- Iran thinks Trump should surrender…
- The divergence between the economy and the stock market expands again…
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Dear reader,
“The best option is surrender.”
Is this President Trump’s latest counsel to the Iranian authorities?
It is not. It is instead the Iranian authorities’ latest counsel to President Trump.
In particular, the counsel of Iranian National Security Council spokesman, Ebrahim Rezaei.
“Starting today,” continued this Rezaei fellow, “the era of restraint is over.”
Thus the doves of peace remain cooped… and will likely remain cooped for a spell.
“TOTALLY UNACCEPTABLE!”
Meantime, the president has snarled his teeth at Iran’s latest peace proposal.
- I have just read the response from Iran’s so-called “Representatives.” I don’t like it — TOTALLY UNACCEPTABLE!
- Thank you for your attention to this matter.
You are very welcome, Mr. President.
All the while, Israeli authorities have evidently informed Washington that negotiated settlement with Iran is unlikely.
Wait, Good News?
Yet what is this? A positive scrap of needed economic news?
On Friday, April’s unemployment data came issuing.
A Dow Jones body of economists had divined the addition of 65,000 non-farm payrolls.
The actual figure — according to the United States Bureau of Labor Statistics — came in at a boffo 115,000.
In all… again, according to the United States Bureau of Labor Statistics… the United States economy has posted over 300,000 payrolls within the last two months.
A Look Behind the Numbers
Yet if you are a long-suffering reader of this publication, you are aware that statistics are often lovely liars.
You know they often misinform rather than inform. You know they often propagate more fog than light.
Let us then attempt to discern these figures in their true aspect. What do we find?
We find that many fresh positions are part-time positions. Pursuers of full-time positions presently find few opportunities.
Meantime, the labor force participation rate — the percentage of the population that is either employed or seeking employment — continues to decrease.
“Underlying Anxiety in the Labor Market”
Reports CNN:
- “Since the beginning of the year, employment has actually fallen when you call up people and ask them if they have a job,” KPMG’s Diane Swonk said.
- “Participation has also fallen and job leavers have fallen. All of that is a sign of underlying anxiety in the labor market.”
More:
- The labor force participation rate fell for the fifth consecutive month, inching down to 61.8% from 61.9%. The employment to population ratio, a measure of labor market engagement that includes those who are unemployed and not actively seeking jobs, fell to 59.1% which, excluding the pandemic, is the lowest rate since 2014.
- The U-6 unemployment rate (an alternative measure of labor underutilization) rose to 8.2%, the highest in five months and two percentage points above where it was in 2019, Swonk said, noting that more workers are having to accept part-time jobs because full-time work isn’t available.
- “Those who have a job are frozen in place, and those who want a job are frozen out of the labor market,” she said.
Is this the sign of a hale and hearty labor market? I am far from convinced that it is.
The Lowest Consumer Sentiment EVER Recorded
Meantime, May’s University of Michigan Consumer Sentiment Index is out.
What did it reveal?
It revealed the lowest consumer sentiment in recorded annals… stretching to the 1940s… down 3.2% from April… and 7.7% from last May.
The Consumer Sentiment Index, in fact, comes in 13% beneath its harrowing 2008 low.
A certain Joanne Hsu is the survey’s director.
Ms. Hsu claims consumer glumness is propelled by “concerns about high prices both for personal finances as well as buying conditions for major purchases.”
There appears to be justice here. Americans’ perceived financial condition has plunged to the lowest depth since the inky depths of 2009.
The Stock Market Doesn’t Care
Yet like raindrops off a windshield… or perhaps like the Titanic through an ice field… the stock market sweeps aside all economic concerns.
These concerns simply do not register.
A lengthy and potentially catastrophic energy disruption, escalating inflation, plunging consumer sentiment, a languishing labor market — they count for nothing.
The Kobeissi Letter:
- The S&P 500 closes at its highest level on record, now up +17.2% since the March 30th bottom.
- That’s +$10 TRILLION in market cap in 29 trading days.
- While inflation is back and the labor market has weakened, it simply does not matter right now.
- In fact, the return of inflation has only intensified the scramble for yield and hard assets that can preserve purchasing power…
- Asset owners are experiencing one of the greatest wealth expansions in modern history while everyone else is being left behind.
The Wealth Gap Widens
And so the vast divergence diverges further yet.
The owners of stocks and other assets — largely the graying and existing affluent — go forward.
The non-owners of stocks and other assets — largely the youthful who cannot afford them — go backward.
As I have asked before: Is it a wonder then that America’s youthful are casting their dispirited eyes to socialism?
They simply do not believe that “capitalism” serves them.
Of course it is not actual capitalism that has passed them over. It is a false and distorted capitalism that has passed them over.
A false and distorted capitalism engineered by the Federal Reserve has passed them over.
As I have argued before in these very pages:
It is time to clear capitalism of all charges, and restore its blackened name.
It is time to haul false capitalism into the dock.
It is time to haul the Federal Reserve into the dock.
Regards,
Brian Maher
for Freedom Financial News
