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Stocks indecisive, unemployment high. Taper tantrum soon? And Dr Fauci?

Written By | Jun 7, 2021
stocks, the Fed, unemployment, taper tantrum, Dr Fauci

Cartoon by Garrison. Reproduced with permission and by arrangement with Grrrgraphics.com. (See link below)

WASHINGTON – Stocks closed moderately up Friday as Wall Street’s 4 p.m. bell clanged an end to last week’s holiday-shortened trading action. Bulls enjoyed this positive day, more or less. But, the MSM’s bullish confirmation bias to the contrary, those closely-watched US unemployment figures proved far from exciting in the month just ended. Unemployment remains stubbornly high, at least due to the Democrats’ absurd over-generosity with extra unemployment benefits. Hints of a Fed-induced “Taper Tantrum” are in the wind. And then, there’s the unfolding scandal involving the Famous Dr Fauci. It’s a scandal everyone who calls him or herself a “journalist” is trying to suppress at all costs. Maybe that’s why stocks remain indecisive halfway through Monday’s trading action.

Unemployment still uncomfortably high. But why?

CNBC’s chirpy Friday summation skirted this fact, while putting some lipstick on the unemployment pig.

“U.S. stocks climbed on Friday as the key May jobs report showed solid gains, boosting confidence in the economic comeback.

“The S&P 500 rose 0.9%. The Dow Jones Industrial Average traded 170 points higher. The Nasdaq Composite gained 1.4%. The S&P 500 is sitting 0.2% from its all-time high reached last month. The equity benchmark has risen about 0.6% this week.




“The U.S. economy added 559,000 jobs in May, the Labor Department said on Friday. The number came in slightly lower than an estimate of 671,000 from economists surveyed by Dow Jones, but still showed a healthy rebound in the labor market as it’s up from a disappointing 266,000 payrolls added in April.

“The unemployment rate fell to 5.8% from 6.1%, which was better than the estimate of 5.9%. Many believe the jobs report, while solid, is not strong enough to trigger the Federal Reserve to dial back its bond buying program.”

Drilling down on unemployment in the midst of a powerful post-Covid recovery

CNBC’s paragraph 3 (above) offers the tell in this otherwise factual clip. The reported 559,000 jobs added in May were, in fact, way short of the estimate of 671,000 new jobs expected. That point that would certainly have been emphasized by our elitist media shills if a certain president, currently banned now by Facebook for a full two years, had been allowed to remain in power as a majority of voters clearly desired. (He claimed. “Without evidence.”)

Note, too, the sideways reference to April’s “disappointing” 266,000 “payrolls” (sic) added in that month. What this really means is that May was almost as “disappointing,” since this was the second month in a row where US job numbers continued to disappoint. Words matter. Readers always need to examine not only the real or alleged facts in every story… and confirm them. But they also need to see how facts – particularly numbers – get reported. Clever spinning, as we can see above, can easily hoodwink a public that’s used to sight-reading news texts without reviewing the sentences. Closer reading almost always exposes spin that puts facts on a Procrustean bed to support the “official” narrative. Which, these days, is inevitably wrong.


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Stocks indecisive as Fed rumors feed an increasing amount of steady selling

We find that Friday’s unimpressive bullishness wants to shift down into unimpressive bearishness in early Monday trading action. The NASDAQ show signs of a feeble recovery (+ 0.17%) as we approach 2 p.m. ET. But the S&P 500 and the Dow Jones Industrials are logging minor losses of – 0.30% and – 0.47% respectively.

Those unemployment number continue to gnaw. But in addition, rumors continue to grow that our indecisive Fed may taper its massive asset purchases in coming months. The last time the Fed did this under then Fed Head “Helicopter” Ben Bernanke, stocks experienced a massive and damaging “Taper Tantrum” selloff. Could be that the currently iffy trading atmosphere on Wall Street means we’re not the only investors to worry about the consequences of this coming Fed move. It is inevitable at some point, or the dollar and / or its value may cease to be. But bulls will never endorse it. Free money is way more fun.

