There are millions of college seniors beginning their job search in earnest.
And many of them are using the skills they've been rewarded for in the past:
Writing applications
Being judged on visible metrics
Showing up at the official (placement) office
Doing well on the assignments
Paying attention to deadlines, but waiting until the last minute, why not
Getting picked
Fitting in
The thing is, whether you're a newly graduating senior (in hundreds of thousands of dollars of debt) or a middle-aged, experienced knowledge worker looking for a new job, what the best gigs want to know is:
Can you show me a history of generous, talented, extraordinary side projects?
Have you ever been so passionate about your work that you've gone in through the side door?
Are you an expert at something that actually generates value?
Have you connected with leaders in the field in moments when you weren't actually looking for a job?
Does your reputation speak for itself?
Where online can I see the trail of magic you regularly create?
None of these things are particularly difficult to learn, if you are willing to be not very good at them before you're good at them.
Alas, famous colleges and the industrial-education process rarely bother to encourage this.
Fed governors sometimes tell the truth, but generally only after they leave office, and always after the damage has been done.
In that regard, former Dallas Fed governor Robert Fisher admits "We frontloaded a tremendous market rally to create a wealth effect ... The Federal Reserve is a giant weapon that has no ammunition left."
The embedded video will not play in-line, but you can view it on You-Tube by clicking a second time on the notice.
Partial Transcript
Fisher: What the Fed did, and I was part of that group, we frontloaded a tremendous market rally starting in march of 2009. It was sort of a reverse Wimpy factor. Give me two hamburgers today for one tomorrow. We had a tremendous rally and I think there's a great digestive period that's likely to take place now. And it may continue. Once again, we frontloaded, at the federal reserve, an enormous rally in order to accomplish a wealth effect. I would not blame this [the 2016 selloff] on China. We are always looking for excuses. China is going through a transition that will take a while to correct itself. But what's news there? There's no news there.
Squawk Box: I guess the question Richard is: How ugly will it get? If you do see this big unwind of Fed Policy which fueled a 6 and one-half year bull market, what does it look like on the way down?
Fisher: Well, I was warning my colleagues, don't go [inaudible] if we have a 10-20% correction at some point. ... These markets are heavily priced. They are trading at 19 and a half time earnings without having top line growth you would like to have. We are late in the cycle. These are richly priced. They are not cheap. .... I could see a significant downside. I could also see a flat market for quite some time, digesting that enormous return the Fed engineered for six years.
Squawk Box: Richard, this digestive period, does it usher in an era where assets can't perform in the absence of accommodation?
Fisher: Well, first of all, I don't think there can be much more accommodation. The Federal Reserve is a giant weapon that has no ammunition left. What I do worry about is: It was the Fed, the Fed, the Fed, the Fed for half of my tenure there, which is a decade. Everybody was looking for the Fed to float all boats. In my opinion, they got lazy. Now we go back to fundamental analysis, the kind of work that used to be done, analyzing whether or not a company truly on its own, going to grow its bottom line and be priced accordingly, not expect the Fed tide to lift all boats. When the tide recedes we're going to see who's wearing a bathing suit and who's not. We are beginning to see that. You saw that in junk last year. You also saw it even in the midcaps, and the S&P stripped of its dividends. The only asset that really returned anything last year, again if you take away dividends, believe it or not, was cash at 0.1%. That's a very unusual circumstance.
Squawk Box: Richard. This has been an absolutely extraordinary interview. For you to come on here and say "I was one of the central bankers who engineered the frontloading of the banks, we did it to create a wealth effect" and then you go on and tell us, with a big smile on your face that we are overpriced, which is the word that you used, and there would be some digestive problems, are you going to take the rap if there is a serious correction in this market? Will you equally come on and say "I'm really sorry we overinflated the market", which is a logical conclusion from what you've said so far in this interview.
