Come on, chaps, those revenues are often fees borne by shareholders and the firms in which ABI members invest. The banking crisis was a golden opportunity to get a better deal for investors, pensioners and society. So explain what, if anything, you are doing.

Unfortunately the bonus season will arrive in about six weeks’ time, which is too soon to expect a shareholder rebellion. It is time for the government to take matters into its own hands.

Ignore the objection that the banks would suddenly all run away to Switzerland – a windfall tax is a one-off, so there should be no incentive to do so. And, if it was genuinely a one-off, far-sighted bankers (there are a few) would probably admit that the tax would be a fair cop after so much taxpayer support. They might also welcome the opportunity to clear the air and perhaps avoid a public backlash that could become very nasty by mid-January. Next Wednesday is the last chance to change direction.

· The net result, in our view, is still job destruction. We forecast a loss of another 100,000 payroll jobs in the November employment report, to be released tomorrow morning. Last month’s sharp rise in the unemployment rate to 10.2% looks to us like a short-term overshoot, although we ultimately expect unemployment to drift up to 10 ¾% by early 2011.

Job growth is central to the 2010 economic (and political) outlook. With economic growth firmly in positive territory, at least in the near term, the next milestone will be a return to positive employment growth, which in turn would help to fuel increased household incomes and spending in the classic “multiplier” process of Economics 101. Those who believe that tight credit and excessive caution by businesses have led to substantial pent-up labor demand that will be released next year naturally tend to be optimistic about the prospects for overall economic growth in 2010, while those who (like us) expect a slower recovery in employment akin to the last two recessions also foresee below-trend growth in 2010. President Obama’s “jobs summit” held today at the White House reflects the administration’s awareness that the job picture in late 2010 will be a key factor in midterm elections.

In this environment, the monthly employment report becomes an even bigger focus than usual. As “payroll Friday” approaches, analysis, theories, and flat-out guesswork about the report wind their way through the markets. Two issues seem to have attracted particular attention in recent days: the potential for a shift in seasonal adjustment factors in the payroll report, and remarks today by White House Press Secretary Robert Gibbs suggesting the unemployment rate might increase.

Despite the veneer of plausibility to this story, we are reluctant to second-guess the Labor Department’s statisticians. In our view, the starting assumption should be that they know what they are doing; our occasional attempts to second-guess the seasonal adjustments have had a mediocre track record. In the particular case of November 2008, the seasonal adjustment programs incorporate some automatic screening for outliers, and also allow manual exclusion of individual series from the seasonal adjustment process if statisticians have a reason to think they are distorted for other reasons. Furthermore, the seasonal adjustment process uses ten years of data, limiting the degree to which a deviation in any one year can shift the numbers. Therefore, we have not made any explicit adjustment to our forecasts to reflect seasonality.

The other item of note with respect to tomorrow’s employment report was a press report this morning that White House Press Secretary Robert Gibbs had made comments implying the unemployment rate might increase in the November report. A comment by Gibbs quoted by Bloomberg implied that yesterday’s slightly-worse-than-expected ADP report might have been a reason for this belief, but it naturally led to speculation that White House officials already knew tomorrow’s report would be weak. In a later interview, however, Gibbs denied that he had seen the numbers.

2. …but hiring remains weak… Unfortunately, hiring remains in the doldrums. Two pieces of evidence look particularly clear on this front. First, surveys of help-wanted advertising have been flatlining for months. Both the Conference Board and Monster.com’s survey of online job advertisements have moved sideways since the spring, and the Conference Board’s survey of offline job advertising continued its slow secular decline, reaching an all-time low in its latest reading (the most recent number is for September; the series goes back to January 1951). Meanwhile, the details of the jobless claims report revealed a large increase in the number of people on extended benefit programs this week, probably related to the recent extension of eligibility by Congress. From the week of the October payroll survey to the week of the November payroll survey, the widely-cited “continuing claims” figure (the total number of people receiving regular jobless benefits) fell by about 400,000 – but the number of people on extended programs rose by approximately the same amount. In short, there was no net movement out of the jobless pool. One caveat is that the extended benefit figures are not seasonally adjusted, but at least from this vantage point, there does not appear to be a significant flow of people finding new jobs.

3. …as firms ramp up production largely with existing employees. Nonfarm business productivity has grown at a blowout rate of 7½% over the past two quarters, reflecting a turnaround in activity with firms still in cost-cutting mode. Even those firms that are increasing production are doing so largely with their existing workforce. This is a common pattern in the early phase of business cycle recoveries, although productivity gains look strong at this point even if we take that into account. With an exceptionally high number of involuntary part-time workers at present, a significant portion of any increased labor needs seem likely to come from increased hours for existing employees rather than from new hires. The strong productivity trend has continued in the early fourth quarter, with growth at roughly a 3% pace while hours worked remain in decline.

We explore the catalysts for a short-term correction. In 2010, we continue to expect mining equities to benefit from a weaker US$, accelerating Chinese investment, restocking in OECD economies, the potential for large share buy-backs and M&A. Copper has been our preferred commodity exposure for 2009, and
although we remain bullish, we think copper bulls are now too abundant and recommend switching into iron ore and coking coal exposure. We have switched our preferred stocks with Rio Tinto replacing Xstrata as our top pick. Anglo American remains a very close second.

Share buy-backs in 2010 could be large: On our new earnings forecasts, the diversified miners are set to generate strong cash flow to the extent that we think
higher growth capex, dividends and even meaningful share buy-backs and acquisitions are back on the agenda. On our estimates, the large diversified miners could repurchase an average 13% of their current market capitalisation by end 2010 (assuming 1.5x net debt/EBITDA). Of the diversified miners, we calculate that BHP Billiton and Rio Tinto offer the greatest potential for buy-backs at 24% and 17% of market cap, respectively.