Then there’s Dr Fauci. Hubris and the concurrent lust for camera time may claim yet another victim

Elsewhere, the growing coronavirus scandal is fast taking on all the hallmarks of a major scandal. The kind that Democrats will find hard to pin on President Trump. The incredible Dr Fauci, along with heaven knows who else in our Federal bureaucracy, screwed the pooch on this one. An unknown number of Washington bigwigs have kept the American people in the dark on the coronavirus horror show even as they subtly (and not so subtly) manipulated coverage of the growing pandemic. That notably includes their constantly revised fetishization of masks and lockdowns.

These now appear to have largely been more a matter of testing just how much and for how long the American people could be terrified into maintaining their own house arrest status. While an entire nation suffered economic and personal deprivation, the CDC’s lack of actual foresight and knowledge with regard to treating this malady may have had another purpose. It may have served as a smokescreen hiding the fact that Fauci, the CDC and other shadowy D.C. denizens may have helped China’s Wuhan bio-warfare lab evolve this nasty virus as part of US taxpayer funded “gain of function” R&D.

How does the Fauci scandal end?

If the MSM acolytes of the left can keep this story relatively muted, the villains of this piece, including the Fantastic Dr Fauci, will get off scot-free as Democrats and leftists usually do.  Yet the release of Fauci’s emails last week may have pulled back the curtain on a scandal perhaps even greater — and certainly more fatal— than that surrounding the outcome of Election 2020.



Worse, given the veritable plethora of damning Fauci emails, the fake-news media will have a tough time claiming this scandal is “without evidence.”  Whatever the case, Fauci has suddenly become a liability to the Biden Junta. After either resigning under a cloud or “voluntarily” leaving government serivce “to spend more time with his family,” Fauci might then be allowed an to scoop up his massive, taxpayer funded retirement bonus as a reward for his “service” to all of America’s newly-deceased Covid victims. And, after a short, “decent” interval, watch him end up as an MSNBC or CNN “medical expert,” making even more money than the outrageous salary he got, courtesy of the American taxpayer in the decades that followed his disastrous response to the 1980s AIDs epidemic. Nothing to see here folks. Move along…

“Justice” in The Swamp is always a mirage, but stocks will still overreact

What a world we live in today. Washington, D.C. is now totally lost to normal, patriotic, non-Communist Americans. It’s now up to the states to straighten things out. And ignore Congress and “executive orders” that try to infringe on their 10th Amendment and Constitutional rights. Civil War II proceeds apace.

Perhaps this deepening reality chasm, pitting elite Deep Staters (including Dr Fauci) vs The Rest of Us is part of the reason why the more or less ongoing 2021 stock market rally has begun to stall. Things are not going to get any better if the tax-and-spend, Modern Monetary Theory Dems and the compliant Fed have their way. And there’s only a 50-50 chance that Senators Sinema and Manchin – currently the only Democrats that at least claim to support common sense and the Constitution – will continue to resist the far left’s siren songs and likely cancellation and death threats to the end, thus saving our democratic republic. Even if they do, we always have the Romneys and the Murkowskis of the world to screw things up anyway.

The most likely result of our ongoing 2021 nightmare, at least short term, will be a summertime of endless headline risk. Nearly all stocks can succumb to this irresistible force. And that means we’ll need to be really careful just how fully invested we intend to remain.

Bottom line…

Stocks continue to look a bit toppy and averages remain stubbornly indecisive. At this point, our own portfolios are brimming with uncommonly attractive paper profits. You’re probably in the same shape. We’re inclined to let them run a bit more. Perhaps you are, too. But getting too greedy here could also have us 75% or more invested when the inevitable corrective selling tsunami crashes ashore. So maybe we need to continue judiciously raising cash in advance of a reversal that will likely hit without warning. After all, absolutely nothing ever ends when you think it will.

— Headline image: Cartoon by Garrison. Reproduced with permission and by arrangement with Grrrgraphics.com. Modified slightly to fit CDN format.

 

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17