{"id":33829,"date":"2015-10-03T03:00:23","date_gmt":"2015-10-03T10:00:23","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=33829"},"modified":"2015-10-05T15:47:14","modified_gmt":"2015-10-05T22:47:14","slug":"black-coffee-there-are-no-markets-anymore-just-interventions","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id33829-black-coffee-there-are-no-markets-anymore-just-interventions.html","title":{"rendered":"Black Coffee: There Are No Markets Anymore, Just Interventions"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe<\/em> …<\/p>\n

And away we go …<\/p>\n

Credits and Debits<\/strong><\/p>\n

Credit:<\/strong><\/span> After diving 250 points at the opening bell on Friday — thanks to a very ugly September jobs report — the Dow shook off the news and abruptly reversed course. It then began a steady — if not inconceivable — 460-point climb<\/a> to finish the day in the green. Go figure.<\/p>\n

Credit:<\/strong><\/span> It’s days like these that give added credence to Chris Powell’s claim that, “There are no markets anymore, just interventions<\/a>.” That is, until there aren’t — and that day is coming.<\/p>\n

Debit:<\/strong><\/span> Apparently, this week’s news that there are now almost 95 million Americans<\/a> not in the labor force isn’t a big deal to today’s stock market “investors.” Or the Plunge Protection Team<\/a>.<\/p>\n

Debit:<\/strong><\/span> They also don’t seem too concerned that, for the first time since 2009, all six Fed regional activity surveys indicate a contracting economy<\/a>. Better late than never, I guess.<\/p>\n

Debit:<\/strong><\/span> The reality is, anyone taking the time to delve a little deeper into the the September jobs report would see that it was a complete disaster<\/a>. Well … unless you live on Wall Street.<\/p>\n

Credit:<\/strong><\/span> Yes, at just 5.1%<\/a>, the unemployment rate ended September unchanged from the month before. But that number has so many arcane caveats attached to it that the figure has become utterly meaningless — not to mention outright misleading.<\/p>\n

Debit:<\/strong><\/span> In fact, the last time the labor participation rate was this low was 38 years ago<\/a>. That’s right: 1977. You know what that means: it’s time to break out the disco ball.<\/p>\n

Debit:<\/strong><\/span> It gets worse: Remember the rosy August employment figures? After they were released last month, Wall St. was jubilant and stock indices jumped higher. Well … the August data was just revised downward<\/em> 21%<\/a>. Oops.<\/p>\n

Debit:<\/strong><\/span> Then again, if you’re an immigrant, the US economy ain’t all bad: 218,000 foreign-born workers managed to find employment during the third quarter. It’s too bad a million fewer<\/a> native-born Americans are working today than three months ago.<\/p>\n

Debit:<\/strong><\/span> By the way, 78% of the paltry 118,000 private sector jobs created last month were low-wage positions. And while the US economy added 21,000 waiters<\/a> and bartenders in September, it also lost 9,000 manufacturing jobs. Forward!<\/p>\n

Debit:<\/strong><\/span> In case you’re wondering, according to Zero Hedge<\/a>, since 2008 the US economy has added 1.5 million new waiters and bartenders to the work force — and lost 1.4 million manufacturing jobs. Does anybody else see a problem here?<\/p>\n

Credit:<\/strong><\/span> Of course, with the US employment situation so dire, it’s really no wonder that 67% of recent university grads think college is a ripoff<\/a>. You can bet most grads with a science, technology, engineering or math degree have the minority opinion.<\/p>\n

By the Numbers<\/strong><\/p>\n

Lest you need more confirmation that the third quarter of 2015 was not kind to the financial markets, here is a quick look at some of the carnage:<\/p>\n

– 7.6%<\/strong><\/span><\/span> The Dow’s three-month return on investment.<\/p>\n

– 7.0%<\/strong><\/span><\/span> The S&P 500’s return during the third quarter.<\/p>\n

– 7.6%<\/strong><\/span><\/span> The Nasdaq’s third quarter return.<\/p>\n

10<\/strong><\/span><\/span> Consecutive quarters that the Nasdaq had finished in the black prior to this one.<\/p>\n

– 17.8%<\/strong><\/span><\/span> Third quarter performance of the Nasdaq Biotechnology ETF.<\/p>\n

2002<\/strong><\/span><\/span> Last year that the Nasdaq Bio ETF had a quarter as bad as its most recent one.<\/p>\n

– 4.8%<\/strong><\/span><\/span> Change in the price of gold during the third quarter.<\/p>\n

5<\/strong><\/span><\/span> Number of consecutive declining quarters for gold. The last time that happened was 1997.<\/p>\n

– 24.2%<\/strong><\/span><\/span> Decline in the price of crude oil over the past three months.<\/p>\n

Source: CNBC<\/a><\/em><\/p>\n

Last Week’s Poll Results<\/strong><\/p>\n

How much money do you need to pay all of your bills each month?<\/p>\n