Nowhere at Best – Wiped Out at Worst

The Bureau of Labor Statistics of the U.S. Department of Labor came out and confirmed what everybody already knew; people are losing their jobs at a terrifying clip – which makes me wonder how long it will be before I get fired, too, and I wish that I had more gold, silver, oil and armaments with which to ward off those people who do NOT have gold, silver and oil, because they are going to be angry, hungry and desperate, while although I will be likewise angry as hell, I will not be hungry or desperate, but gluttonous and rich, because I own some of the aforesaid gold, silver and (pause for emphasis) oil.

Okay, they did not actually say that, but they did say, “Nonfarm payroll employment continued to fall sharply in February (-651,000), and the unemployment rate rose from 7.6 to 8.1 percent” which means that another 0.5% of the people are, as I said, angry, desperate and hungry, especially since it is that Girl Scout cookie time of year and the things are $3.50 a box for a smaller box, and us unemployed-type folks wonder, “Where in the hell am I going to get $3.50 for a box of cookies?”

In fact, the report says that payroll employment has declined by 2.6 million jobs in the past four months, and “over the past 12 months, the number of unemployed persons has increased by about 5.0 million and the unemployment rate has risen by 3.3 percentage points” which is Pretty Bad News (PBN), no matter how you slice it.

The latest bad news is that “In February, job losses were large and widespread across nearly all major industry sectors” which indicates an entire economy in a death-spiral, the specifics of which are that the number of unemployed persons increased by a whopping 851,000 in February, taking the total to 12.5 million unemployed!

I took a long, long pull of tequila, straight from the bottle, before I had the courage to look at the broadest measure of unemployment/slack in the labor market, U-6. This is defined as “Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers” and which is now a staggering 14.8% in February! Gaaahh!

And remember; these are government figures, which are notorious for understating the bad news, which is plenty, and for overstating the good news, of which there is none, unless you think that having to pay for more government is good news, and if so, then I am pleased to tell you that government payrolls are still rising, just like they always have been.

And with people not working, they are usually not in a hurry to buy things, and thus companies make less sales and show lower revenue, which is of interest to a lot of people, and thus there are a lot of people who have noticed that stocks have fallen in price to where they were in 1996, 13 years ago, which is using nominal dollars and which is, although bad enough, only The Freaking Beginning (TFB) because when calculating the investment losses in inflation-adjusted dollars, the dollar has lost so much buying power since 1996 that any idiots buying and holding stocks between then and now are getting destroyed, which is just what you would expect from a negative-sum Wall Street game where the majority of investors must lose money so that a minority of investors can make a little money, but where everybody pays Huge Freaking Commissions, Fees And Taxes (HFCFAT) every step of the way, at every turn, thus financing a monstrous, cancerous growth in government and the malignant, bankrupt economy based on government spending and financial services that results! Hahaha! We’re morons and we’re freaking doomed as a result!

And it gets worse than that, as Bob Wood of Kaizen Managed Assets notes, “it gets worse when looking harder” and he has found one guy, Barry Ritholtz, who is one of those who has looked harder, and he “posted a chart on his blog showing that in real terms, after inflation using the CPI was factored in, the Dow is back to where it was in 1966!” Yow! Forty-three years to get nowhere at best and completely wiped out at worst!

Richard Russell of the Dow Theory Letters must have heard us talking about this, and figures that if we want some scary statistics, then we should listen up as he says, “Since October 2007, when the bear market started, the Dow has given up an amazing 7,640 points. I’m looking at the market now. The Dow is at 6,512. At this price, the Dow has lost more than half of all its gains since the lowest point in the Great Depression, which was 41.22 recorded in July 1932”! Yikes! He’s right! It is worse than we thought!

Investors spent 77 years to get nowhere, at best, and completely wiped out at worst!

It seems to me that there is a lot of this “I’m losing my butt!” stuff going around, and reports, “The value of global financial assets including stocks, bonds and currencies probably fell by more than $50 trillion in 2008, equivalent to a year of world gross domestic product, according to an Asian Development Bank report.”

It was in the Financial Times where we learn the additional news that the “[ADM] estimate takes into account falling stock market valuations and losses in the value of bonds supported by mortgages and other assets, though not financial derivatives.” What? Hahaha!

They don’t count even a conservative estimate of the losses in the biggest, most secretive, most complex and convoluted, the most fraught with corruption, money-losing class of absurd financial assets in the Whole Freaking World (WFW), variously estimated to be in a range up to $225 quadrillion? They don’t count any losses in derivatives? Hahaha!

Even worse, the World Bank estimates that “The global economy is likely to shrink for the first time since World War II, and trade will decline by the most in 80 years.”

Unfortunately, neither one of them then immediately suggested that you buy gold for its wealth-protecting qualities so that you can survive the years of turbulence ahead, but Hyper-Space Mogambo News Service (HSMNS) does tell you to do that, at no extra charge, and if you don’t buy it, then don’t come whining to me in the future, crying, “Please help us, Mogambo! We suffer because we acted stupidly by not buying gold, silver and oil, and now the damned Federal Reserve and the damned deficit-spending Congress have destroyed us by creating so much money and debt that the purchasing power of our pitiful piles of money is destroyed!”

I will only smile in response so that they will not know what I am thinking, and I will let them naively think that I am considering their request. Wrong! Hahaha!

I want them to suffer so that their children may be instructed, and who will then know not to behave as stupidly as their parents, which is the only bright spot in this whole asinine, bankrupted, fiat-currency, fractional-reserve banking, governmental overspending mess.

Unless you have gold! Then you will prosper! Whee! This investing stuff is easy!

The Daily Reckoning