Vince Farrell of Scotsman Capital

1) Unemployment claims were off 1,000 to 301,000, and the four week moving average was down 14,000 to 315,000. Remember, recessions are accompanied by a rise, often a sharp rise, in unemployment claims. A very rough guess I mentioned a couple of weeks ago is that a rate of 375,000 weekly claims would be equal to 0% GDP. This indicator sees no recession.

2) The monthly jobs report is next Friday, February 1. Estimates are for +75,000 new jobs, and that will change as the week goes on. Last recession there was a monthly decline of an average of -215,000 jobs per month.

3) Oil inventories were up +2.3 million barrels last week. 2nd increase in a row and in line with our guess that we would see inventory build in the early part of the year after year end liquidation for tax reasons. The January 2009 contract closed last night at $84.27 vs. $87 for the near month. Still slightly in backwardation. Oil averaged $72 per barrel in 2007, and if the Jan. '09 contract is an indication, oil will be higher this year compared to last.

4) Home sales in 2007 were 5.652 million, off -13% compared to 2006. The median price was -1.8% for the first annual decline since they started keeping records (1960's I think.) A whiff of good news is that inventories of unsold homes was down slightly to 3.9 million units, a 9.6 month supply. Still far higher than normal, but a bit better. Also, applications for mortgage refinancings are up smartly. Shows that lower rates do affect things. I mentioned a couple of days ago that 50% of conventional mortages could refinance and that number will probably grow as rates continue to decline.

5) Then there was the chef in a Swiss restaurant who cut off a piece of his finger using a new slicing machine. The insurance company was skeptical of his claim and sent an investigator who promptly cut off a piece of his finger fooling around with the evidence. The claim was paid, the investigator fired.