"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Friday, September 4, 2009

Unemployment Jumps to 9.7% but...

Morning Miners!

It is 5:26 AM, I've got my cup topped up with some delicious Raine's TGIFLDW coffee (Thank God It's Finally Labor Day Weekend!). The Labor Department's Jobs Report is coming up in a few minutes, I'll be right back.

Hmmm...a bit mixed buckaroos. Entering our twentieth month of job losses, unemployment jumped to 9.7% (that's not good) but total jobs lost in August is less than expected (216,000 versus 230,000, that's less bad). But...the June and July numbers for job losses were 50,000 more than previously reported (euphemistically called an "up revision" by government number crunchers). Hey, if one person loses a job, that's not good!

CNBC Business News tries their best to make these monthly trips to the economic dentist as painless as possible. For those of us that get up before the chickens to watch this nonsense, the lovely Becky Quick reads the Jobs Report and this time was joined by Australian Business News anchor, Amanda Drury. Her "down under" accent is akin to the songs of morning birds. All very pleasant.

The comments by the commentators are, of course, less pleasant: "sea of lesser negatives", "worrisome numbers" and "horrific to obvious improvement". I think without Becky and Amanda hosting these early shows, folks would throw bricks at their televisions.

So what does this all mean? Losing 216,000 jobs a month is certainly better than 750,000 at the beginning of the year. The new buzzword this moning is "trajectory." Some analysts see an improved "trajectory" to zero job loss. That's encouraging but it is hard to feed your family trajectories.

Dr. Mohamed Abdulla El-Erian was Becky and Mandy's VIP guest this morning. He is the CEO and co-CIO of PIMCO, the world’s largest bond investor with $850 billion of assets under management. He is credited with the "sugar high" analogy to the present economic times which has become another news buzzword. According to the good Doc, 2009 should close with a "nice bounce" due to stimulus but then 2010 becomes the rough crash from the sugar high. El-Erian sees the recovery as having three stages: stimulus, rebuilding of inventories and demand. If strong demand does not return in 2010, watch out. Since 10 trillion dollars of our 14 trillion dollar economy rely on the consumer, a weak consumer translates to weak growth. If you're not employed, you're not consuming (as much) and El-Erian believes this is aggravated by "lacking credit in the recovery".

OK, OK, enough already! Returning to our "sugar coated bouncy" phase we see the markets are up this morning, gold is down and the gold miners are retreating a bit from a spectacular 2-day run. Duke and the film crew are back from their prospectin' adventure with no gold in their saddle bags. Given today's news, they will return to filming "The Long Dusty Trail" when we return from Labor Day (what is this?).

Have a great holiday buckaroos and don't let any economists come into your campground!

Enough talk, Becky and Mandy will help us walk the walk:

CAUTION: 4-WD ON, Off-Road Market Conditions Ahead

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what is this?)

Oil is down $0.45 in early trading to $67.51 (October contract); Gold is down $7.3 to $990.4 (December contract, most active); Silver is down $0.245 to $16.045 (December contract); Copper is down $0.0115 to $2.8535 (December contract); Molybdenum holds at $17.00.

The DOW is up 27.13 points to 9371.74; the S&P 500, up 4.38 points to 1007.62. The miners are mixed:

Barrick (ABX) $39.31 down 0.56%
Newmont (NEM) $45.55 down 0.48%
General Moly (Eureka Moly, LLC) (GMO) $2.83 up 0.71%
Freeport McMoran (FCX) $64.63 up 0.23% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are down, (a "tell" for General Moly):

Nucor (NUE) $44.02 down 0.11% - domestic steel manufacturing
ArcelorMittal (MT) $35.11 down 0.06% - global steel producer
POSCO (PKX) $92.46 down 0.45% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is down 0.34% to $1,123,337.52 (what is this?).


Colonel Possum

Headline Photograph by Mariana Titus

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