The great W.C. Fields is credited with saying: "If you can't dazzle them with brilliance, baffle them with bullshit". No doubt had Mr. Fields been born 100 years later, he'd have made an excellent anchor on CNBS or Bloomberg.
There's really no sense in getting into the weeds again regarding the charade and methodology of the BLSBS. I've written about it countless times and, by now, you're just as much an "expert" in reading through the BS as I am. So, if you want to dissect the folly of another "jobs report", I'll simply suggest you click these links:
Let's, instead, focus upon the absurdity of it all.
We've been set up..."conditioned", if you will...to treat the BLSBS as some sort of be-all-end-all statistic. Today, I'd like to ask "why?".
First of all, the monthly "jobs report" is nothing but statistical guesswork and gobbledygook. As DenverDave notes above, out of the 223,000 jobs that were allegedly added in April, 213,000 came from the FantasyLand birth-death model. This means that 96% of the "jobs" are simply assumed to have been created because, on average, that's how many have been created in Aprils past. Additionally, it's May 8. This means that we're supposed to put all faith into a report based upon the supposedly complete data from a calendar month that just concluded a week ago! If we're to take this stuff seriously, shouldn't more credence be put upon the revision to March's number? At least the BLS has had some time to think and reconsider that one. (Oh. Oops. The March number was revised lower from an already disastrous 126,000 to a miserable 85,000.)
Then consider this... Why is this number so ridiculously over-emphasized? It's just one data point. What about durable goods? How about the trade deficit and GDP numbers? And how about all of the other "macro" data that has been plummeting? Why aren't those numbers emphasized as strongly as the "jobs report"? And here's where I'm going...
Because it's all part of the market/mind control and MOPE. The central planners realize that if you can get everyone to focus on just one number, you have a much greater ability to spin and control the message. Taken on balance, the state of the American economy is awful...but the central planners can't have that narrative. Instead, it must always seem that things are right on the cusp of breakout improvement. So, how do you manage that perception? By getting everyone...the media, the market players, the HFT algos...to focus ALL of their attention on just this one number. By making everything else seem insignificant and focusing solely on the "jobs picture", the other data points are marginalized and largely ignored.
Think about it. By traditional GDP estimates, the US economy shrank in Q1. SHRANK! And it is very likely to contract again in Q2. At the same time, over 20% of all global sovereign debt is now trading at a negative yield. However, as of this morning, we're all supposed to believe that The Fed is now just weeks away from raising interest rates based upon the "robust jobs report" of earlier today. WHAT? THAT'S NONSENSE! However, when you control the media and the message by getting everyone to only focus on one, easily-manipulated data point, you can make the world believe just about anything you'd like.
So, here we are on a Friday morning in the land of the (supposedly) free and (formerly) brave. To listen to the financial news, it's all sunshine and lollipops. Goldilocks says buy more stocks and all will be well. Knock yourself out. As for me, I will continue to remain situationally aware and alert, regardless of the pathetic musings of Kernen and LIESman.
As we transition from this week into next, we'll continue to watch these building formations on the short-term charts. There's not much momentum to drive things higher but the CoT structure is such that there's not a lot of room to jam things lower, either. So, here we sit:
One thing that will be interesting to watch next week is the POSX. As you know, we'd been looking for a drop toward 95 and the index has now found support right in the area between 94 and 95. What will happen next? A rebound toward 96.50 or a further breakdown and fall toward 92? We'll see...
And just a few words on two other items of note. One is lumber. We mentioned this a few weeks back and several, logical comments were made about foreign competition providing excess supply, etc. Now, I don't know much about the lumber market so maybe those are the only reasons for prices being down. Regardless, though, it's hard to look at these charts and conclude that the US economy is booming. Why? Housing growth should demand lots of lumber and high demand should mean rising prices. Hmmm. And on the 25-year chart on the right, notice the broken trendline from the 2008-2009 Financial Crisis lows. Sort of like all the other data points, this doesn't fit the narrative of "rebounding economy" so please be sure to focus instead upon the BLSBS.
The other item is copper...ole DrC. Somewhat strangely and counter-intuitively, given all of the continued disinflation bias, copper has been on quite a tear since early February, rallying over 20%. Earlier this week, it ran into some long-term resistance lines and the area between 2.95 and 3.00 certainly looks sticky to me, too...BUT...we must start to watch copper closely again because IF it can continue higher in the weeks ahead, it will no doubt begin to put significant pressure on 41,000+ spec silver shorts. First, here's a look at DrC on its own:
But gaze upon these three charts of copper overlaid with silver and notice the clear correlation:
OK, I think I'll stop here and get this posted. There will be more later, though, with a full podcast summary and review so please be sure to check back this afternoon or over the weekend. I leave you for now with one more quote from Mr. Fields:
“Remember, a dead fish can float downstream, but it takes a live one to swim upstream.”
Hang in there and enjoy your Friday,