Thursday, March 3, 2016


For which everything stopped today in anticipation of Friday morning...but wait!  It might snow in D.C. and warnings are already out that it may be delayed!  What a country.  The nation's capital catches three inches of snow and everything stops...

There are clearly two camps emerging as to the state and direction of the economy; one is optimistic based on the data reported.  The other is pessimistic based on the data reported.  If there is any common ground it is that nobody really believes the data--or at least some of it--and the datum most in question is the jobs report

The latest argument on the optimistic side is being floated by those close to the Fed and the administration, namely that we really only need about 125,000 new entries into the work force to take care of the growing population which makes skeptics like me begin to think, "uh oh, bad news coming down."  Couple with this observation is the statement that  we have recouped all the job losses stemming from the economic crisis which while correct, doesn't mention that the country has about a 30,000,000 person increase in population since then.  Where did the rest of the workers go?  Into that 37.4% who are permanently unemployed or have dropped out.  The 4.9% unemployment rate, taking that grouping into account, quickly moves into the 8-9% range.  You see the unemployment rate only counts those who are looking for a job.  Or, as the kids say, whatupwiththat?

But, perception is damn important and if enough people perceive that things are looking up, it just might happen.  Hence, tomorrow's number is BIG.

Jamie Dimond was on TV this morning firmly placed in the optimists camp.  Of course he has just purchased $25,000,000 of J.P Morgan stock so he had better be there.  Funny thing is his chief equity guy came on later in the day and told everybody to lighten up given the chance of a recession later this year.  Gotta love those Chinese walls.  A new Fed tightening later this month is now almost completely off the table in the minds of most but "why" is the question.  Because of strength in the economy or because of fear of a new recession?  I keep be reminded of that old Chinese curse: "May you live in interesting times."

I confess, I have always been one who believed in the exceptionalism of the United States but as the world grows closer and more interdependent, I must wonder how we can be swimming against such a strong tide of economic reversal all about us.  A British newspaper carried a story yesterday that Brazil is in crisis and only the IMF could save them.  Curious, said I, and got in touch with My Really Smart Friend, Larry--who's somewhere East of Suez by the way, doing God knows what--to get his thoughts.
Yeah, Brazil stinks he says, but the IMF?  Nobody wants the IMF involved because they are clueless. Best thing that could happen is Dilma gets out of town as quickly as possible which probably won't happen.  He's right of course but there are an awful lot of people who would agree with the Brit newspaper and therein is the problem.  We continue to search for a savior for all our problems when the clear evidence indicates that there ain't many saviors about these days and those that were--the central banks and the IMF (a half century ago)--have run out of saving juice.  But we'll wait for the jobs report tomorrow which will of course be the definitive statement as to whether the saving best begin Over Here or not.   Yeah, sure.   Can't wait

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