Bad News Is Bad News, Good News Is...

Bernanke's blind faith in empirical formulas over common sense is again in play with his speech today on Recent Developments in the Labor Market.

By Cam Hui: For American investors, Friday will be the big data day which features the Non-Farm Payroll release. The last two NFP numbers have been below expectations.

Last week, economic data indicated some progress on the unemployment crisis and the broader economic recovery underway in the United States.

By Cam Hui: I hate the Non-Farm Payroll release because the market can react in a violent fashion to what is essentially noise. The error term in the NFP release is so enormous that it's meaningless. Nevertheless, we have to deal with this source of volatility.With Friday's NFP release, we are seeing signs everywhere that employment is weakening. How much of that is Sandy related, I have no idea.

By Cam Hui: The ink is barely dry on the Eurozone Grand Rescue Plan and now we have a chorus of "it won't work." I was part of that chorus (see my previous posts here and here). Over the weekend, the bad news kept on coming:

AMERICAN employment put in a respectable performance in July. Non-farm payrolls rose 117,000, or 0.1%, and the unemployment rate edged lower to 9.1% from 9.2%, both better, but not dramatically so, than Wall Street had expected. Any other time this would have been cause for mild satisfaction. In these grim times, it constitutes a massive relief bordering on joy.

By James Kwak