MONDAY, MAY 5, 2008

UP AND DOWN WALL STREET  

Work of Art

By ALAN ABELSON

THE GOOD THING ABOUT THE THREE CANDIDATES FOR THE PRESIDENCY is that none is a hair-trigger type who leaps to a conclusion before carefully digesting all the facts. We find that habit of measured response enormously reassuring, since one of the trio may have the fate of humanity thrust into his or her hands.

The last thing we want, after all, is some hothead in the White House whose reaction to anybody sticking his tongue out at us is to nuke 'em as fast he or she can press the red button. Such a grave decision ought to be made only after consultation with advisers and a careful mulling of all the options available.

Our calculation is that, worst case, the interval devoted to such prudent reflection between the insult being rendered and dropping the bomb wouldn't run more than 15 minutes max, since it's a given that the advisers, their brows furrowed as they think deep thoughts about their next meal, are chosen strictly on the basis of how fast they can shout "great" to anything the president says, including, "It's a nice day, if it doesn't rain."

The delay in exacting retribution, we submit, would be 15 minutes (max) well spent to gain the approval, perhaps, even the admiration, of the rest of the world for our remarkable restraint.

But, you may well ask, what makes us so confident that Messrs. McCain and Obama and Ms. Clinton possess the requisite patience to arrive at a considered decision on a matter of great consequence, no matter how severe the provocation?

Pure and simple, what convinced us was not their campaign blather or the endless stream of white papers about where they stood on the issues -- which only proved their dire need of a global-positioning system -- nor how cool they were or failed to be in the heat of debate. Rather, it was hard evidence furnished by their actions that revealed to us a becoming inclination to fully weigh the pros and cons before rendering a definitive opinion.

It took Mr. McCain, for example, five long years, when he could have been learning the difference between Sunni and Shiite or reading Proust from beginning to end, to arrive at the conclusion that the famous "Mission Accomplished" banner, hung on an aircraft carrier to congratulate Mr. Bush on the short and sweet end of the Iraq War, was somewhat premature.

And in a model display of serious deliberation, Mr. Obama spent 20 years most every Sunday dutifully listening to a reverend ranting on about this, that and the other thing, before he discovered that Mr. Wright was really Mr. Wrong.

Not to be outdone, Ms. Clinton, after a decade of moaning about a vast right-wing conspiracy, decided that the conspirators had merely been exercised about the unsavory appetites of her Pinocchio husband when he happened to be the nation's chief exec, and deep down were good old boys, especially if they were able to put you on TV or owned a newspaper.

There is a danger, we suppose, that all three of these presidential hopefuls, once elected, might be so predisposed against impulsively rushing to judgment that they would spend their first four years in office fruitlessly dithering and the next four years brooding over why they never accomplished anything in their first four years.

Still, after eight years of a president who never hesitated to make a decision but just couldn't seem to quite get the hang of making the right one, dithering doesn't sound all that bad.

NO NEED TO WAIT FOR THE LAST BALLOT to be counted -- it's all over but the shouting. This is not -- repeat, not -- a prediction about the outcome of the election or even the pillow fight between Hillary and Obama. We're talking instead about something much more important, namely, who'll get the Pulitzer Prize for Fiction.

The winner hands down, we fearlessly forecast, will be that brilliant narrative confected by, of all people, the Bureau of Labor Statistics, and published just last Friday under the deceptively bland title "The Employment Situation: April 2008." Although we're loath to deprive you of even a modicum of the thrill of devouring this marvelous work of magic realism by revealing too much of its contents, rest assured it's carefully designed to leave you with a comfy feeling in these rather trying times.

No doubt you've already gleaned the beaming news that instead of the 75,000-80,000 or even greater job losses and higher unemployment rate that the soothsayers were prognosticating, payrolls last month were trimmed by a much more modest 20,000, and the unemployment rate dipped to 5%, from 5.1%. Hallelujah! It's such a happy contrast to those nasty expectations and to the 81,000 jobs that vanished in March.

