ADP employment figures show surprising gain; Plus, the Fed says it will continue to dole out tens of billions of dollars for the foreseeable future
The ADP and government employment statistics don't always track each other. In fact, ADP has shown job losses in only two of the past seven months, while the Labor Department has reported six consecutive months of losses. But this could point toward a surprise on Friday, when the government is expected to report a July decline of 75,000.
In the other news of the morning, the Federal Reserve's ongoing bailout/support programs for banks and brokers will be extended. Can you imagine how incredibly surprised I am that these "limited, emergency" measures are proving to be anything but? Here's an excerpt from a Bloomberg story:
"The Federal Reserve extended its emergency lending programs to Wall Street firms through January after policy makers judged that markets are still too weak to go without a backstop from the central bank.
"The Fed also plans to give securities dealers options for tapping one of the loan programs to ensure financing through key dates, such as the ends of quarters, when funding needs can jump. Commercial lenders will be able to borrow from the central bank for a longer period, and the Fed boosted its swap line with the European Central Bank."
Also, here are some more specifics on the move:
"The central bank also will start selling 84-day loans to commercial banks under the Term Auction Facility beginning next month, in addition to the sales of 28-day loans that have occurred since the program began in December. The biweekly sales will alternate between auctions of $75 billion in 28-day loans, and $25 billion in 84-day loans.
"The Fed is planning the TAF sales to keep the program at $150 billion and released a schedule indicating it will remain at that size through November.
"In related moves, the European Central Bank and Swiss National Bank are also extending their operations to include auctions of 84-day funds, the Fed said in a press release. The Federal Open Market Committee authorized an increase in the ECB's swap line with the Fed to $55 billion from $50 billion; the SNB's swap line is unchanged at $12 billion. The swaps are authorized through Jan. 30."