenses for such a company?  Yeah, that's good for earnings.

Riiiiiiiight.

They got hit for a couple of percent premarket, although at the low it was much worse.  We'll see what happens once the stock starts trading.  Revenue was in fact up, and they're expecting a "strong" holiday and improving economy, and thus raised guidance.

We'll see.

And overall economic conditions -

In recap:

• Orders up materially while shipments are down. (Bawhahahaha we know where will end up right?)
  
• Prices paid skyrocketing while prices received are going up - but much slower.  More margin collapse evidence.
  
• Number of employees dropped big.

Headline sounds great, but the internals on the table?  Not so much.

The Real Effect
As was stated at the end of 2009 -

While I don't believe the Mad Max WTSHTF scenario will play out in 2010 fully, barring a game changing terror attack, at a bare minimum people are going to start noticing this huge white elephant in the middle of the room.

In general, 2010 will be the year that the situational blinders come off and everyone realizes that this is serious business here. Think of it as a game of musical chairs where there are 300 million players and only a million chairs and the leader is reaching for the volume knob and if you lose, you lose everything you own.

As if that isn't fun, 2011 will be much worse.

This has definitely been true for this year so far but for further year end review, you shall have to wait a few days.