WASHINGTON, April 5, 2013 — Looks like it’s “Katie bar the door” time this morning morning on Wall Street.
At approximately 8:45 a.m. EDT, Dow Jones Industrials’ (DJI) index figures are yo-yoing between a negative 125-150; S&P 500 (mini) futures are off nearly 16; and the tech-heavy NASDAQ futures are off a whopping 27+ points. These figures can veer wildly before the open. But the opening tone, at least, appears to be decisively down. And the reason why is simple: an absolutely disastrous jobs gain figure of 88,000—over 110,000 less jobs than economists had expected.
Ironically, the official U.S. “unemployment rate” ticked down to 7.6%, which is already being touted in liberal quarters as the lowest unemployment rate since December 2008. The problem here is, as we’ve mentioned many, many times before, is that the official U.S. unemployment numbers DO NOT COUNT those who’ve given up on finding work, have dropped off the unemployment rolls, or are finding part-time work when they can at minimum wage when they really need and want full time work in their own professions or trades.
Since Great Depression II began, arguably in December 2007 (and still continuing), the real jobless figure—which includes best estimates that take into account workers in the above categories—has hovered between 15% and, at the outset, as high as 23%. The current, phony unemployment figures are helpful to politicians looking for cover. But a reported drop in official unemployment numbers scarcely tracks with March’s dismal employment figures.
According to CNBC this morning, the actual “labor force participation rate” in the U.S. “is at the lowest since 1979.” Which year, as you may recall, was approaching the depths of the Jimmy Carter “malaise” as mortgage interest rates soared, in some cases, above a whopping 16%, marking the previous low water mark in U.S. housing sales.
What does this mean for the markets this morning? Bad news, as we’ve already suggested. Everything this morning points down except, oddly, for gold, which we bailed out of yesterday due to its dismal ongoing performance. The bounce is perhaps technical, as the dismal numbers we got today are at least temporarily putting an end to the Administration’s rosy recovery spinning. (Not that they won’t keep trying.)
The unacknowledged gorilla in the room, of course—aside from the continuing, alarming ravings coming out of the foam-flecked mouths of the North Korean kleptocrats—is the looming disaster of the allegedly soon-to-be-implemented Obamacare sham.
The Maven is using such an inflammatory word today because some of his worst fears concerning this legislative nightmare are beginning to come true. Evidence: this week’s oblique indications that the Obamacare combine on both state and federal levels is nowhere near being able to offer a choice of plans on the thus-far nonexistent “insurance exchanges” that are supposed to be available circa September of this year. So, at least at employers who are on board with the plan, the “choice” of plans they’ll be able to offer their employees is a choice of precisely one.
Such utter chaos is devastating for companies attempting to plan for production, R&D, and projected employment in the upcoming fiscal year because they now, once again, have no way to know what business will cost them per employee. And such uncertainty leads, de facto, to this country’s ever-lengthening virtual employment freeze. Which, ultimately, leads to the kind of “unexpected” job creation number we’ve just seen this morning. “Unexpected” by whom, we’d ask.
Clearly the market will tank this morning, at least at the open. The way things have been these days, who knows what headlines the HFTs will seize upon to drive markets one way or the other. But the recent bias has been down. And with continuing North Korean Kim-chee on one side and with Democrat-led confiscatory fiscal policies and job prevention on the other, it looks like Wall Street will end up keeping Wile E. Coyote company today somewhere down in the dusty canyon floor.
Don’t panic sell today. On the other hand, if profitable positions have been wobbly for the last few sessions, perhaps it’s best here to take your money and run.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.
Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.