Fisher: First of all I wouldn't say that. I voted against QE3. But there's a reason for doing this. Let's be fair to the central banks. We had a horrible crisis. We had to pull it out. All of us unanimously supported that initial move under Ben Bernanke. But in my opinion we went one step too far, which is QE3. By March 2009 we had already bought a trillion dollars of securities and the market turned that week. To me, personally, as a member of the FOMC, that was sufficient. We had launched a rocket. And yet we piled on with QE3, but the majority understandably worried we might slide backwards. I think you have to be careful here and frank about what drove the markets. Look at all the interviews over the last many years since we started the QE program. It was the Fed, the Fed, the Fed, the European central bank, the Japanese central bank, and what are the Chinese doing? All quantitative easing driven by central bank activity. That's not the way markets should be working. They should be working on their own animal spirits, but they were juiced up by the central banks, including the federal reserve, even as some of us would not support QE3.
Mish Comments
Finally, but too late, we have a frank admission by a Fed governor explicitly stating some things that needed to be said.
The markets are seriously overvalued
The Fed purposely sponsored bubbles, specifically for the wealth effect
So here we are, back with another enormous bubble, on purpose, with the economy clearly weakening again.
The wealth effect primarily benefited the already wealthy, at the expense of everyone else. In the process, corporations are more debt-leveraged than ever before, and houses are not affordable for those most in need of buying them.
The process was entirely counterproductive, especially from QE3 on.
Domestic Car Sales Cap Record Year With Up (and Down) Month
US car sales are going to have a record year in 2015, clearly one of the bright spots in the US economy. Judging from revisions in construction spending, perhaps the only bright spot left besides very lagging jobs data.
"The Big Three are in and December sales are running below expectations, down about 5 percent from November vs expectations for a 1 to 2 percent decline. Car sales are especially weak with sales of light trucks down only slightly. The Big Three account for roughly half of all sales. Foreign brands will be posting their results through the session."
U.S. new-car sales accelerated through December as auto makers remained poised to report their highest annual sales ever, shattering the record set in 2000.
Car sales are on track for their best-selling month of the year and their best December ever.
General Motors Co. estimates the seasonally-adjusted annual selling rate for light vehicles was 17.8 million units in December and predicted 17.5 million vehicles were sold in the year, surpassing the 2000 record of 17.4 million.
Ford Motor Co. reported sales increased 8.3% to 237,606 vehicles for the Detroit auto maker's best December. Sales of F-Series pickups rose above 85,000 for a 10-year high, and Ford brand SUV sales saw their best December since 2003.
GM, meanwhile, logged a 5.7% increase to 290,230 vehicles as Chevrolet Silverado and GMC Sierra sales momentum continued through the final month of the year.
Sales Purportedly Up (and Down)
Can sales be up and down? Clearly not, so who is correct?
The answer is Bloomberg. The reason pertains to the number of selling days.
December 2015 had 28 selling days vs. 26 selling days in December 2014 according to JD Power.
November 2015 only had 23 selling days and only four selling weekends for the first time since 2012 according to JD Power.
Based on selling days alone, month over month car sales should be up 5/23 or 21.74%. They weren't. Other seasonal adjustments apply, such as the average December vs. the average November, but the bottom line is the reported month-over-month sales are not what they appear to be at first glance.
Despite the hoopla, December car sales are actually down vs. November. Moreover, sales are "especially weak", given "sales of light trucks are down only slightly".
In that article, I stated 2015 GDP would be revised lower. Some disagree.
For example, MarketWatch reports IHS Global Insight US economist Patrick Newport wrote in a research note "The upward revision to spending in 2014 is enough to raise growth that year from 2.4% to 2.6%-2.7%. The revisions are likely to boost growth for 2015 as well."
Let's investigate that claim with a look at the actual revised construction data as posted by the Census Bureau.
Note: Don't study this table too long. Instead, skip to the analysis and tables that follow.
