The U.S. Financial Markets: Theater Of The Absurd

As we prepare our state of mental health for the monthly economic idiocy known as “non-farm payroll report Friday,” I wanted to point out just how silly the markets – and the “economic” reports the that influence the short term direction of the markets – have become.

Perhaps the most, for lack of a better word, retarded indicator of economic vitality is the weekly jobless claims report.  Nothwithstanding the fact that this “metric” is tortured by the vagaries and fraudulent handling of Government data collectors and statisticians, the interpretation of the data is now abused to an extreme degree.

The trend for the last 18-24 months has been to promote a jobless claims number below 300k as an indication of a strong labor market.  I even saw a Marketwatch article in the past two weeks which asserted that the jobless claim report indicated “tightness” in the labor market.  Explain that one to the large portion of  the 38% of working age people who are not in the labor force because they gave up looking for a job that pays more than the amount of money available to them from the various Government welfare programs.

Since January 2007, the labor force participation rate has plummeted from 66% to 62%. Tens of millions have been permanently terminated from corporate America payrolls.  From February 2006 to March 2009, the weekly jobless claims spiraled higher from 289k to nearly 700k.  That reflected the mass layoffs and job eliminations caused by the financial collapse of 2008/2009.

The reason jobless claims have trended lower since then is not because more people found jobs again, and are keeping those jobs, its because overall there are less people working full-time in jobs that qualify for unemployment benfits when they do lose their jobs.

This graph I constructed from the St Louis Fed data supports my assertion – I’d love to hear Steve Liesman or one of the turd-brains on Bloomberg or Fox Biz explain this graph:

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Furthermore, its a function of the simple law of averages.   There’s less people employed in jobs with jobless claims benefits now than there were in 2009, so it follows that there will be a lot less jobless claims filings now than when the big purge in employment hit the economic system.

In fact, the jobless claims metric is largely meaningless in any regard as an in indicator of economic anything, other than to vaguely represent the amount of money the Government is paying out to those who are left in the workforce that qualify to file for this taxpayer-financed benefit.   Beyond that, the “economic” metric completely useless.

Of course, never waste the release of an economic report, regardless of whether the data is positive or negative, or even completely meaningless.   The graph below shows Comex Paper Gold trading in 10-minute intervals since 8:00 a.m. EST (x-axis is MST):

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As you can see gold was slammed the moment the report was released despite the fact that the report disappointed expectations and showed a 14% year over year decline in factory order for July.  If anything, gold should have shot up on the expectation that a weakening economy will lead to more QE.

In fact, the ECB’s Mario Draghi today announced that the ECU was going to, in a roundabout way, expand the ECB’s money printing program by enabling the Central Bank to buy a bigger portion of the sovereign-issued bonds it purchases.  He also suggested that the ECB would consider increasing QE.

The S&P 500 futures shot straight on this announcement.  Gold should have as well. But you can see from the graph above that gold was sold down in the London paper market as soon as London opened.  Obviously the entities doing the selling wanted to manipulate the price of gold lower ahead of a gold-friendly announcement from Draghi.

Gold was hit again when the completely useless jobless claims report was released.  Gold is hit automatically every time this report is released.

The blatant market interventions in both the stock, oil and precious metals markets reflects the increasing desperation of the western Central Banks and Governments to use the markets as a mechanism to hide the truth about the underlying deteriorating economic and financial condition of the western economic and political system.

I have a bad feeling that when they lose control of their ability to hide the truth, we’re going to find out the true purpose of the Jade Helm exercises that have been going on since July 15.

25 thoughts on “The U.S. Financial Markets: Theater Of The Absurd

    1. Ya I saw that article but in typical Crudele style, he sugar coats what is largely a milquetoast article. Doesn’t even mention gold.

  1. cannot prove it but now we have so many independent contractors/aka self employed that when a company cuts them, they are gone, no claims etc.

    self employed are listed in the employment report, but who the heck knows how they are treated in the big picture. Or if there are really that many self employed. Or if there is even a big picture

  2. Well we haven’t reached the “everyman for himself” moment yet…but you can feel it coming, you know people sliding to the exit stage left and hope know one notice’s hee hee it is funny to watch 20 million dump at the tape today, wait till it’s 200 million. The Dow i mean.

