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I am starting a new series at Wall St. Cheat Sheet called “Rewarding Failure.” Given the amount of rewards going to failures, it should be a perpetual series …

This is the time of year when banks either shower stacks of green onto 100-hour-a-week workers, or dump lumps of coal on excessive ambitions. Ironically, this year’s bank bonus season is rumored to rival that of the roaring bubbles. The question: with U6 unemployment at 17.3% and taxpayers mortgaging the future of the country to save a financial gambling scheme gone awry, exactly why are failures being rewarded?

First, not every broker or ibanker is a failure. Nor was everyone in finance involved with the Three-Card Monte scams in the credit and housing markets. I truly feel sorry for those hard working individuals who have served their companies in an honest and beneficial manner.

With that said, the future of the US is in a deep pile of dirty diapers if we willingly and knowingly continue to destroy capitalism by rewarding the behavior of failures. Plainly, if there are hundreds of thousands of bonus dollars to be made working for companies which legally cripple the United States of America, the best and brightest will continue to divert career paths from engineering, science, mathematics, humanities, etc in favor of the super fat paydays at mortgage brokers who lend without documentation, insurance companies which “insure” debt defaults yet have no collateral to pay, and other financial institutions which play intellectual games to divert resources and capital away from its most beneficial use to our society.

On this note, I must respectfully disagree with one of my favorite writers, Michael Lewis. In Lewis’s article “The End,” he argued 2008 marked the end of an era on Wall Street. Lewis asserted that:

I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents’ world when you can buy it, slice it up into tranches, and sell off the pieces?

At some point, I gave up waiting for the end. There was no scandal or reversal, I assumed, that could sink the system. Then came Meredith Whitney with news …

Well, as the current bank bonus season proves, Lewis will keep waiting. Unfortunately, rather than Whitney’s comments marking the end of an era of excess, I think we merely had an intermission so the scammers could hit the Lou and regroup.

Ladies and gentlemen, after a couple brief years of “Where’d all the zeros go on my bonus check?”, Wall Street has a new Cash Money Army. The ballerz are back and the 7,000 lb. bronze bull is still standing on lower Broadway.

In the coming weeks, banks and finance firms will report earnings. The taxpaying public and 17.3% unemployed will stare at those naked SEC filings that disclose employee pay at the institutions which literally water-boarded the economy.

This, my friends, is nothing short of watching failure get rewarded. And, if capitalism is supposed to help us efficiently distribute capital to the best possible use, then we are succeeding in the creation of an anti-capitalist economy.

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The 4-week moving average for initial jobless claims is at its lowest point since September of last year, according to data from the Labor Department reported today.

The number of people filing for state jobless benefits for the week ending January 2, 2010 is 434,000, up 1000 from the prior week.

The data is further evidence that the pace of job layoffs is slowing, but whether this translates into new jobs for the US labor market remains to be seen.

This post is by Tyler Durden from Zero Hedge.

When you have your back against the wall, and the only thing at your disposal is the Fed’s money printer on loan, what do you do? Well, if you are the Treasury, you let money rain. Literally. In December, according to the Financial Management Service, the US Treasury dispensed a stunning 69.5% more in Social Security Outlays and Unemployment Insurance on a year over year basis: the administration knew all too well it could not afford to let this holiday season go to waste. So, after averaging at $43.6 billion in monthly outlays, Social Security withdrawals from the UST surged by a unprecedented 48.6% in December to a whopping $69.5 billion. This is not a volatile or seasonal series.

Combine the previously discussed abnormal spike in unemployment insurance, and you get the following chart:

On a month-over-month percentage change basis, the combined December number is stunning: a 69.5% increase in Treasury spending to boost consumption no matter what the price.

So when everyone is discussing the amazing holiday retail season (which wasn’t really that amazing, and was just a little over a 1% improvement compared to last year), will anyone take the time to normalize for monthly “stimuli” in the form of excess SSN and Unemployment payments? We didn’t think so. We are confident that were someone to do that, it would disclose yet another insidious way in which the US Government is directly and indirectly subsidizing the economy, in an ever more failed attempt to boost consumer confidence of the ever more defunct American middle class.

h/t Mike

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The U.S. Dept of Labor reported today that initial jobless claims for the week of Dec 26 fell slightly to 438,000 from the prior week’s revised figure of 454,000. Continuing claims (reported for the week of 12/19) remained essentially unchanged at 4.981 million from the revised figure of 5.038 million for the previous week.

Today’s report suggests the job market continues to stabilize. Claims for emergency unemployment compensation (for week of Dec 12), however, totaled 4,448,914, an increase of 191,669 from the prior week. There were 1,567,930 claimants in the comparable week in 2008.

States reporting the highest unemployment rates include: Alaska (7.4 percent unemployment), Oregon (6.1), Puerto Rico (5.8), Wisconsin (5.6), Michigan (5.5), Idaho (5.4), Montana (5.4), Nevada (5.4), Pennsylvania (5.4), and California (5.3).

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This is a guest post by Tyler Durden at Zero Hedge.

The number you won’t hear mentioned anywhere in the Mainstream Media: 327,729. That is how many people shifted to Emergency Unemployment Compensation programs in the last week alone, hitting an all time record high of 4.2 million! So as everyone is focused on the benign picture of initial claims in the last week which was “only” 474,000, the number of people rolling off continuing benefits has exploded and is now a stunning 592,579 only in the last two week. Look for this number to keep going into the stratosphere as the 6 month continuing claims cliff keeps getting hit by more and more people who are unemployed and keep looking not only for believable change, but actual jobs to go with it.

