Rosenberg

Goldman Slashes Rate Hike Odds After "Awesomely Bad" Jobs Report

"In light of the weaker-than-expected employment report, we have revised our subjective odds of the timing of the next FOMC rate increase. We now need see probabilities of 0% for June, 40% for July, and 30% for September. Although the report lowers the odds of near-term action, in our view, it also arguably raises the range of possible outcomes. If employment growth rebounds next month but the unemployment rate remains low, the case for hiking after June would become quite strong. Alternatively, if sluggish employment growth were to persist, the FOMC could remain on hold for longer than we currently expect."

The "System" Won't Survive The Robots

It’s really just a matter of time; the working man’s deal with his overseers is half dead already. But there’s still inertia in the system, and even the losers are keeping the faith. Hope dies slowly, after all. Nonetheless, the deal is collapsing and a new wave of robots will kill it altogether. Unless the overseers can pull back on technology – very fast and very hard – the deal that held through all our lifetimes will unwind.

Weekend Reading: It's Probably A Trap

The “bullish case” is currently built primarily on “hope.” Hope the economy will improve in the second half of the year; Hope that earnings will improve in the second half of the year; Hope that oil prices will trade higher even as supply remains elevated; Hope the Fed will not raise interest rates this year; Hope that global Central Banks will “keep on keepin’ on.”  Hope that the US Dollar doesn’t rise; Hope that interest rates remain low; Hope that high-yield credit markets remain stable.

Exposing The False Promises Of The Socialist "Poison That Bernie Is Peddling"

"It takes someone who has experienced socialism’s failures firsthand to see why Sen. Sanders is succeeding: We elders, immigrants and native-born alike, have failed to teach our children and grandchildren about the economic history and false promises of the myriad forms of socialism that infest our world."

Puerto Rico Bonds Plunge After Senate Passes Debt Moratorium Bill

The ongoing feud between Puerto Rico and its mostly hedge fund creditors is promptly shaping up as the next "Argentina", where "vulture investors" may well end up holding the island commonwealth hostage for years, during which time, however, they won't get paid. This is shaping up as the latest development in the saga in which earlier today Puerto Rico’s Senate approved a bill calling for a moratorium on a wide range of debt payments, including general-obligation bonds, through January 2017 in what Bloomberg dubbed "the latest escalation of the Caribbean island’s fiscal crisis."

Weekend Reading: Bulls vs Bears - Who Will Win?

With volume declining on the rally as short-covering fades, the thrust of Central Bank actions now behind us, the focus will once again turn to the economic and fundamental data. From that standpoint, the “bears” remain firm in the commitments. With profit margins and earnings on the decline, economic data weak and interest rates hovering near lows, there is little support for an ongoing bull rally.

Politics: 50 Years Of Failure

Several decades ago, Saul Bellow wrote this: "For the first time in history, the human species as a whole has gone into politics. Everyone is in the act, and there is no telling what may come of it." At this point, however, we can say what has come of it: failure. Politics has failed to deliver on nearly every promise it has made since the 1960s, and we think it’s time to hold it to account.

Weekend Reading: Breaking Markets - Season II

Fed Chair Janet Yellen will be forced to either acknowledge labor market tightening as reason to continue with the four-hike schedule for 2016 or risk her credibility, belittle job market stability and sound a warning about the risks of lower oil prices and cheap gasoline (sacrilege to regular Americans) by slowing the hiking pace after a single 0.25 percent increase last month. If she gets it wrong, things could get ugly fast."