• S&P responds to bad news with new high; DJ just barely off record high
  • Dollar continues to fall
  • The currency traders still have not accepted the significance of bad news
  • Lower dollar will be the trend
  • Friday got a trifecta of bad economic news
  • Thursday Weekly Jobless Claims number declined to 264,000 – lowest weekly jobless claims in 42 years
  • Why are there so few job losses? Because so few people are getting hired
  • Government numbers come from the Birth/Death Model, which assumes a certain number of businesses created each month
  • What if these businesses are not actually created?
  • This would explain lower number of unemployment claims
  • There’s no way we can say that the economy is the best it has been in 42 years
  • Empire State Manufacturing Index, which was weak last month, expected to be +5, came in at 3.09; below estimate for the 4th month in a row
  • Both Business Expectations and Hiring declined from April to May
  • Industrial Production Capacity Utilization was expected to be flat; down again .3%
  • This is not the 5th consecutive monthly decline in Industrial Production; longest losing streak since 2009
  • Consumer Sentiment Number 95.9 in April – expected to hold steady – came in at 88.6; biggest drop since December 2012, and biggest miss ever
  • If the job market is so strong, why is confidence plunging?
  • The percentage of employees who fear losing their jobs is at highest level since March of 2009
  • The bubble is rapidly deflating
  • Unofficially, I think we have been in recession for the entire “recovery”
  • The government is not accurately measuring inflation in the GDP deflator
  • The Fed has not forecast a single recession
  • Recessions always happen contrary to forecasts
  • If we are in a recession there can not be a rate hike
  • At some point they are going to have to acknowledge that the numbers are not accurate
  • The unemployment rate is going to have to tick up at soe point this year
  • At some point after the end of the quarter it will become obvious that there is no rate hike coming
  • The only question is, What is the Fed going to do?
  • The Fed has not managed to shrink the balance sheet, and further QE will take the deficit to a whole new level
  • This will put massive downward pressure on the dollar
  • Oil prices will spike
  • Cheap gas prices did not create a bounce in Q1
  • Consumer Confidence will plunge
  • Reality is finally going to set in on the failure of the Fed monetary policy