Here’s Hoping the Market Drops; New Jobs Numbers

Don’t be taken in by the headline on the Drudge Report this morning that “STOCKS BIGGEST COMEBACK SINCE 1933!

Oh, it’s true and all that, sure.  And yes, the report from CNBC that “Dow posts biggest quarterly comeback since 1933” is also quite true.

What people are talking about – in general – is that area where the stock market did a massive bounce after the near extinction event call the Crash in 1929.  That’s the yellow circle in the chart below.

But the real action, and where our focus is, remains on the performance of the market from 1921 to 1929.  Because that is far more relevant in our work.  The analogies between 1921 and 2007-2009 can not be understated.  Remember, there were four panics prior to the Great Depression in the 1907 to 1921 period, and that fits much better from a longwave economics perspective.


OK, why would I be hoping the market sets up for a correction for a week or three?

As explained yesterday, we have evolved an odd way of looking at markets and a timing approach that seems to work.

So – strange as this is going to sound  – I actually want the market to drop 50-100 today.

The reason?  Short-form, if we get a few more big up weeks, our Peoplenomics Trading Model will be dangerously close to rolling over.  That typically means the rally is running out of steam and I have to start thinking again about another Big Short.

I don’t do that unless I really have to.  Thinking is too much….well…work!

Munching Jobs @5%

Having said that, the latest “news” item out is this morning’s employment data from the Labor Department just crossed:

“Total nonfarm payroll employment rose by 215,000 in March, and the unemployment rate was little changed at 5.0 percent, the U.S. Bureau of Labor Statistics reported today.

Employment increased in retail trade, construction, and health care. Job losses occurred in manufacturing and mining. Household Survey Data In March, the unemployment rate (5.0 percent) and the number of unemployed persons (8.0 million) were little changed. Both measures have shown little movement since August.

Among the major worker groups, the unemployment rates for adult men (4.5 percent), adult women (4.6 percent), teenagers (15.9 percent), Whites (4.3 percent), Blacks (9.0 percent), Asians (4.0 percent), and Hispanics (5.6 percent) showed little or no change in March.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.2 million in March and has shown little movement since June. In March, these individuals accounted for 27.6 percent of the unemployed. (

In March, the labor force participation rate (63.0 percent) and the employment- population ratio (59.9 percent) changed little. Both measures were up by 0.6 percentage point since September.

The number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) was about unchanged in March at 6.1 million and has shown little movement since November. These individuals, who would have preferred full-time employment, were working part-time because their hours had been cut back or because they were unable to find a full-time job.

One of the HUGE reasons that I forecast a blow-off top in the market is starting to work in background…we’ll explain in tomorrow’s subscriber report on the site.

What Happened to Turn-About is Fair Play?

We can’t help but mention the Wall St. Journal piece on how “China Tax on Overseas Purchases Set to Kick In.

If the Republican Party still existed, they might have the presence of mind to do exactly the same thing here.  And use the money thereby generated to pay off social costs and lower our staggering national debt.

But do they have the brains to figure this out?

Nope:  Because there is no Republican Party anymore. I see its remnants blowing up on teevee.  There’s the Paul Ryan/Obama wing that pushed TPP, opening borders, offshoring jobs, and special tax breaks for corporations that own elections.  But the original balanced budget, small government, for the working man Republican Party that might have backed a counter-move to China?  It’s a crock. It’s a sick joke.  And the duopoly is corrupt through and through.

Ending TBTF

But when I tell you that we should see the biggest market rally in history, pay attention.  Even the Federal Reserve is changing a bit.  The Minneapolis Fed chief, Neel Kashkari (which sounds oddly like cash&carry to me) has been working on a series of public meetings to talk about the whole banksters holding up the public with the Too Big To Fail concept.

Kashkari – whose thinking I admire – says in so many words that has to end.  I don’t think the Minneapolis Fed would mind me sharing an email I received Thursday:

Last month, Minneapolis Federal Reserve President Neel Kashkari announced the launch of a major national initiative that will gather experts from across the country and engage the public in a discussion about solving the problem of Too Big to Fail (TBTF). The first symposium in the series will be hosted at the Bank next week on Monday, April 4.

The day will consist of two primary components: (1) a daytime symposium attended by academics, economists and other experts and (2) an evening “Conversations with the Fed” hosted by President Kashkari that will open the doors of the Bank to the general public. The entire day of events will be live-streamed and available on our public website. To see the full day’s schedule of events, please view the agenda.  We invite you to follow along!

