Apologies to whoever came up with that headline nickname for the BLS. I can’t remember where I read it, or I’d give you full credit here.

Let’s be clear: The Bureau of Labor Statistics, as was, has been under the influence of the executive branch for decades. A little nip here… a little tuck there… and no one’s the wiser.

But like Nick Leeson of Barings Bank fame, once you get a taste of the excitement, you take bigger and bigger risks.

If you recall, in 1995, The Boy From Watford, already down $2 million from making stupid bets on the Nikkei, sold straddles (both puts and calls on the same product with the same strikes and expirations simultaneously) for $2 million, thinking volatility would fall and he’d breakeven.

God wasn’t happy with Nick’s bet, so less than 24 hours later, the Kobe earthquake happened, and Nick lost all $2 million… plus another $198 million. Nick didn’t understand “negative gamma.” As Nick was short put options, he had negative gamma. That means his exposure increased as the stock price went lower, and he needed to sell more underlying stock as the market sold off to hedge his options losses.

But Nick didn’t do that. He decided to buy Nikkei futures as the market fell hard, thinking, “The market can’t go any lower.” Of course, the market did what it wanted, and the Nikkei fell another 3,000 points.

That left him with a $1.8 billion loss and a few years in jail. However, he makes about £10,000 per after-dinner speech in England. They love a loser over there.

Inadvertently, Leeson rewrote the regulations that govern banks worldwide.

I think of Leeson because I always use him as my prime example of a Rogue Trader in class, and this BLS nonsense smacks of a government thinking, “Nah, they’ll never find out.”

What Happened?

When the BLS admitted they overstated the payroll numbers from March 2023 to March 2024 by 818,000 jobs, it was like hearing Bob Uecker's famous line, “Juuuuuust a bit outside," echoing in my head. The sheer audacity of the error was staggering.

Then, Julie Hagerty of Airplane fame said, “Ladies and gentlemen, please calm down. Please listen to me! I want to tell you what's going on with the ship! Thank you. We've been thrown off course just a tad.

“Miss? What exactly is ‘a tad?’”

“In space terms, that's about half a million miles.”

And finally, Robert Redford said, “Think you used enough dynamite there, Butch?”

When your favorite movies spontaneously go off in your head, you know something is wrong.

How do you overestimate payroll numbers every month but present your findings as fact? We know. The BLS was getting those calls from the Executive I told you about. This not only misleads the public but also has significant implications for economic policy and market decisions.

Credit: ZeroHedge

The above chart shows the average monthly change over that time.

We knew something was up last weekend when Goldman Sachs called BS on the BLS. I wrote in Monday’s Rude:

Goldman has called BS on the BLS, the Bureau of Lies and Storytelling… sorry, the Bureau of Labor Statistics. It’s rumored the BLS will revise its nonfarm payroll numbers downward by 600,000 to 1 million jobs. That means it was a lie every time nonfarm payrolls came in above the consensus from March 2023 to March 2024.

Credit: Goldman Sachs

I wonder what the BLS’s so-called “Super Users” were thinking. After all, they get information before everyone else does. Did they short the market first? And did that hurt them rather than help them? To remind you, I wrote about them back in this April Rude. Here’s the gist:

A Strange Email

I can assure you that I didn’t receive this email from the Bureau of Labor Statistics:

“Super Users?” The BLS has “Super Users?”

What are Super Users, exactly?

Super Users

The Bureau of Labor Statistics (BLS), a key federal agency responsible for collecting, analyzing, and disseminating essential economic data, has been sharing non-public inflation data with a secret group of Wall Street "super users."

These individuals, who receive preferential treatment and insider explanations of where the data may diverge from expectations, have the potential to influence market decisions based on this privileged information.

This revelation came to light when the BLS sent the above email to a group of data "super users" explaining a surge in a measure of rental inflation, which left analysts puzzled.

The BLS initially tried to clear the confusion with a notice on its website and claimed the email was a mistake. However, it has since been revealed that this was merely the latest lie by a Biden agency. The dissemination of economic information to this secret group of "super users" is likely to prompt a deeper look, as it has implications for how major assets trade and Federal Reserve policy.

How Can You Trust These Guys?

You can never trust government agencies. But I much prefer when they downwardly revise their numbers against a president they don’t like rather than them propping up corpses who are thieving oxygen from the rest of us in the Oval Office.

And you know if Kamala gets in, they’ll play the same tune. If The Donald returns, we will either get the most accurate numbers ever recorded or numbers that will make him look bad. That’ll set us up for an upward surprise revision later.

What Happens When Everyone Gets a Vote

You know what happens? Imbeciles like Gina Raimondo get high-ranking government jobs.

Pardon the acronym, but OMFG! She’s the Secretary of Commerce, and she’s “not familiar with that.” In this case, “that” is her administration’s own economic numbers. The Secretary of Commerce. It's hard to believe such incompetence exists at such a high level.

Watch this and weep at the quality of your overlords:

Credit: @RNCResearch

Wrap Up

I always laugh when Westerners point the finger at the Russian, Chinese, and European governments and call them “liars.” People in glass houses and all that.

The USG loves to lie. It’s been lying forever. And it continues to lie to achieve its ends.

Jay Powell had his eye on inflation because he thought the labor market was sound. If he had the real numbers, what would he have done? And that goes for countless other investors who aren’t BLS superusers.

The US needs to reinstitute equal access to genuine economic data immediately.

In the meantime, have a wonderful weekend!