US unemployment is bad - I told you so

I would normally not like to gloat about being right, but in this case I must. I wrote last week on Wednesday that the US unemployment numbers will disappoint and disappoint badly even though the “experts” (defined as those who make 100 times my salary) were on CNBC telling the world that the numbers will come in line with previous expectations. And what happened the next day seemed to shock those same “experts”. I cannot figure out why.

If you learn anything from me in reading these blog entries, it is that Forex online trading is all about information. Forget candle sticks charts, technical support and resistance points, you need to see what is going on in the world and then, confirm that this is actually the truth.

As we saw from the CNBC panelists, they are just so called analysts who are paid by their companies to “spin” the tale that best suits their employer. In order to bypass and neutralize them, we need to dig even deeper.

On Wednesday, the ADP (remember, the payroll service) came out showing that they had dropped over 470,000 jobs from their weekly rosters, which means 470,000 people were no longer getting paychecks. But Forex analysts don’t take this seriously because it does not suit their interests, they only look at the hard data.

Well, the hard data came out on Thursday from the US government and guess what? 467,000 jobs were lost when the street was calling for 360,000 – over 100,000 jobs more than anticipated were dropped. But here is another lesson for you – and perhaps you can profit from this as well.

The US unemployment figures released last week do NOT include those who are no longer getting unemployment checks (In the US you get benefits for several months and then it stops), it does not include those who got part-time jobs (which is called under-employment as the money they make is not enough to sustain themselves – but they do not qualify for federal benefits) and it does not include those who were recently laid off (by my count there was at least 38,000 in the second half of June from the Auto dealers and manufacturers) as it takes three weeks to process these claims.

SO what I am saying, is next month, you will see a revision upwards in the June number and while it is too early to tell how July will fare, I can almost bet that the ”experts” will be a bit more cautious with their predictions.

The funny thing is, the information that I get is more readily available to those you see on the TV. I am thoroughly surprised that not many more Forex Bloggers are reporting this either. I am no genius, I am not an expert – I am just someone who trades and wants to make sure I do the best I can to not lose my money. And information is key to making sure this happens.

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Forex News: China, Unemployment and Oil conspire against the Dollar

The US’s non farm payrolls are due out later on today and for all their trying, the US government has been trumped by a private firm in revealing these numbers.

The street expected about 360,000 jobs were lost, a nice decline and a sign that things might be getting better. However, ADP, the largest payroll processing service in the US, reported that 470,000+ jobs have been “removed from the payrolls” of the companies that ADP services.

Keep in mind that ADP does not service everyone – there are other services and many small businesses do the payrolls by themselves. So it is not out of bounds to think that this number, 470,000 will be higher. For the Dollar, a higher number can be damaging but it is not the only threat to the greenback.

Yesterday, China called for an open debate at next weeks G8 Summit on the viability of another global reserve currency being established. This is a blow to the US efforts to keep the debate out of the IMF and World Bank boardrooms, as they and Britain control the flow at those institutions.

The voices are becoming louder and the masking of their intentions are becoming less – China has now entered the point of no return, the point at which they have firmly committed themselves towards establishing a new world financial order, in which the Dollar is no longer king.

The Dollar fell on this news and the shock from ADP – ironically, the US stock markets rose late in the day. Forex Online traders and Forex chat rooms were abuzz with the news, however the US governments official stance is that ADP’s numbers are NOT official and do not necessarily reflect the non-farms payroll number.

And while the US stock investors seemed to gobble this up, those Forex online traders did not. And I say: good for them.

This is the story that does not die, and it won’t for a while. But as we see the US’s hopes for a second half recovery fading – we should look at the opportunities that are out there for us.

I am still bullish on the Aussie and I am starting to like the Canadian Dollar. As Oil prices rise, as tensions in the middle east drive that precious commodity up, I see opportunity knocking. And I hope everyone is there to answer the door with me.

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