It has been a while since I filled in for Professor Kass in doing his Diary and it feels good to be back here. Enjoy Tanglewood, Doug.
Well, we have yet another big bad event just ahead of us, which is the July jobs data. Most investors think that a September rate hike hinges on the strength of this data, and that may be so. However, what most don't know is that this data, released monthly by U.S. Department of Labor, is totally misleading and plain wrong.
Currently, the press, the White House and yes, even Wall Street, are out with their pom poms ablaze about the 5.6% unemployment rate. The problem is that number is a lie. But, as long as it is swept under the rug, most of us don't even know how false that data point, among many others, actually is.
The reality is that at the moment there are more than 32 million-plus Americans who either are sitting around having totally given hope on ever finding gainful employment, or who are working in jobs that severely underpay or are below their educational or skill levels. These 32 million-plus Americans are not counted in the beautiful statistics put out by the Department of Labor every month, after which we have to put up with watching Labor Secretary Tom Perez trot out on national TV and almost break his arm patting himself on the shoulder.
Going back to the data itself, even a strong number does not warrant a rate hike in September, given the current macroeconomic uncertainty globally. China is not out of the woods stock marketwise and economically, and neither are Greece and maybe even Spain and Portugal.
Yesterday we saw the Bank of England correctly stand pat on rates despite widespread consensus that they would hike rates. I suggest our Fed heads led by Janet "Rebel" Yellen take a page from their book and stand down as well.