Bizarre Market Action Explodes Following Super Tuesday
Dominique de Kevelioc de Bailleul: 2012 may turn out to be the year that, when it comes to a close, Americans will feel like they were under the influence of some kind of psychedelic drug.
Massive disconnects between the course Washington is taking us and the vote tallies at the polls and in the markets cannot be much more stark. It appears that a grand set up for a catastrophe lurks ahead.
Take for instance the past two data points from the Bureau of Labor Statistics (BLS). On Friday, the BLS reported 240,000 new jobs were created for the month of January. For the prior month, the BLS reported 200,000 jobs were created, for a total of 440,000 jobs for the two months. Get my next ALERT 100% FREE
It suffices to say, government statistics should be taken with a grain of salt, or, as Greenlight Capital’s David Einhorn had said more bluntly last year: government statistics should be viewed as “propaganda.”
But the latest two reporting months by the BLS go much, much further than the usual propaganda. These figures from the BLS are truly bizarre.
“Actual jobs, not seasonally adjusted, are down 2.9 million over the past two months,” stated TrimTabs CEO Charles Biderman in a video posted on zerohedge.com. “It is only after seasonal adjustments—made at the sole discretion of the Bureau of Labor Statistics economists—that 2.9 million fewer jobs gets translated into 446,000 new seasonally adjusted jobs.”
What would happen to the stock market (NYSEArca:SPY) if the BLS fudged a little—as it does from time to time—and reported, say, a drop of only a million jobs in December and another million in January? Two million jobs lost surely beats nearly three million lost.
Along with Biderman’s analysis comes an old hand at the markets, Richard Russell.
Famed stock market newsletter publisher Richard Russell has seen it all, the Depression, WWII and all the recessions post-WWII. He’s been writing for as long as some baby boomers have been alive. Last week, KWN’s Eric King posted highlights of Russell’s most expressive piece he’s penned in quite some time.
“If you listen carefully, you can hear the heart-beat of the market. It’s a slow, heavy beat, as if the market is waiting for something, stated Russell. “That something is going to be BIG. Bigger than what anyone is expecting.
“The sheer size of this still-forming top is scary. I think this top will be followed by a phenomenon known as the Kondratief bear cycle, a cycle that can endure for as long as 20 years. The other name for it is the nuclear winter, a rare and dangerous phenomenon that can last for a generation.”
Either the world is fooled by phony U.S. employment data or the Exchange Stability Fund (ESF) is working overtime. The disconnect between commerce and the stock market (NYSEArca:DIA) is becoming quite exaggerated.
But an index that gives us a clue to how ridiculous the jobs data have become is the Baltic Dry Index (BDI). The BDI has crashed.
Below, is a graph of the BDI superimposed on the S&P 500 (NYSEArca:SPY). Except for the divergence between mid-2005 and mid-2006—a period during which new vessels were entering the market to satisfy crazy GDP growths worldwide from central banking induced global housing boom—the two indexes positively correlate rather well.
But, starting in Q2 of 2010, the BDI headed south while the S&P 500 (NYSEArca:SSO) continued to soar off its March 2009 low. I appears that U.S. stocks have been ‘pumped’ while the world economy disintegrates in the background. And according to the BDI, the global economic situation is looking as bad as it was in 2009.
Of course, the S&P 500 pump to match grossly inflated employment statistics from the BLS are politically motivated. Something must give, but the timing of the reset in the financial markets lies in the hands of Washington—for now.
As long as stocks (NYSEArca:UPRO) remain elevated, President Obama may become the favorite against a Mitt Romney candidacy. Biderman alludes to this obvious ploy.
But if the market crashed tomorrow (NYSEArca:SDS) and the U.S. goes to war with Iran the next day, Republic candidate for president Ron Paul would most likely receive a huge boost to his campaign, as Americans wake up to Paul’s message of peace and liberty from the banker cartel. Washington fears Paul, but also know its shelf life is limited. Congressman Paul is 76 years old.
Today, those who believe Paul is off the wall with his message of reality would most likely resonate with millions of more Americans who suddenly began to live in the world of reality. To them, Paul would make much more sense, and Romney would appear to the voter as another foolish warmonger, especially as the reality of a war with Iran doesn’t jibe with the confident posture of the U.S. hawks. Iran is no Iraq.
According to The Hill, 49 percent of Americans still think the U.S. should use military force against Iran.
In-the-know geopolitical analysts suggest an attack on Iran would kickoff WWIII. How many Americans would vote for a WWIII candidate to support Israel? 49 percent? Not likely.
What percentage of those 49 percent know that a war with Iran is really a proxy war with Russia and China?—maybe the same percentage who still believe Iraq is hiding those WMDs, and still believe the U.S. economy is on the mend?
If The Hill rephrased the question and asked if going to war with Russia and China to do Israel’s bidding is consistent with American values, not many would think the idea was a sane one.
But it may be too late.
Historically, a candidate with a sizable lead following the avalanche of presidential primaries on Super Tuesday ends up getting the nomination to take on a sitting president. Super Tuesday falls on March 6, with 24 states chiming in, representing 41 percent of Republican delegates.
Coincidentally, in March, the fate of Greece hangs in the balance. That, too, could be a catalyst for another stock market meltdown and the final nail in the coffin of the U.S. economy—though that nail is coming at some point anyway. It’s the timing of the event that’s suggested here.
In early January, Gerald Celente issued his 2012 Trends Research forecast. The gist of the report is: The global financial system could “spiral out of control” some time “by the first quarter of 2012.” Maybe soon after March 6? Could Celente have nailed this one?
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