President Trump: The NEW one and only politics thread

A few things about this. The unemployment rate has been a farce for years now, because of the manipulations they perform and who they count as unemployed and who they don't.

But even with this report, the BLS put out an addendum saying that the rate would have been 5 percent higher if they had recorded people who they are considering employed, but were absent from work due to "other reasons."

Putting aside the actual number, and the fact that comparing an unemployment rate today from a number from the past isn't an apples to apples exercise because of the mess they have made of measurement. ... In the great depression, the rate dropped less than 9 percent over the course of a year. We just dropped more than 10 percent in a month. In a typical recovery, you are looking at 1 to 2 percent recovered per YEAR. So we had better hope this time is different.

 

What is happening in US equities has zero to do with the economy, earnings or anything fundamental or what "Wall Street has decided." Wall Street isn't making arbitrary decisions. It is simply following the Fed. That has worked for more than a decade now, and even though people realize it is absurd, it is a Pavlov's dog situation now.

It's insane in that the Fed is like a drug pusher now, and Wall Street is the junkie. Interest rates are the drug. Wall Street wants more, in that yesterday, the Fed Funds futures were predicting NEGATIVE interest rates by the end of the year. And the Fed keeps giving Wall Street what it wants, because if it doesn't we are going to get an overdose -- the stock market crashes for good and all of the debt the economy is dependent on defaults. Central Banks (this is not just the Fed) can no longer provide enough drug by just manipulating the overnight rate. They create money and buy debt with it. They started relatively small with their "quantitative easing" programs. Now they have completely taken over the debt markets. Some central banks are outright buying equities --skipping the intermediate step. That is where we are headed, if they can manage to keep their grip on things long enough.

This is not new,. This has been going on since the financial crisis. It's all margin and leverage fueled by escalating amounts of debt monetization. The more of it they do, the more that is required to prop up what they have created, which has gotten us to them essentially injecting $3 trillion of money conjured out of thin air into markets in just the last 2 months, fueling the euphoria peopl are seing. It's so absurd, in the face of earnings crashing, massive unemployment, the economy shutting down, etc. and it's amazing that people still don't understand it. Look at the Fed's balance sheet. It's that simple. They are burning down the house to tell everyone they are saving the house.

If you jump on board and buy equities at these kinds of absurd valuations, with fundamentals where they are, and it's not some kind of trade that you have a good handle on, just realize that the"investing" you think you are doing is really betting that a price fixing scheme can go on forever without it ending in disaster -- not just for the stocks that are now at a ridiculous earnings multiples, but for our currency and our economy.

When the pitchforks come out, it should be for the cental banks, which have destroyed the global economy over the last couple of decades and lowered everyone's standard of living by creating a survival of the unfittest environment -- pushing capital from the future into the present and then creating conditions where nobody could calibate risk or do any price discovery, so that capital has funded all kinds of economically nonproductive things.