• Short week closed with some horribly bad news
  • People are not paying attention to the data; they are paying attention to the Fed
  • Government released revision to the GDP: -.7
  • The assumption of deflation is cooked into the number
  • Most Q2 data is weak
  • Q1 Corporate profits plunged by 5.9%
  • JP Morgan announced 5,000 layoffs
  • Corporations are already levered up to the max
  • May Chicago PMI plunged back down to 46.2 – close to March’s -year low
  • April Durable Goods fell .5
  • March Services PMI fell to 56.4 – second monthly drop
  • May Dallas Fed Manufacturing crashed to -20.8; fifth consecutive monthly decline
  • The Fed has never predicted a recession; in fact they have forecasted economic growth while in a recession
  • Bloomberg Consumer Comfort Index: fell for the 7th consecutive week
  • There are fewer good jobs available and if someone loses their job the are likely to have to take one they are overqualified for
  • The Fed is too concerned about maintaining the illusion of prosperity to allow genuine prosperity
  • They are propping up the stock market and the housing market, pretending everything is OK, and allowing the government to continue deficit spending
  • People still think the Fed will raise interest rates; the most we would get is a trivial hike< just to say they raised rates to get things back to normal
  • There is no more normal anymore; the new normal is interest rates at zero and perpetual QE until the whole thing blows up
  • How can we expect to learn from our ancestors when we can’t even learn from our own mistakes?