Unemployment

Believers in "technology always creates more jobs than it destroys" never address the knotty issues of taxpayer subsidies, secular trends of higher labor costs, the eradication of low-skill jobs that pay enough to live on without taxpayer subsidies, or the structural surplus of conventional labor and capital--the scarcity value of both are dropping to zero. While many hope that every low-skill person can become a high-skilled worker, training people doesn't create jobs for them.

While some have called The Trans-Pacific Partnership, "the most brazen corporate power grab in American history," President Obama tells Americans - in an Op-Ed released today - that "it’s the right thing to do for our economy, for working Americans and for our middle class" Despite indepedent analysis that appears to confirm  the creeping corporate coup d’état along with the final evisceration of national sovereignty, President Obama explains - in simple words - ObamaTrade is "a trade deal that helps working families get ahead," due, inhis opinion,  to the "toughest global labor laws" which will allow American workers to compete on a so-called "level playing field."

As one witty observer noted over the weekend, "no one with an IQ greater than their shoe size, save corrupt, captured American economists, buys the fake October unemployment report," and while we agreed with the pretext of his thesis, we thought a quick sanity check on the sudden surges in Retail employment and Construction jobs and wage growth would help clarify a few things for those who 'believe' in miracles. As the following two simple charts show, we have seen this odious pattern of mal-investment, mis-allocation, and erroneous executuve extrapolation before... and it did not end well.

The failure of the Fed’s policies of massive money creation, corporate bailouts, and quantitative easing to produce economic growth is a sign that the fiat money system’s day of reckoning is near. The only way to prevent the monetary system’s inevitable crash from causing a major economic crisis is the restoration of a free-market monetary policy.

The world is bankrupt after thirty years of borrowing from the future to throw a party in the present, and the authorities can’t acknowledge that. But they can provide the conditions for disguising it, especially in the statistical hall of mirrors that once-upon-a-time produced meaningful signals for the movement of capital. The Dow, the S&P, and the NASDAQ are the only signaling mechanisms that the legacy media pays attention to, and the politicos take their cues from them, in a feedback loop of false information that begets more delusional positive psychology in those same markets.

Having dramatically converged to the tumbling price of WTI Crude, Trannies are jumping dramatically after Bloomberg runs the following flashing-red headline: *CANADIAN PACIFIC SAID TO EXPLORE TAKEOVER OF NORFOLK SOUTHERN. Amid crashing railcar loadings (down over 23% YoY - worst since the financial crisis), this 'syngery' may make some sense but will likely only mean moar layoffs as "two wrongs do not make a right."

"Historically, the statistical or mathematical properties of the financial markets have shifted as the economic recovery nears full employment (i.e., at about the 5% unemployment rate the contemporary recovery has reached). Traditionally, at this point in the recovery, the stock market suffers more frequent declines, bond yields rise more often, average annualized returns from both asset classes are lower, diversification benefits tend to diminish, and recession risk is enhanced."

If the US economy were actually in economic recovery, would half of the 25-year-old population be living with parents? The real job situation is so poor that young people are unable to form households.

Once again, the two major macroeconomic announcements over the weekend came from China, where we first saw an unexpected, if still to be confirmed, increase in FX reserves, and then Chinese trade data once again disappointed tumbling by 6.9% while imports plunged 18.8%. So how did the market react? The Shanghai Composite Index rose for a fourth day and reached its highest since August 20because more bad data means more easing from the PBOC, and just to give what few investors are left the green light to come back into the pool, overnight Chinese brokers soared after Chinese IPOs returned after a 5 month hiatus. Elsewhere, Stocks and currencies in emerging markets slump on prospect of higher U.S. borrowing costs before year-end and after data underscored slowdown in Asia’s biggest economy. Euro strengthens.

Here comes Goldman, not two months after it said that the Fed should think about easing, with what can only pass for Sunday evening humor saying that 7 years to the day after it landed on the zero bound on December 16, 2008, the Fed will hike because, "the economy might start to overheat by late 2016/early 2017 unless growth slows from the current pace".

In case you have been hibernating, the European Union (EU) is already in a complete state of disarray. Everywhere you look - economy, politics, security, society, demographics - there are very serious problems with no credible solution in sight. This does not bode well for the future of the EU, starting with those who will be living in it.  The EU doesn't need any nationalists to destroy its future prospects. It’s doing absolutely fine on its own.

The cries for going totally crazy are growing louder... the lunatics are running the asylum. One shouldn’t underestimate what they are capable of. The only consolation is that the day will come when the monetary cranks will be discredited again (for the umpteenth time). Thereafter it will presumably take a few decades before these ideas will rear their head again (like an especially sturdy weed, the idea that inflationism can promote prosperity seems nigh ineradicable in the long term – it always rises from the ashes again). The bad news is that many of us will probably still be around when the bill for these idiocies will be presented.

We will let readers decide if the 1.3% increase in total employment, less than half what it was last October,  is the answer.

The 'crapification' of jobs is the direct result of the 'crapification' of the economy.

If there was any doubt if the Fed would hike rates in December, it is gone now: October payrolls soared by 271K, smashing not only consensus of 184K, but the highest expected print. This was the highest monthly print since December 2014 when the gain was 329K and pushed the YTD average monthly gain from 199K to 206K.