Thank you for your interest in the Ending TBTF initiative.  We will be sending out real-time updates on Twitter from @MinneapolisFed and with the hashtag #EndingTBTF.

I bet you’ll be able to figure out without too much prompting, what you ought to be watching on streaming come Monday?

In terms of investing, it’s hard to go wrong is you bet with the House – and if the House in this big casino of investing is looking at ending Too Big To Fail, it will mean mighty changes ahead.

There is, of course, a two-edged sword on TBTF.  On the one hand, TBTF has worked to save some big companies.  Remember the auto industry bailouts?  Those maintained jobs…and since saving employment is one of the Fed’s missions, they actually did OK on that.

With TBTF, though comes a lot more financial scrutiny.  And a ruling by a federal judge (“MetLife ruling bolsters other firms arguing systemic unimportance”)  means a fair number of financial institutions may argue they are not in the TBTF box.

The insincerity of this should be obvious:  A lot of companies will try to get out of closer scrutiny by arguing systemic unimportance, but when they get around to failing, you can safely bet your life savings that they will have that sudden “come to Jesus moment” and will then argue that things have changed and now they need to be saved!.

That just how chiselers  and weaselers of finance work.  “I’ll be good” until “OK, I’m bad.”  Then they’ll raid the public purse.

Hats off to Kashkari, though, for trying to talk it through.

And in Other News

Did you see where for the “‘First Time in Human History’: People 65 and Older Will Outnumber Children Under 5”?

File under Old News.

So Much for Famine

A Bloomberg report over here suggests “The World May Have Too Much Food.”:

(I chalk this up to me being on a diet, lol)

The big issue though is not so much quantity as quality…and I still don’t see enough organic when I go shopping. 

Proving My Point

About how the Muslim version of Reconquista, that is, the taking of Europe for a second time is having major fallout:  10,000 millionaires are blowing out of France.

And even Politico groks that “Europe’s Muslims hate the West.”


Another Global Warming Alert!

Oh yeah:  April to Begin with Snow, Cold Temperatures in Great Lakes and Northeast.  Freezing and below, huh? 

You bet:  Global Warming.


Here’s Hoping the Market Drops; New Jobs Numbers — 10 Comments

  1. About the TBTF discussion Mr. Fed; What’s to discuss? Of course it is wrong. Supporting the weak and the criminal only encourages more of the same. It weakens rather than strengthens the whole. This is not true capitalism or free markets. Let the weak, the stupid, the criminal fail. Stronger, smarter, more honest will follow.

  2. Have you noticed Drudge doesnt’t seem to have their hearts in it anymore? Something changed with either their mission or their work ethic. Either way it’s just another website for me these days.

  3. Haven’t you heard? BLS is the ticker tape symbol for Bullsh*t.

  4. After a headfake open today – looked like a repeat of the first day of trading for January – things roared positive again. Not sure on what news.

    Your idea of blow-off top forming looks like it is, ah, forming. Of course, they don’t want to hear this on CNBC. Any similarity that looks like the pattern of the 1929-1933 cycle could indicate that the massive drop that happened then could similarly happen later this year into and after the election cycle. Call it the “Trump Dump” perhaps?

  5. OMG, Cold in April on the North Coast?! That’s NEVER happened before!

    Sunday will be the 12th anniversary of the ice storm that took out our 3 front yard trees, phone, cable, internet & power for 5 days.

    Honest to Mike, the short memories of some people…

  6. “And in Other News

    Did you see where for the “‘First Time in Human History’: People 65 and Older Will Outnumber Children Under 5”?

    File under Old News.”

    I see what you did there!!

  7. The BLA numbers have been exercises in creative accounting for decades now, and particularly the last 15 years.

    Thanks, George, for letting us know about the Minn. Fed meeting. That is probably one to record on one’s computer.

    • Make that “BLS.” Haven’t hit the coffee yet this morning on the West Coast. Sorry ’bout that.

    • If any reader here knows of a simple software that will capture this video for later viewing, please post it. I want to watch the whole thing at my convenience, and I’m busy Monday.

      I have plenty of hard drive space and sufficient bandwidth.

  8. Can we really trust the BLS numbers at 100%? It almost feels like an election year “pump” which is also intending to work against what some say is the biggest risk in the world right now – that being if Trump is elected. If BLS and other economic indicators appear strong, then the Democratic angle will be “look at the good we did…” I don’t like either side, so color me jaded in terms of trusting either.