Unemployment Benefits Unexpectedly Rose Last Week -- Reuters; Thursday, March 3, 2016

US Initial Jobless claims: 278,000; up 6,000. Now at 278,000, vs consensus of 270,000. The forecast was for a drop from the previous week. Actually increased. Four-week average drops to 270,250 due to anomalies a few weeks ago. The spin begins, starting with the AP: weekly applications rise but remain near historic lows. That's not the point. After trillion in stimulus and six yeas into a recovery we shouldn't be seeing a jump of 16,000 claims in the past two weeks.

The Reuters spin:

The number of Americans filing for unemployment benefits unexpectedly rose last week, but the underlying trend continued to point to a strengthening labor market.

The headline: "trend points to firming labor market." LOL. This is the same line Reuters has used for the past several years.

*********************************

The Hillary Defense

USA Today is reporting that Volkswagen did not think the scandal would not cost that much. Really? LOL.

"It was expected that the diesel matter could be resolved with the U.S. authorities by disclosing the software modification, agreeing on appropriate measures to restore vehicle compliance with the law and the payments of potential fines in line with prior U.S. settlements."

Sort of the Hillary defense. What does it matter?

*********************************

Inexplicable

Some have called the Saudi decision to open the spigots in October, 2014, a trillion-dollar mistake. According to Business Insider, Saudi Arabia had about $750 billion in the summer of 2014, but by the end of December, 2015, was down to around $600 billion. That's a $150 billion shrinkage.


Reuters is reporting that Saudi Arabia is shopping the global markets for a $10 billion loan.

$10 billion?

They have $600 billion in the bank. Their reserves have decreased $150 billion in the past year. Some say they made a trillion-dollar mistake, and here they are, looking for a $10 billion loan. It makes absolutely no sense. Yes, Apple, Inc. has also done this: with billions in cash, Apple has taken out additional loans, but Apple is a "business" and borrowing money could not have been less expensive. In addition, Apple had a stellar balance sheet and a top credit rating. Saudi's credit rating is slipping.

But $10 billion is a drop in the oil bucket relative to the other numbers. 

But the graph at the linked site is striking. Prior to October, 2014, Saudi's cash reserves continued to build. The decline began slowly, but wow, the decline was striking in late 2015.

*************************************

Sports Authority

Bankrupt and closing 140 stores.  I assume too much competition?

The company has 14,500 full- and part-time employees at its 450 stores and its offices, according to the bankruptcy filing. Nearly two-thirds of those workers are part-time. It also disclosed more than $1 billion in liabilities and assets valued between $500,000 and $1 billion. 

When the company was bought by a hedge fund 10 years ago, it was the largest sporting goods retailer. But it has struggled with the debt load associated with a leveraged buyout a decade ago. It has been overtaken by Dick's Sporting Goods, which has grown by providing a more high end shopping experience. 

High end: Dick's.

Low end: Wal-Mart.

End: Sports Authority

*************************************

Grocery Discounter Grows

This will be an interesting story to follow: Aldi is growing in America and expected to surge in the next few years. Already in the UK:

Aldi and rival discounter Lidl have upended the grocery market in the UK, forcing the nation's largest supermarkets to dramatically cut prices and lay off workers to stay competitive.