Equity futures are higher this morning prior to the open, but so is the dollar, and bonds are just a little lower. Oil is slightly higher, gold is lower, silver is flat, and most food commodities are surging again, some are back near recent ridiculous highs (still waiting for the margin increases here).
Let’s face it, with multi-Billion dollar daily POMOs behind them, good news in the market is read as good news, and bad news is still read as good news. This is exactly the type of logic that was occurring late in 2006, only then the markets didn’t have the risk of liquidity being pulled as the market does now. Fluff is the result of that mentality, and the fluff in the market right now is extreme. Valuations? Ridiculous that people can even make the arguments they do! Today’s “valuations” are based upon accounting fraud, plain and simple. Remove Mark-to-Model and other accounting nonsense and the true valuations would be readily apparent.
YEAY! What good news! There was only 409,000 people filing initial Jobless Claims in the past week! LOL, that figure is astronomical, it shows yet again that our economy is still shedding jobs, much less keeping up with the growth in our population. Still, it is “better than expected,” as if the “experts” have some magical power to price the market. Look, it’s been YEARS with extremely elevated jobless claims, and you need to see this figure less than 350k just to show break even. It’s testimony to the failed policies of the “Fed,” that despite wasting Trillions, job growth has NOT returned. Here’s Econospin for the Alice in Wonderland read:
Highlights
Weekly initial jobless claims are still over 400,000 but they came down very substantially in the May 14 week to 409,000, for a 29,000 fall following the prior week's 40,000 decline (prior week revised 4,000 higher to 438,000). Stock futures are rising in reaction to this report.
Auto and weather effects were no more than isolated in the week's data which sees the four-week average only very slightly higher at 439,000. A decline in next week's data would push the four-week average down for the first time since early April.
Other readings show an 81,000 decline in continuing claims in data for the May 7 week to 3.711 million. The unemployment rate for insured workers is unchanged at 3.0 percent.
Existing Home Sales, the Philly Fed, and “Leading Indicators” will be released at 10 Eastern this morning and will be presented in the market thread below this post. More importantly, things are deteriorating rapidly at Fukishima, we will also be discussing events there.
Until further notice, good news is good, and bad news is good too because it means our money will be debauched further!