Friday, September 7, 2012

Morning Charts 09/07/12 SPX /ES

I'm tired of talking about bailouts that will never work, promises that government's can't keep and markets that can never fall because of the backstops that exist. We  were confused yesterday by the dazzling EU bailout propaganda (no solutions, just rhetoric that sent price action on a meteoric rise). Today they dazzle us with a jobs miss that is great news cause it increases the Fed's odds of easing.

Did you catch that? The jobs miss was a good thing. It was something to celebrate cause it may cause the Fed to release trillions more to support or raise the markets. So releasing trillions more on top of the $16 trillions we can't afford to pay back in the first place is totally awesome? Did you catch that? It "MAY cause" the Fed to ease. Like a Draghi promise, all it takes these days is the mere promise or hope that more easing will come and the markets react accordingly ramping to new heights.

The first thing I want to address this morning is the bullshit behind the employment numbers the government puts out and what the MSM leads you to believe about employment. My work is fortunately done here in one simple post from TD at Zero Hedge who concludes, "Oddly enough, this report leaves the NEW QE door open, even as Obama can take the accolade for a declining unemployment rate. Win-win for everyone."

Since a picture tells 1,000 words (or the only truth in this case) please take a gander at the below chart. This is a chart of the Labor Participation Rate since 1980. Notice anything strange or any specific trend since 2000? Notice any ACCELERATION in that trend since Obummer took office?

Fuzzy math manipulating the employment numbers, keeping them at somewhat acceptable levels has become a mathematical game. The figures they present are far from accurate. Forget flawed birth death models and the crap they use to calculate this BS. Let's just focus on what they deliver and how they manipulate it to make you believe all is well. Basic math, lower the total and the percentages improve. They are manipulating the total workforce to keep the jobs numbers in line.

Now let's look at some real numbers that reflect society's real emotion. These figure are not BS from the BLS but real, concrete societal choice driven numbers. This is a chart of people voting with their most important item, their wallet. This is a chart of Smith and Wesson revenues. And no, the DHS's purchase of over 1.4 BILLION hollow points is not part of this equation.

Want another real chart? This is a chart of gold going from $400 to over $1900 since 2005. This is reality folks and I have a feeling this rally is just getting started.

Want another real chart, one that confirms the Fed's meddling and low interest rate policies (which, combined with ever expanding liquidity) that have manipulated growth over the past decade? Look at what they have done to the 10yr treasury notes. This chart is set up for an epic collapse which means rates are going up.

And one last chart to leave you asking yourself, what sort of bullshit world do I live in today? Can you tell me what it is about this absolutely roaring economy today that the markets deserve these valuations? (and yes, those lines to the right are exactly where I think we're headed.)

If you want to add the Dem's bitching about removing God from their party platform to the above list be my guest. This country is now fully dysfunctional. You now have a place where everyone is piling into guns and gold and markets are levitated by political promises of ever expanding debt to make things better. Get real folks. The nightmare is about to begin.

More charts below as usual.

Have a great weekend.

GL and GB.

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