Initially Reported vs. Revised - Seasonally Adjusted Data
Date
Total Construction
Total Residential
Total Private Construction
Private Residential
Previously Published
Revised January 4, 2016
Previously Published
Revised January 4, 2016
Previously Published
Revised January 4, 2016
Previously Published
Revised January 4, 2016
Oct-15
1,107,381
1,127,040
405,604
433,313
802,435
829,729
399,036
426,784
Sep-15
1,096,637
1,123,892
401,658
432,381
795,841
824,201
395,021
425,703
Aug-15
1,089,801
1,121,907
395,401
427,507
788,698
820,804
388,636
420,742
Jul-15
1,080,358
1,114,716
388,681
423,039
781,249
815,607
382,063
416,421
Jun-15
1,074,314
1,113,424
382,553
421,663
773,489
812,599
376,055
415,165
May-15
1,068,424
1,107,569
379,735
418,881
776,452
815,598
373,063
412,208
Apr-15
1,044,641
1,084,961
373,346
413,666
757,209
797,529
366,837
407,157
Mar-15
1,006,351
1,052,899
363,879
410,428
729,713
776,261
357,512
404,061
Feb-15
993,465
1,037,527
366,651
410,713
720,819
764,880
360,575
404,636
Jan-15
990,051
1,033,261
364,833
408,043
716,185
759,396
358,940
402,151
Dec-14
989,118
1,031,635
360,323
402,840
707,551
750,069
354,834
397,351
Nov-14
976,888
1,016,054
352,509
391,674
699,344
738,510
347,159
386,325
Oct-14
979,573
1,015,977
347,242
383,645
692,127
728,530
342,114
378,517
Sep-14
959,182
992,349
342,529
375,695
684,862
718,028
337,109
370,275
Aug-14
955,017
986,876
335,035
366,894
676,325
708,184
330,001
361,860
Jul-14
952,468
984,990
334,543
367,065
673,787
706,309
329,531
362,054
Jun-14
950,282
983,906
334,459
368,083
674,049
707,673
329,510
363,134
May-14
957,641
990,737
338,268
371,364
681,986
715,082
333,522
366,618
Apr-14
964,738
992,914
345,879
374,054
691,365
719,540
341,109
369,284
Mar-14
964,995
989,496
347,470
371,970
696,050
720,551
342,607
367,107
Feb-14
968,303
985,280
351,366
368,343
704,219
721,196
346,436
363,413
Jan-14
961,002
973,655
354,047
366,700
696,718
709,370
349,142
361,795
Construction Spending Revised Lower 7 Consecutive Months!
For two years, construction spending went up vs. previous reported data. The net effect is GDP did indeed rise more than reported in 2014. The flip side is 2015 GDP will be lower than previous reported.
To understand why, we need to look at month over month differences as compared to previously reported numbers. Let's take a look.
Total Construction Spending vs. Previous Reports
Date
Total Construction Spending
Previous M/M Increase
Revised M/M Increase
Difference
Oct-15
0.98%
0.28%
-0.70%
Sep-15
0.63%
0.18%
-0.45%
Aug-15
0.87%
0.65%
-0.23%
Jul-15
0.56%
0.12%
-0.45%
Jun-15
0.55%
0.53%
-0.02%
May-15
2.28%
2.08%
-0.19%
Apr-15
3.80%
3.05%
-0.76%
Mar-15
1.30%
1.48%
0.18%
Feb-15
0.34%
0.41%
0.07%
Jan-15
0.09%
0.16%
0.06%
Dec-14
1.25%
1.53%
0.28%
Nov-14
-0.27%
0.01%
0.28%
Oct-14
2.13%
2.38%
0.26%
Sep-14
0.44%
0.55%
0.12%
Aug-14
0.27%
0.19%
-0.08%
Jul-14
0.23%
0.11%
-0.12%
Jun-14
-0.77%
-0.69%
0.08%
May-14
-0.74%
-0.22%
0.52%
Apr-14
-0.03%
0.35%
0.37%
Mar-14
-0.34%
0.43%
0.77%
Feb-14
0.76%
1.19%
0.43%
Jan-14
0.11%
1.21%
1.10%
Total Residential Construction Spending vs. Previous Reports
Date
Total Residential Construction Spending
Previous M/M Increase
Revised M/M Increase
Difference
Oct-15
0.98%
0.22%
-0.77%
Sep-15
1.58%
1.14%
-0.44%
Aug-15
1.73%
1.06%
-0.67%
Jul-15
1.60%
0.33%
-1.28%
Jun-15
0.74%
0.66%
-0.08%
May-15
1.71%
1.26%
-0.45%
Apr-15
2.60%
0.79%
-1.81%
Mar-15
-0.76%
-0.07%
0.69%
Feb-15
0.50%
0.65%
0.16%
Jan-15
1.25%
1.29%
0.04%
Dec-14
2.22%
2.85%
0.63%
Nov-14
1.52%
2.09%
0.58%
Oct-14
1.38%
2.12%
0.74%
