Friday, October 9, 2015


No. I'm not talking about Mr. Putin's ship-fired missiles which, as predicted, didn't like where they were going and apparently killed a lot of cows in Iran...and hit nothing of consequence any where else. I'm talking about that I am out here in the fly-over zone (don't get ideas Mr. Putin) without a thing going on other than another ridiculous interview on CNBC today by Billy the Dud making one wonder whether the guy is trying out for some late night show on CNN where, since no one seem to watch, one can say anything and not get in trouble.

Billy seems to think that if...if mind you...his assumptions are correct, the Fed might be able to raise interest rates this year.  What assumptions?  Well, continued solid job growth of around 125,000-175,00 a month (he slipped in 200,000 at one point),  which has led to unemployment of only 5.1% and which will lead to higher wages and begin to create higher inflation.  He was never asked of course if the unemployment numbers were simply crap as

1.   125,000 comes no where near the population growth, and

2.   The biggest drop cause of in the unemployment rate is a result of the growth in the decline in the employment percentage which has reached 62.9% indicating a steady increase in the "the hell with it attitude" causing people to drop out of the job market and  of course the increase in retirement as one portion of the labor pool ages. Or to put it another way, when a third of the labor force ain't lookin, the percentage of those that are so doing, but unsuccessfully, can easily reach 5.1%

Wage growth is stagnant and likely to remain so and inflation--as measured by the Fed today--is no where to be seen.  But Billy was all smiles.  Why not?  he was on tv...YET AGAIN!

China isn't a direct problem for the U.S. but more so for developing markets which then could impact upon the U.S. economy.  No kidding.  Of course if the Yuan gets picked up as a reserve currency by the IMF...well, that apparently is not on the radar.  (My Really Smart Friend, Larry, thinks that's going to happen by the end of the year by the way.  I don't.  Let's see who is right).  Credit issues:  not discussed.  Liquidity:  Huh?  A new QE program for stimulus?  Smile.  How 'bout some Euro stuff like negative interest rates?  Well, sometimes that can be "useful."  Huh?  Where?  Switzerland?  In short a perfect interview.  What me worry?

The equity guys liked it and kept buying but this is a long weekend and everybody got cautious towards the end.  I think there are pretty much square books in everything as it approaches.  The event risk is still out there and Mr. Murphy doesn't care about a long weekend break.  So, we will keep our fingers crossed for the next three days, enjoy some good college football and root for the Mets and the Cubbies to make it through.  Wouldn't that be a kick?  Too bad we didn't get a better lead-off batter than Billy the Dud today.

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