- 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
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