He warns the head of parties against believing their own lies.
Well, it's too late to warn politicians on either side of the aisle in America about believing their own lies. There's a perverse Adonis-like affliction that sees our political leaders fall head over heels for their own words even as they drip out their mouth. Oddly, the people disbelieve almost all they hear unless it's election season and then they take their guy at face value. Still, it's been a long time since a politician in America has gotten the masses to rally around something important...one nation, under God, indivisible, with liberty and justice for all.
It's a contradictory situation but then again we are a nation of contradictions.
We are very rich but with scores of poor people. We have the best universities in the world but freefalling grades among the k-12 education system. We live in the land of unlimited lawyers and two million prisoners. A nation built on an amazing Constitution which many are trying to dismantle, mostly by using the freedoms in the Constitution. It's an odd time in the country that is being ripped apart by the people hired to heal it. For many these contradictions are breeding a certain kind of contempt. Being pulled in all directions makes all paths look crooked. We have become a nation of skeptics, dizzy from non-stop spin and frustrated and fading hope.Contradictions of the Market & Economy
As we head into Friday's jobs report each day brings greater confusion and more questions than answers when it comes to the economy and the stock market rally. The slew of revenue misses have been amazing and yet stocks continue to rally higher more or less on the word of chief executive officers that say nothing has changed for the entire year, implying any shortfalls in the first quarter will be made up in the second half of the year. It's an interesting leap of faith the market seems willing to risk. Of course for many there is no risk to the market as long as the Federal Reserve continues to print money.
I continue to believe the Fed's impact on the market is slim at the moment although there is an impact of fresh money trying to get ahead of that impact of the Fed's extraordinary efforts to spark economic growth. I think the actual Fed-induced top comes with the usual pomp and circumstances and just about everyone will be drunk with glee. Right now there are too many bears and too little volume in the stock market to point to a bubble on the verge of bursting.
Case - Shiller Index saw amazing year to year home pricing gains for the month of February. For the first time since 2006, January and February saw all 20 cities with year to year gains. Moreover, there were eight cities that enjoyed month over month gains and double digit year over year gains. Yet despite the obvious momentum in home prices ownership rates continues to plunge.
According to the Bureau of the Census, American homeownership dropped to its lowest level since 1995, of 65.0%. Interestingly the area with the fastest growing home prices, the West (see chart above) has the lowest homeownership rate of only 59.5%.
This is an amazing contradiction but speaks to a different reality - the Dropout Nation that's given up on owning and would rather pay Wall Street investors exorbitant rent than buy the house themselves. Ironically vacancies are lower for rentals and homeownership, the former from demand by regular folks and the latter by investors in a win-win situation. Oddly I don't hear bubble talk from many when it comes to housing prices or the housing market (Save for David Stockman who thinks everything is a bubble except all the doom and gloom).Market
The jobs report out from ADP was a major disappointment. The street was looking for 150,000 the report came in at only 119,000 matching March's number which was revised lower. It's clear the rate of job growth is in freefall after peaking at 273,000 in November and even bumping to 237,000 in February.
The glaring decline in manufacturing backs up data from regional fed reports over the past couple of weeks. Manufacturing was supposed to save America and now I'm wondering what's going to save manufacturing?