- Short week closed with some horribly bad news
- People are not paying attention to the data; they are paying attention to the Fed
- Government released revision to the GDP: -.7
- The assumption of deflation is cooked into the number
- Most Q2 data is weak
- Q1 Corporate profits plunged by 5.9%
- JP Morgan announced 5,000 layoffs
- Corporations are already levered up to the max
- May Chicago PMI plunged back down to 46.2 – close to March’s -year low
- April Durable Goods fell .5
- March Services PMI fell to 56.4 – second monthly drop
- May Dallas Fed Manufacturing crashed to -20.8; fifth consecutive monthly decline
- The Fed has never predicted a recession; in fact they have forecasted economic growth while in a recession
- Bloomberg Consumer Comfort Index: fell for the 7th consecutive week
- There are fewer good jobs available and if someone loses their job the are likely to have to take one they are overqualified for
- The Fed is too concerned about maintaining the illusion of prosperity to allow genuine prosperity
- They are propping up the stock market and the housing market, pretending everything is OK, and allowing the government to continue deficit spending
- People still think the Fed will raise interest rates; the most we would get is a trivial hike< just to say they raised rates to get things back to normal
- There is no more normal anymore; the new normal is interest rates at zero and perpetual QE until the whole thing blows up
- How can we expect to learn from our ancestors when we can’t even learn from our own mistakes?
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