We can now say the US markets are at levels not seen since 1996.  The S&P500 futures lost 46.4 points or around 6% over this last week.

The lows for the US came on Thursday, on Friday it looked like it was going to finish lower but a rally in the last hour or so meant a positive finish (just).  The Non Farm payrolls came in close to expectations with a loss of 651,000 jobs for February.  The talking heads were quick to point out this was an improvement on the January figure of 655,000 jobs lost, but when the January figure was published this time last month it was only 598,000.  The losses for January were revised by another 57,ooo jobs lost!! They were out by almost 10%.

For the 4 weeks on February the initial unemployed figure published each Thursday was well over 500,000 per week. So my question is, if there were around 2 million initial unemployed in February, how come there were only 651,000 jobs lost?   More seasonal adjustments? 

In part the sudden increase in the unemploment number to 8.1% when the market was only expecting 7.9% could explain some of the missing people from the non farm number.  It was the increase in the “offical” unemployment figure that upset the market.  More unemployment means more delinquencies in mortgage and credit card payments, which in turn feeds that downward spiral I mentioned in my last post.

On the UK front the news is that the Lloyds Banking Group cedes control to the Government.  Lloyds is the UK’s biggest mortgage lender and has about 260 billion pounds of risky assets on it books. Most of those risky assets came from the government brokered takeover of HBOS Plc.  Lloyds is the fourth bank in the UK to cede control to the government.

This week the market will be waiting for the retail sales number to come out on Thursday and on Friday the preliminary Michigan Sentiment report for March