And here is the chart that the administration would love to keep under lock and seal: the cumulative number of people on Emergency Insurance. At this rate those collecting EUC will surpass those on continuing claims (5.5 million) within a month.

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Nonfarm payroll employment is holding steady in November after several months of declines, according to the latest batch of economic reports released today from the Bureau of Labor Statistics. Nonfarm payroll employment remained essentially unchanged (-11,000) for the month of November after average declines of 135,000 for the previous three months.

The unemployment rate dipped slightly to 10.0 percent from last month’s 10.2 percent, showing 227,000 more employed persons but leaving 15.4 million people still unemployed. An additional 291,000 workers stopped looking for work in November, however, bringing the total of nonactive job seekers to 2.3 million.

The number of long-term unemployed (those jobless for 27 weeks or more) rose by 293,000, providing more evidence that jobs are leaving town for good. The long-term unemployed now stands at 5.9 million. The number of part-time workers remains unchanged for November.

The economy continues to pare manufacturing jobs at the highest rate with business service jobs showing the biggest increase.

Average workweek hours edged up 0.2 percent in November, slightly more than expected; hourly earnings increased 0.1 percent, slightly less than expected.

This is a guest post by The Golden Truth.

“There will be two social classes of American in the future:  those who sell their U.S. dollars today and buy gold and silver and those who buy into the false hope of an economic recovery.”

I suspect that there is a lot of factual information and news reports in this 30 minute documentary that most people who view this video have not seen.  Some of the best footage is of Congressmen grilling Banana Ben Bernanke under oath and his obvious discomfort with the questions and, for those who know the facts, his obvious lies.

“Eventually this dollar is going to stop working and everybody is going to know what poverty is all about.”

“Unfortunately, those who buy real estate this time around will get slaughtered.”

Consider this video as yet another huge warning shot directed your false sense of well-being.  And also consider that in Weimar Germany, over 80% of Germany’s citizens clung to the false hope of their national currency and held onto the (Renten)mark until it was completely worthless by late 1923.

Presented by the National Inflation Association:

“Those who cannot remember the past are condemned to repeat it.” – George Santayana, poet and philospher.

Consider that during the course of this decade, gold and silver have both appreciated well over 450% against the U.S. dollar.  This is without the benefit of perceived inflation and without most large institutions and small investors participating in the “stealth” bull market.  Imagine what will happen to gold and silver when serious inflation hits the system, as a result of the catastrophically reckless fiscal and monetary policies being imposed upon us by the Federal Reserve and our Government … GOT GOLD?

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Lately, I continue to see layoffs popping up in the news on a very consistent basis (again). So, I put together a list of company names and their recent layoff announcements right here as a one-stop-shop to showcase the fact that these people, who are consumers in the global economy, will be very worried about their future come Holiday time.

Ben Bernanke said recovery? I still smell recession …

Since November 1st, 2009, here are the major layoff announcements which hit the wires:

-Applied Materials (Nasdaq: AMAT) to cut 1,300 to 1,500 jobs;

-AOL (TWX) lays off 100 employees ahead of spinoff ;

-Adobe (Nasdaq: ADBE) to cut about 680 full-time jobs;

-Electronic Arts Inc. (Nasdaq: ERTS) said it is cutting 1,500 jobs, representing about 17 percent of its work force;

-Toyota Motor Corp. (NYSE: TM) is shutting 300 dealerships in Japan over the next three years;

-Lloyds Bank (NYSE: LYG) is cutting or moving 5,000 more jobs;

-Sprint (NYSE: S) plans to cut up to 2,500 jobs;

-Daimler (NYSE: DAI) to cut 1,000 jobs in Germany;

-HSBC cutting 1,700 jobs in the UK;

-Paper maker UPM to lay off 870 workers in Finland;

-Nokia Siemens Networks (NYSE: SI) to lay off up to 5,700;

-RBS (NYSE: RBS) to cut 3,700 jobs in their UK branch network;

Cost-cutting is good for a company’s bottom line, but it does not support the all-important consumer who contributes to shopping at retail, paying their mortgage, and sustaining their monthly expenses. These numbers indicate people all over the world will be requiring more help from the government, therefore increasing deficits.

If I’ve missed some job cut announcements you have seen, feel free to leave a comment and let me know!

Disclosure: No positions in the companies mentioned.

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This morning the Bureau of Labor Statistics reported a deeper than expected disappearance of jobs (-190,000 vs. -150,000 expected) in October, bringing the total number of statistically unemployed people to 15.7 million. Moreover, the total number of underemployed people reached the highest level since 1995 at 17.5%.

The new data reveals 5.6 million Americans have been without work for over 6 months. This is a record breaking 36.5% of the total unemployed pool.

The only bright spots in the report were jobs added to health care and education (+45,000) and professional and business services (+18,000).

Although the economy and markets will improve before businesses start employing more people, the incredibly large number of underemployed will tamper any recovery as new job openings are not likely to increase fast enough to mop up those without an income. Further, the holiday shopping season is destined to disappoint investors and children alike as personal disposable income promises to be much lower than last year.

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