...no stock market may return (with apologies to the Bard). The jobs number was below expectations at 173,000 but the upward revisions of those of the past two months gave a decent three month average. That, coupled with a decline in the unemployment rate to 5.1% terrified the equity boys in their belief that the Fed now has enough ammo to raise rates in two weeks time. Down went the DOW at the close by another 280 points.
The arguments against such an action seemed to focus on a grand worldwide economic thesis. Simply put, we're fine, everybody else stinks and if you move Mr. Fed (or Ms., I guess) you are going to ruin us too. I said yesterday that I can't understand how the hell a 1/4 point move on the short end could change anything and was today supported in that view with language just as strong by none other than Alan Greenspan. I'm not sure I like that.
Mr. Greenspan gave a rather remarkable interview on CNBC this morning, not only deriding the fear of a rate hike but blasting in severe language the failure of the political class to deal with the fiscal issues facing us, particularly the growth in entitlement programs which in his words will destroy us if not reined in. He was brutally direct which makes one wonder where the hell was THIS Alan Greenspan for the past 20 years because it was he who started this incredible flood of money into the economy and was the tutor for Mr. Bernanke who followed on and one-upped his predecessor with the completely useless QE programs which made the rich fabulously rich, did nothing for job creation or development and increased the flood of political donations to EVERYBODY to the point where no politician of any stripe gave more than lip service to fiscal responsibility. Worse yet, the whole damned world followed our lead and aren't things looking just great out there? Thanks Alan, ol' pal but rather than supporting me why don't you just wander off into the sunset with Andrea at your side and never be heard from again.
Labor day is upon us and the worst thing about that is we are closed for three days and the rest of the world for only two. To say that markets are volatile would be the understatement of the year. I can't believe that ANYBODY in any dicipline is short over this weekend and there is palpable dread over what might happen on Monday. But if the belief that the Fed is going to move gains traction, what investors and traders will be facing is something that not too many of them remember or for that matter have seen: the end of a hugely growing pile of free money, and now what do I do Horatio? Punt perhaps, which reminds me that all of my teams lost last night. Today was a bummer all-around. But comes the weekend which we will get through...we will, I'm sure of it...at least I think...oh heck, Tuesday is just four days away.
Have a great long weekend...if you are Over Here.
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