Jobs, Jobs, Jobs??? (Why Rats are Leaving a Sinking Ship)

The nonfarm payrolls dropped by 131,000 in July. However, the greater untold story is the June jobs number was revised downward from a loss of 125,000 jobs, to a loss of 221,000 jobs. Like it or not, there is no way to spin this into good news. As we have been continually telling you, the worst could be ahead, not behind. Each day, new data comes forth to reconfirm our position. Since the mainstream media will not give you the necessary information to formulate your own (informed) opinion, we will take up the slack.

The Federal Reserve’s jobs strategy, inspired by the Whitehouse, or vice-versa, has obviously failed and most people, including the Fed officials, recognize it. Thus, the Fed must take some action next week which more than likely is to announce quantitative easing # 2. Specifically, buying more treasuries and possibly buying more mortgage backed securities. Should they do that, it is possible the same action could occur as happened last time. “In March 2009, the Fed surprised investors by announcing it would purchase treasuries and more mortgage related debt that it had already stated. That precipitated 10-year yields plunging 47 basis points, the biggest single-day drop since the 1987 stock market crash.” – (CBS Marketwatch)

INTEREST RATES GO DOWN, AND BOND PRICES GO UP!!!

Till next time,

Bill


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