Billmon has a post outlining his suspicions that the job numbers were leaked yesterday, which led to a late round of massive selling on the part of hedge funds and other big market players. His evidence seems to be that there is someone out there very unwilling to be in the market tomorrow, and so they must have had a leak or some other indication of a disappointing number coming out this morning.
I would point out that if you're going from past experience (which most traders and their clients do), the Bush administration has a terrible record of producing what they promised, especially in relation to jobs. I should post Paul Krugman's wonderful graph of a few months ago, showing every cheerful projection the administration made on jobs and the dismal reality. Thus if there are numbers coming out the next day, and the CW is that there will have been 3% job growth in July, then the smart thing for a fund manager to do would be to revise all his estimates to (3)% or less. I'm just choosing a random number here, but if I was a fund manager I would model the shortfall over the last three years' jobs numbers and then take it from there. And then I would get the hell out of the market the day before the report.
Billmon also argues that traders most probably listen to Fox. When I was working on the Deutsche Bank trading floor, CNBC was the network of choice for our big TVs that hung balefully over our heads all day. Most of the sales traders had the sound going continuously out of the squawk box on their desks, which added what seemed to me to be commentary as or more caustic as Fox to the general cacophony.
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