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Currently the Dow is up 72 and mortgage bonds are down 47 basis points, bringing rates up by about .125% following the better-than-expected Bureau of Labor Statistics jobs report showing 67,000 new private sector jobs in August, positive revisions for July, and 763,000 new private sector jobs in 2010. Commentary and charts below.

The BLS report showed that the economy lost 54,000 non-farm jobs in August which reflects the fact that 114,000 government census workers have now completed their work. Actual new private sector jobs were 67,000 for August and 763,000 for 2010. Estimates called for a loss of 120,000 non-farm payrolls, much more than the actual 54,000 loss, and this disparity is why the market reaction is good for stocks and bad for rates. BLS also reported that 14.9 million people are unemployed. This is a 9.6% unemployment rate, up 4.7% since the recession began in December 2007. See charts and more commentary on the U.S.’s 8.9m involuntary part-timer workers below. more…

Here’s some dark Monday humor as we head into a week that’s likely to confirm dropping home prices and rising job losses. Andy Samberg’s cocaine-addled character sings about how it’s going to be a great dayyyyyyy … as long as he gets plenty of stimulus. If the U.S. economy was a person, it might very well be this man.

This post debunking the myth of deleveraging in the U.S. economy was on ZeroHedge yesterday and was written by Jim Quinn of TheBurningPlatform.com. It’s a must-read for anyone who’d like to test the credibility of financial chatter on TV. Here’s a couple of excerpts and two key charts, and go read the full story for some great commentary on mainstream financial media:

Below is a chart that shows total credit market debt as a % of GDP. This chart captures all of the debt in the United States carried by households, corporations, and the government. The data can be found here. During the Great Depression of the 1930′s Total Credit Market Debt as a % of GDP peaked at 260% of GDP. As of today, it stands at 360% of GDP. The Federal Government is adding $4 billion per day to the National Debt. GDP is stagnant and will likely not grow for the next year. The storyline about corporate America being flush with cash is another lie. Corporations have ADDED $482 billion of debt since 2007. Corporate America has the largest amount of debt on their books in history at $7.2 trillion. more…

Currently the Dow is down 120, S&P is down 15, and mortgage bonds are up 25 basis points, bringing rates down by about .125% following the Bureau of Labor Statistics report showing only 71k private payrolls were added to the U.S. economy in July, and June was revised down 100k. Additional commentary and charts below.

The BLS non-farm payroll report showed that the economy lost 131,000 jobs in July which reflects the fact that 143,000 government census workers have now completed their work. Actual new private sector jobs were 71,000 for July and 630,000 for 2010, most of which was in March and April. Estimates called for 87k total jobs lost (instead of 131k), and this disparity is why the market reaction is bad for stocks and good for rates. BLS also reported that 14.6 million people are unemployed. This is a 9.5% unemployment rate, up 4.6% since the recession began in December 2007. See charts and more commentary on the U.S.’s 8.5m involuntary part-timer workers below. more…

The third of three 1Q2010 GDP readings came in today at 2.7% which makes the final reading .5% lower than the initial reading, and it’s now even more significantly lower than 4Q’s +5.6% reading. Stocks lost ground and mortgage bonds rallied on the news, which helped mortgage rates hold onto record lows. The consumer spending component of GDP was 3%, also down .5% from previous readings, but is still above the +1.6% in 4Q. With this final 1Q10 number, we’ve now had three consecutive quarters of GDP growth—following four consecutive quarters of economic contraction (a 60yr record for consecutive GDP declines). As for the consumer spending component of GDP, we’ll get another read on that Monday when the Personal Income & Outlays report is released. All GDP figures are ‘real’ or inflation-adjusted. The last 10 quarters of GDP are at the bottom of this post, and you can also visit our Data section to see historical GDP figures, graphs and download data.

As of November 25, 2008, -0.5% GDP was the largest quarterly decline since the tail end of the last recession in 2001. Six days after that release, the NBER declared a recession had been in effect since December 2007 and also countered the popular definition of recession as two consecutive quarters of negative GDP growth, saying that they evaluate many factors in addition to GDP. This falls well in line with the beginning of the credit crunch in August 2007 and the multi-layered factors that have led to the recession that’s lasted 2.5 years. Recession beginnings and endings are always officially called after the fact, and while 4Q09 and 1Q10 GDP suggest a recovery, 9.7% unemployment suggests otherwise. Here is the press release for today’s figures, and below are all quarterly GDP readings for the last 2.5 years. more…

Moody’s Cuts Greece To Junk
Moody’s cut Greece’s credit ratings to junk status (Ba1). Greece has been downgraded to non investment grade and Spain cannot seem to find any funding to rescue its savings banks. Of course, the rate on any fixed income security tied to Europe has gone up to compensate investors for the risk, and prices have dropped. The risk of owning Europe’s corporate bonds is the highest on record relative to U.S. company debt. The 12-month bill, which paid an average yield of 2.303 percent after 1.59 percent in the same auction in May, and the 18-month, which gave 2.837 percent, up from 1.951 percent, were seen as litmus tests for a more important 10- and 30-year bond auction tomorrow. Even France raised its retirement age from 60 to 62, sparking protests – although it won’t happen until 2018.