    1. First it was Bob Grant warning every listener about the fake , phony , fraud gangsters out there who were worth 0…then Michael Savage doing his best to call out the cockroach creeps by allowing all that would hear to take heed. Back when these guys were fingering as many thugs as they were able to life went on and all seemed alright , at that time . That’s clearly not the case any longer.
      Dave Kranzler , you’ve certainly got your work cut out for you while huge problems are staring us all down the barrel . Thanks for your many efforts to keep us well informed . Knowledge is power.

  3. Dave, I noticed Mike Moloney did an interview with Harry Dent and while Harry’s Demographics’ story make’s a lot of sense (he is a really smart Dude!!!) I think he’s gonna burn a lot of little people on the hard money story. Collateral is all people will have to fall back on.JMO

    1. Harry Dent is a snakeoil salesman. Lives on this father’s coattails and on the coattails of one lucky market call a long time ago.

      He’s the financial markets’ version of The Kardashians.

  4. I am not going down the politically correct “pc” road, as to not offend anyone with my true beliefs and feelings. To do so, makes one a retard, retard, retard (yeah I f’in said it too) and a sheeple that will be led to its unknowing slaughter.

    1. We’re FUCKED. They can take that offer of $20/hour and shove it up their ass. That’s isn’t enough to support a family of chipmunks.

  5. I used to have positive opinions about the world, you know, about people. Used to think the best. Now I’m looking over my shoulder. An unquiet mind, that’s what the wife calls it. The job has got me staring into the fireplace, drinking.

    I never wanted to be the type to think big thoughts about the nature of things. All I ever wanted was a stack of pancakes and a v8.

  6. Steve Liesman was busy interviewing Jack Lew. I’m not sure, but I think Jack was chastising the Chinese government for requiring foxconn to erect suicide safety nets.

    1. Jack Lew was also warning the Chinese to get their markets under control LOL. I hope the Chinese or Russians put a bullet in his temple. He’s a bad bad guy.

  7. Do you think the jobs report will be a “beat” Dave?
    I am so sick of this shit.

    Dave, do you think it is possible to make the stock market TBTF ? Like Citi, Goldman , etc.
    Seems like with modern computers , infinite digits and a compliant/ignorant financial media it isn’t outside the realm of possibility

    1. No I don’t think the stock market can be made TBTF. I actually asked Alasdair Macleod that question in a podcast recording today that we’ll be releasing Sunday.

      I stopped spending time thinking about the NFP report ahead of time a couple years ago. Forecasts are irrelevant. The number is so manipulated that analyzing as if it’s real only serves the purpose of legitimizing it. It’s the poster-child for manipulative propaganda.

  8. thanks for your thoughts Dave.

    Regarding TBTF stock markets, I think those bastards will “try ” to keep them propped up by any means possible, only because they have no choice . Pundits used to say the same thing about the bond market, that it was too big to manipulate. It sure looks like they have solved that minor problem.So manipulating something like stocks seems plausible, especially considering the participants.
    If the above scenario plays out, then my worst fears will be realized and you better have your bug-out bag ready at the door, especially if you live in a large american city.

    Regarding the NFP…I should have put a sarcasm next to my question. What absurd bullshit.

  9. NFP# comes out and Spoos goes down 32 handles. Gold starts off
    up $4, now down $6. This is totally rigged. I’m going to Vegas, at least
    the tables are more level then these markets and I get free booze and some
    really hot chicks.

  10. “Let them eat cake”…will be answered with ” Off with their heads”….as Jade Helm 15 establishes the corrupt and criminal politicians…..using what they think will save them from the ‘removal from office’….I think not….inho

  11. This comment might be considered a bit harsh but in my view it´s the reality of whats going on.
    We are approaching a crash of biblical dimensions and all the idiots that are watching CNBC and Bloomberg will get both scalped and hammerd.

    I don´t feel one bit sorry for these stupid morons because they deserve to get wiped out.

    I also hope that when everything burns up in flames you will see people like Cramer, Lavorgna, Gartman, Fartman, and all of the CNBC idiot bunch getting chased by pitchforks down the street and finally rolled in tar and feathers.

    I hope that all screwed people will put up a hitlist so they know who to crucify.

    This will never happen I know but it would be nice to see these corrupt scumbags burn in hell.

    But I think there is hope- load up with popcorn and wath the ceilings of the Wall Street highrises, maybee there will be some tough margin calls for the guys who are currently back at the office from The Hamptons!

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