DOW FELL 392 TO 16,514

The Dow ended down 392 points last night.

Whatever that comes out on the Friday Jobs Report has no significance. The Fed still thinks the economy in on a solid path which is pretty amusing, considering that the U6 unemployment data which includes the number of people who have left employment on their own accord or have become disillusioned in finding a job is 10%. Even scarier, if one takes unemployment to include everyone of employable age, the unemployment is closer to 20%. But the Fed still prefer to adopt the feel good rate of 5%.

High paying manufacturing jobs are being substituted by low paying service industry jobs and part time jobs. US manufacturing is already in recession. The shale oil industry is collapsing under its own weight of debts, made worse by the plunging oil price. Even banks are laying off employees. The holiday season in December has ended, and with it many part time jobs. I expect jobs  to fall in the coming months as the global economy becomes much, much worse than many were led to believe.

The Fed must be quite ignorant too. How can the US be on solid footing when the best global trade indicator of all, the Baltic Index has fallen to record lows. If anything it coincides with the data that US manufacturing is in recession.

I am inclined to believe that the Fed move to raise interest rates was a face saving move, a false conviction that QE1-3 was a success.

The above is just my opinion.