Of 33 Recessions Since 1854, Only 3 Double-Dips
Fortunately US recessionary “double-dips” are exceptionally rare. There have been only three episodes in US business cycle history when the economy lapsed back into recession within a year of the previous recession ending: 1913, 1920, and 1981. (Since 1854 there have been 33 recessions and only three instances when the economy lapsed back into recession within 12 months of exiting the previous downturn.) So this, combined with the fact that US exports to the Euro Zone only account for about 1% of our GDP, lead smarter minds than mine to believe that any chance of a double dip are minimal. more…

FBI Could Arrest Hundreds For Mortgage Fraud
This week the the FBI could arrest hundreds for mortgage fraud. Charges are expected to be leveled over offenses ranging from pushing borrowers to lie about their income on mortgage applications to providing homeowners with false information about foreclosure rescue programs, the newspaper said.

How Analysts Will Research Mortgage Bond Funds
Federal Housing Finance Agency (FHFA) regulations will soon require additional Loan Originator Identifiers on all Agency loans. In compliance with FHFA, on all apps after July 1, information on loans will also include Loan Originator ID and Loan Origination Company ID. There is some state-by-state variance with this. But for the Nationwide Mortgage Licensing System (NMLS), no action is required “of any mortgage loan originator who is an employee of a federally insured depository institution or an owned and controlled subsidiary of such a depository institution that is federally regulated.” As this trend takes shape, it should help mortgage analysts do better research on mortgage bond pools by being able to research the firm and the specific loan agent that did the loan(s). more…

3-Week Rate Dip Ends On China’s European Commitment
After enjoying a multi-week rally that brought mortgage rates to record lows since the Greek bailout-induced stock crash May 6, mortgage bonds are down significantly today (currently -44 basis points). As of now rates are up about .125% with mortgage bond pricing suggesting worse if today’s trading holds.

Stocks are the beneficiary of this mortgage bond selloff, with the Dow up 205 and the S&P up 25. The main catalyst was an announcement that China would continue to support and invest in Europe, and Europe fears have driven stock decline and bond rallies for the past three weeks—China’s announcement has reversed this pattern today. Also paltry Treasury auctions this week have added to supply concerns that are also adversely affecting mortgage trading. And finally, the second of three 1Q2010 GDP readings came in today at 3%, which is 0.2% lower than the first reading, and meaningfully lower than 4Q’s +5.6% reading. More on GDP below. more…

Another massive $100m+ art heist was just pulled off clean in Paris. The prize: a Picasso, a Matisse and three other masterpieces. Can people who do this move art in the circles they run in? Probably. Or maybe they just do it for the thrill. Either way, everyone loves a good caper, so we’re just letting you know. Here’s more Great Recession era caper stories.

The first of three 1Q2010 GDP readings came in today at +3.2%, lower than 4Q’s +5.6% reading but still seen as a positive economic growth number, especially since consumer spending was +3.6% vs. +1.6% in 4Q. Last quarter, it became official that we’ve had two consecutive quarters of GDP growth—following four consecutive quarters of economic contraction (a 60yr record for consecutive GDP declines). Now this advance number adds to that trend. Other key contributors to positive GDP reading (besides consumer spending) were private inventory investment, exports, and nonresidential fixed investment. These were partly offset by decreases in state and local government spending and in residential fixed investment.

Also this morning the DOJ announced a criminal investigation into Goldman Sachs for it’s mortgage securities practices. Mortgage bonds are currently up about 15 basis points which means slightly better rates. The solution to Greece’s debt problems is still being hammered out but that uncertainty (plus S&P’s downgrade of Greece and Portugal bonds Tuesday) have also caused mortgage bonds to rally and push rates down. As for the consumer spending component of GDP, we’ll get another read on that Monday when the Personal Income & Outlays report is released. All GDP figures are ‘real’ or inflation-adjusted, and the next GDP reading for 1Q10 will come on May 27. The last nine quarters of GDP are at the bottom of this post, and you can also visit our Data section to see historical GDP figures, graphs and download data. more…