What makes the report all the more extraordinary is that it comes in the face of otherwise dismal dispatches from the employment front. Layoffs last month, according to Challenger Gray & Christmas, the placement firm, tallied 90,015, a hefty 68% greater than in March. New claims for unemployment insurance in the last full week in April rose to 380,000, from 345,000 the week before, while continuing claims topped the three million mark. Monster, the online want-ad outfit, reported a 6% drop in its April index compared with the same month a year ago, and the Conference Board's help-wanted index sagged to a new low while its measure of employment opportunities showed, not surprisingly, jobs are ever-harder to come by.

The BLS report, then, was like a burst of sunshine dispelling the gloom. So we take this occasion to tip our hat to the bureau's artistry in being able to fashion a comparatively heartening picture of the job market out of some very unpromising raw material. The populace, as recent soundings make clear, is plenty uneasy and disgruntled about the stumbling economy, feeling the pinch and worried about a paycheck; so anything that can provide a lift to sagging spirits is more than welcome.

Actually, the praise really belongs to the unknown (at least to us) and certainly unsung numbers-bender who crafted the so-called birth/death adjustment, supposedly created to capture the additional jobs of firms too new to be captured by the survey. As it has demonstrated time and again, it's much more a product of the imagination than of dull data, as, of course, any worthwhile work of fiction is.

We have on occasion pointed out the contribution the birth/death adjustment has made to the payroll total, but we have trouble remembering when the additional slots it conjured up were anywhere near as massive as they were in the April reckoning, when it "generated" 267,000 jobs. Put another way, ex the adjustment, last month's job loss would have ballooned to 287,000. Bit of a difference, eh?

Just one illustration points up the, shall we say, peculiarity of what the BLS adjustment has wrought. According to the birth/death model, 8,000 jobs were added in April -- are you sitting down? -- in the financial sector. Which, we assume, will come as a stunning surprise to the gosh knows how many poor souls who have been laid off by the banks, the brokerage houses and the rest of the not-very-robust financial fraternity. Must be something really wrong with our vision, moreover, since new firms in that sector appear to be conspicuous by their absence.

As Philippa Dunne and Doug Henwood, the very bright bulbs who run The Liscio Report, point out -- though they usually view the birth/death model more kindly than we do -- among the stranger additions made via its agency in the April report was the 45,000 to construction jobs. (In case you've been vacationing on the moon, construction is not exactly booming.)

They also suggest that the 83,000 new slots supposedly created in the leisure and hospitality field is definitely suspect. "With vacation plans at near-record lows and restaurants reporting reduced traffic," they feel many of these supposed job gains could simply disappear come the next benchmark revision.

After reviewing the defects in the household version of last month's employment trends, Philippa and Doug warn, "given all its internal blemishes," it would be wrong to conclude from the April report that the economy and the job market are stabilizing. And they caution, "An economy providing lots of part-time jobs to the young and few full-time jobs to the prime-aged" is an economy that could have a tough time "sustaining life."

JUST POSSIBLY, A KINDRED MORBID notion may have tempered the stock market's response to the news that the April numbers, on the surface, anyway, weren't anywhere near as bad as feared. Although, frankly, we wouldn't count on it, if only because that'd be much too sensible a reaction in view of the ebullience with which investors greeted a raft of hokey figures, that ranged last week from a slim gain in first-quarter GDP, mostly thanks to involuntary inventory build-up, to a rise in consumer spending that was powered primarily by higher food and energy prices, in other words, by necessity rather than desire.

Investors at the moment are in one of those see-no-evil, hear-no-evil, think-no-evil, buy-anything-that-moves moods. In a wink, sentiment has switched to the bullish side; but then skepticism, let alone profound bearishness, never took root. Whether it's tax rebates or the delusion that the credit crunch is history or that stocks are fundamentally cheap, every day brings a new reason to be bullish.

Must be our congenitally sour disposition, but that makes us all the more certain that we haven't seen the last nor the worst of the bear market.


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