We find ourselves this morning wondering if someone would be kind enough to prescribe some major league anti-psychotics for this market.
The problem is this morning’s Job Report which we will get to in a moment.
It’s the set-up of market psychology, however, that causes us concern. You know markets are in a precarious state when news “flips.”
In other words, when “Good” news is taken as bad, and “Bad” news is taken as good, then trying to make sense and reasonably investments using other than purely technical trading tools because something of a mind-eff.
Here is how the Job report looking from the “flipped” perspective.
Say the Jobs report comes in stronger than expected.
In as normal (non-psychotic) world, this would be good news and the market would go up.
What’s not to love? After all, more people working means more tax revenues for government, so pressure comes off there. Fewer people would be “on the dole” and we would have an increase in savings and investment, which could get us thinking in terms of the Virtuous Cycle in economics, once again.
But that may not work out this way.
Instead, the market could be thinking: “With more people working, the Fed would be more likely to raise rates in the coming months. This would increase business costs because money would be less free…and that, in turn, would mean less money available to shareholders as dividends. So that means that when the Fed raises rates, we would see stock prices come down, and we would not make as much money…”
It’s wrong-headed, of course. The fact is that a slow, rounding bottom to interest rates is coming, like it or not, and the fact that a return of the “I” word (inflation) would kick sales (buy before prices go up) and give a major boost to Housing (buy before rates do up) is completely missed.
So too the impetus for some of the dark pools of capital to edge out of bonds, which would then drop in price, and into stocks, which should rocket moonward, is also missed.
The battle between the factions – believers on both sides – is what makes a market.
Markets are only rational in a limited sense, and only some of the time.
This may not be one of those.
The Jobs Data
Which gets us to the Hot off the Press Release:
“Total nonfarm payroll employment increased by 142,000 in September, and the unemployment rate was unchanged at 5.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and information, while mining employment fell. Household Survey Data In September, the unemployment rate held at 5.1 percent, and the number of unemployed persons (7.9 million) changed little.
Over the year, the unemployment rate and the number of unemployed persons were down by 0.8 percentage point and 1.3 million, respectively. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (4.7 percent), adult women (4.6 percent), teenagers (16.3 percent), whites (4.4 percent), blacks (9.2 percent), Asians (3.6 percent), and Hispanics (6.4 percent) showed little or no change in September. (See tables A-1, A-2, and A-3.)
The number of persons unemployed for less than 5 weeks increased by 268,000 to 2.4 million in September, partially offsetting a decline in August. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.1 million in September and accounted for 26.6 percent of the unemployed. (See table A-12.)
Importantly, the labor participation rate dropped from 62.6 to 62.4%.
The Big Lie about jobs is the absolute number of people working dropped 236,000 in the detail here. The “increase in non-farm” misses the point.
Another made-up number: The civilian workforce dropped 350,000. Oh? Was there a rapture we missed?
Then the CES Birth-Death Model took away 34,000 jobs. You know things are bad when the made up jobs number drops.
A-15 U-6 alternative measures of unemployment declines to 10.0 from 10.3 in August. And I have this bridge for you…
The futures dropped one percent on the news. How we get a $20 pop in gold has me eyeing the hookha.
Where is Our Commander in Chief?
It certainly adds street creds to conspiracy theory that we’re being “had” by the defense industry and an administration that seems to be failing us on purpose through poor direction and second-guessing of the military.
But then you knew we had problems there,. right? Should have been evident when the house cleaning of the military ramped up…they don’t want success. Fact is, America can’t afford peace or the economy craters.
Bitch of a problem, eh? Vlad sees it…exploits. West pictures it as a “PR machine” but dare we ask who is the master of those PR machine tactics? Tonkin, II forward…
Court Out of Touch
I don’t call the Supreme Corps that lightly.
The court has strayed miles from strict Constitutionally informed decision and has gone down the legislate from the bench road…although I’m confident court apologists who like the directional drift of the country would argue the point.
VW: Kick ‘Em When They’re Down
Global Caliphate Oil Grab
Interesting to note the outbreak of Boko Harum attacks in Nigeria. Another one overnight underscores that while Isis/extremism Global Caliphate is being a thorn Syria, they have a business sense, it seems. Nigeria has oil and here come the attacks.
Mexico’s Satellite Program
But they don’t have universal free education for their people yet. You see, the poor in Mexico are born at home…and many don’t receive a birth certificate…The Birth Certificate is a requirement to get into school…and that’s how that game in played.
Meantime, the American Media is complicit in continuing the misperceptions about Mexico. One way was painting Jorge Ramos of Univision as a “reporter.”
The reality is Ramos is more like the Mexican version of Bill O’Reilly…which turns US mainstream media into something of a joke among the intelligent immigrants to ‘Merica.
Mexico is continuing to act in excess testosterone fashion: “My communications satellite network” makes more political sense than “Our educated people and enlightened government…”
Mexico: People aren’t the problem – their government is.
Ain’t it always the case?