BLS Employment Report, Recession Watch, Inflation and the Fed


By Victor Sperandeo with the Curmudgeon


We’ll be making several posts from The Curmudgeon and Victor Sperandeo on BLS Employment Report, Recession Watch, Inflation and the Fed


Discussion:

A case in point are the three credit rating companies (S&P, Moody’s and Fitch) that in 2008 gave AAA ratings to pools of mortgage-backed securities before they went bust. Can anyone forget the “mortgage meltdown?”


A more recent example of U.S. government deception was Friday’s non-farm payroll report. The BLS stated that there were 372,000 new jobs created in June 2022 SEASONALLY ADJUSTED (SA) with an unemployment rate of 3.6%. But did anyone tell you that the number of people in the labor force declined by 353,000?


Analysts are citing the “strong jobs numbers” to permit the Fed to increase Fed Funds Rate 75 bps at their July 27th FOMC meeting with further outsize rate hikes at subsequent meetings. The Fed Funds futures market projects a 92.4% probability of a 75bps rate hike and a 7.6% probability of a full percentage point increase (vs 0% one week ago). Wow!


Disclaimer:

I do not trust or use any data from the U.S. government, including agencies (e.g., the BLS, BEA, etc.), affiliates or even the institutions that are potentially influenced by the government’s power. Instead, I do my own deep due diligence for “investment” purposes only. That involves analysis of original source documentation with verification from credible sources.


Curmudgeon Comment:

Economists expect that the CPI for June 2022, to be released on July 13th, will hit a fresh 40+ year high of 8.8%, according to a poll conducted by Reuters. [The monthly core index is forecast to decline to 5.8% from 6.0% in May.] The CPI probably rose nearly 9% in June from a year earlier, based on the median projection of economists in a Bloomberg survey. If those forecasts are correct, count on a 75 bps Fed Funds rate hike at the FOMC meeting on July 27th.

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Quote:

Quote by Sir Josiah Stamp:

“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money." Said to be from an informal talk at the University of Texas in the 1920s.

 

The statements in this communication are the opinions of its author, Victor Sperandeo, and are not to be relied upon by anyone as the basis for an investment decision. Any investments made by a party in reliance thereon are made at such party’s sole risk. No guarantee of any kind is implied or possible where opinions as to past or future market conditions/events are provided. Past performance is not necessarily indicative of future results.