Even JPM’s CEO, Jaime Dimon, is on his conference call this morning throwing out his estimate for US unemployment Armageddon – do people actually think the man modeled the numbers himself? I certainly hope he tried … using the JPM analyst projection of yesteryear would be reckless…

The crutch of “the economic crisis” is being used all over corporate America – “its happening to everyone… it’s not our fault… pay me my bonus for outperforming on a relative basis”… “but let me set the expectation by which I need to outperform”…

Those who were blind to the realities of today all of a sudden think they see the light of consensus proactive prediction. They are predicting that it “gets worse from here.” It’s all so embarrassing and sad all at once. Until we unload this groupthink culture that corporate America has levered herself up long with, this country is going to remain in a Crisis of Credibility.

Initial jobless claims for the last week registered at 524,000, up from the prior week’s level of 470,000 (an upward revision from the initially reported 467K) and above the four week moving average of 519,000. The fact of the matter is that these weekly numbers are bad, but not worsening from their November-December peaks. The sequential acceleration of job losses is slowing.

As the world’s prices churn, so will expectations. If we get one more week of a jobless claims number that’s below those of 2008’s peak (see chart), I think we can proactively look forward and begin to predict a better January employment report than is currently expected.

Jaime Dimon, after all, is one of many setting expectations abominably low.

Keith R. McCullough
CEO & Chief Investment Officer