Before we get into the jobs report (just out) and the latest madness that seems to travel the G20 circuit, a word – or three – about personal trading.
Although we don’t offer financial advice, either here or on the premium content Peoplenomics.com site, we have evolved a fairly interesting view of the markets.
The main feature of it is that many “investment professionals” would hold that you’re either in, or out. Thus framing investing as a binary (two-state) choice.
However, it is not. There are actually three states possible: Long, Short, and Cash. This matters at times like this because the charts have not yet painted (for us, anyway) a sufficiently clear channel to get us to our projected highs in August (21-24).
That said, we think a short-term bottom is close, yet when the market popped +200 on the Dow for a short time Monday, we took the profits (the doorman got his $10-bucks out – e.g. the online trading firm) and went to cash.
Given how the market performed Thursday, that was a near genius-level move.
That said, our “thinking bias” is still to the upside for late August, but we still have plenty of time to continue the current pullback for another week, or longer, and the overall health of this pig is not particularly inspiring.
The bothersome part (which weighed on my sleep last night) was the ADP Job (creation) report that showed there was zero, zip, nada, nicht goods creation employment increase last month. It was all in Services.
Let me offer you some cheap education.
Go read “Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute Working Paper No. 158. “A Shopkeeper Economy” by Daniel P. Murphy Darden School of Business, University of Virginia (2013).
“This paper investigates the properties of an economy populated by shopkeepers who monopolistically provide differentiated services at zero marginal cost but positive fixed costs. In this setting, equilibrium output and wealth depend on consumer demand rather than available supply. The “shopkeeper economy” is compared to a standard production-based economy in which wealth is a function only of labor supply and technology. I demonstrate that the existence of producers who face only fixed costs provides a counterexample to the notion that “supply creates its own demand.”
That may seem a little high-falutin for a summer Friday with only how many hours till “Miller Time” but rest assured, in the longer term of events, such balances truly matter.
Now with the foreplay out of the way, off to this morning’s job data from the Feds and we will specifically inspect the (estimated into existence jobs) data to get a sense of how much is substance (goods) and how much is hype (services)…
Job: Still Good – But Really?
Remember to think QOJ – quality of jobs as we read the hot-sheet from the Labor Department:
“Total nonfarm payroll employment increased by 222,000 in June, and the unemployment
rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported
today. Employment increased in health care, social assistance, financial activities,
Household Survey Data
In June, the unemployment rate, at 4.4 percent, and the number of unemployed persons,
at 7.0 million, were little changed. Since January, the unemployment rate and the
number of unemployed are down by 0.4 percentage point and 658,000, respectively. (See
Among the major worker groups, the unemployment rates for adult men (4.0 percent),
adult women (4.0 percent), teenagers (13.3 percent), Whites (3.8 percent), Blacks
(7.1 percent), Asians (3.6 percent), and Hispanics (4.8 percent) showed little or
no change in June.”
Now on to the Labor Participation Rate: 62.8% up from 62.7% previous month – generally considered bad/wrong direction.
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force was up to 8.6% from last month’s 8.4%
And those “estimated” jobs in the CES Birth/Death Model: 102,000 jobs were “estimated into existence” with the biggest bumps coming in leisure and hospitality (+82K) and Construction (+23K). Yeah, adds up to more than 102K, but some sectors (like education and health services) dropped. The details here if you need something to drill this morning.
All in all, the most meaningful view may be derived from trying to understand the new H.6 Money Stocks report because from that we can at least delude ourselves into pretending to make “judgments” about how much paper is chasing how many shares.
Like direct action by some anarchists is going to stop the Global Economic summit in Germany?
Whenever I see such demonstrations (or got cause in the mace back during the anti-war demonstrations of the early 1970’s) I’d wander away asking “What did these people EXPECT to happen?”
Seemed to me to be a reasonable question then – and now. During the antiwar years, sure, it put the topic on TV, but the body counts and arriving coffins were doing that, too.
Fast forward to the G20 stupidity and what? Like tossing a few Molotovs is going to deter the rich from their plans of continuance of the paradigm? Pah-shaw…hardly. Might bail out the collapsing news networks for a week, but besides that?
People in mob settings aren’t known for clear-thinking with the best, balanced outcomes in mind. At least mobs in Hamburg, Ferguson, Baltimore, Paris, or any other I’ve seen. Seems all about the fight and the pseudo-leaders who ascend the hill of violence. Isn’t so much about the smart, clever, correct, and beneficial now, is it?
Climate Change is a Hoax, III
As we’ve been telling you, here comes a “shock report” that says virtually ALL CLIMATE CHANGE is due to jiggering the data!
Gosh, don’t you hate it when we turn out to be right?
One reason? We actually look at the data – like this month’s continuing decline in sunspot numbers reported by the Space Weather Prediction Center’s Solar Cycle Progression:
How hard is it to look at a damned picture? Maybe if your eyes have been Gored, well then, sure…
Still, if we’re not getting through, this story out of Oz(tralia) might convince you:
“Sun might plunge into ‘deep solar minimum’, which could cause part of Earth’s atmosphere to collapse: SCIENTISTS suspect the sun is on the verge of a “deep solar minimum”. It’s about to shower us with rays so intense that part of our atmosphere will collapse.”
Go read, then send me a thank-you for NOT bullshitting you with some crooked climate ruse to pimp web traffic like the fake news media do…
I’ve been touting Robert Felix’ sites for more than a decade – to the skeptics who just can’t think independently. But check this link from Felix www.iceagenow.info site (bookmark it): Coldest in 110 years in southeast Australia. But hey, don’t look at the facts…
Family axiom for Millennials who may have missed it growing up: “If you’re just honest you’ll usually end up being right. But it may take a while…”
Crowds – addicted to drama and misled for profit – don’t part with delusion easily. Just how our brains are wired (stupidly) we suppose…
California: One Upping Bankruptcy
Pardon their PC wording in this but did you see where “California Closer to Creating Sanctuary State”?
What the media calls “undocumented immigrants” are largely illegal aliens…but worse (and PC disease is bad enough), the law enforcement unions and police chiefs of California think this is a bad idea and the damn legislature is ignoring the people who have to cope with the blowback!
Just between us sheep, may this a stealth economic development plan. Sure…
With record heat in this weekend, no growth in manufacturing jobs in the country to speak of, California needs a new growth industry besides building 50 bathrooms for the unlimited number of genders and hybrids coming down the road.
So maybe the deal is for California to morph into the first Spanish-speaking state (ESL for Everyone!) and that will open up the path to an insanely liberal future federal government in DC to requiring bilingual everything for the whole country.
But, of course, you know what that means?
California seems destined to become America’s remix of Quebec…and Canada made a whole economy out of bilingualism for a pushy minority bent on marketing their viewpoint (and imposing it on everyone) along with their language.
(Mental clarity as a second language, anyone?)
Bend over and kiss your melting pot goodbye. Thanks, California…
Wait!!!! Maybe Puerto Rico and California could merge their balance sheets!!! Have Goldpersons -Sacks bundle and package it. Then sell it to college endowment funds, life insurance outfits, and pension funds.
Hell, what could go wrong?
And so, as the sun comes up over the tall pines in the Texas outback, we have again solved all the world’s problems.
Tequila for breakfast! ¡Arriba, arriba! ¡Ándale, ándale!