Sep-14
2.24%
2.40%
0.16%
Aug-14
0.15%
-0.05%
-0.19%
Jul-14
0.03%
-0.28%
-0.30%
Jun-14
-1.13%
-0.88%
0.24%
May-14
-2.20%
-0.72%
1.48%
Apr-14
-0.46%
0.56%
1.02%
Mar-14
-1.11%
0.98%
2.09%
Feb-14
-0.76%
0.45%
1.21%
Jan-14
-1.25%
1.69%
2.94%
4th Quarter GDPNow Forecast
The GDPNow forecast for 4th quarter is now down to 0.7% from 1.3% on December 23.
2015 GDP Will Decline vs. Previous Estimates: How Much?
The question is not whether 2015 GDP will rise vs. previous estimates, but rather by how much it will sink.
Let's start with the GDPNow forecast.
Of the decline since December 23, 0.5 percentage points came following the Census Bureau's release on construction spending and the ISM report, both on January 4.
I do not know how to separate ISM from construction, but the net result was as follows:
Nonresidential structures declined by 0.10
Residential declined by 0.14
PCE declined by 0.13.
That's a total of decline for those three components of 0.37 percentage points.
Part of that decline was based not only on revisions, but also on a month-over month decline in November construction spending of 0.4 percentage points.
If 3/4 of the decline in those components is due to construction spending, then I estimate third quarter GDP will be revised about .57 percentage points lower, second quarter .56 percentage points lower, and first quarter .21 percentage points higher.
Those are very crude calculations that may be wildly off the mark.
If accurate, first quarter GDP would be 0.0%, second quarter GDP 3.3%, third quarter GDP would be 1.4%. And if the Atlanta Fed model holds with no changes from here, fourth quarter GDP would be 0.7%.
In that case, 2015 GDP would be about 1.35% with the Fed hiking and GDP decelerating rapidly.
There's definitely something weird going on here with these celebrities.
The picture of the man looking identical to the infamous actor Nic Cage dates from around 1870.
To the left is a portrait of a man named Paul Mounet, who was born in 1847. He "died" in 1922 under mysterious circumstances, and his body was never found. Mounet worked as a scientist and then became an actor. There's speculation that he left the science field because he didn't want his immortality discovered. He instead faked his death and went into hiding.
John Travolta, who is a member of the Church of Scientology and believes in reincarnation, "appears" in an antique photo discovered by a collector in Ontario, Canada. The picture was taken 150 years ago, and it is on sale on eBay.
A photo from New York Public Library's Schomberg Center that was taken in Harlem in 1933 shows a man who looks an awful lot like famous rapper Jay-Z.
Matthew McConaughey has the same chiseled features of this Union officer.
Call it a bizarre case of time traveling — John Brown (r.) worked to abolish slavery in the mid-19th century, but Charlie Sheen has merely tried to abolish all forms of sanity. Nevertheless, the two look eerily similar to one another.
Pope Gregory IX in a fresco by Raphael & Rocky. One famously got bashed around the boxing ring, and the other was more used to having the ring on his finger kissed, but they look like identical twins, or it could it be...
The Portrait of Sebastián de Morra by Diego Velázquez is a painting of a court dwarf and jester in the court of Philip IV of Spain. It was created around 1645.
Conspiracy theorists are convinced by the evidence above that the Russian president may have been alive for more than a century.
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