The Deliberate Ignorance Of The Markets

     In the practice of delusion over reality one will not find a more willing group of participants than the stock market. This collection of smart people who desire fallacy to fact and mediocrity to merit, react more out of adherence to group think than they do from a close examination of data. A case in point was the release last Friday of the employment number for the month of January, which was a dismal 113 thousand jobs added in the month. The analysts were expecting only a mildly less pathetic number of 180 thousand. The market, which if propelled by data and facts, should have gone down several hundred points, instead made gains across the major indices of about one percent.
     One of the favorite activities of the last few years by the market movers has been to rummage through the burnt out structure of what was once a thriving economy and find a charred nickel they can use to say that things are looking up. That charred nickel last Friday was the two tenths of a percentage point rise in the work force participation rate, which is still at a 35 year low. The work force participation rate is the percentage of working aged adults who are employed or actively seeking employment. The market analysts and participants saw the miniscule increase as a positive sign for the economy.
     But the work force participation rate did not increase because more people were working, but rather because more people were looking for work. This country, under the leadership of Barack Obama, has its largest group of unemployed individuals of working age than at any other time in our history. Over 90 million persons are unemployed in this country, a record of failure for the Obama administration and its policies.
     The reason for the slight uptick in the labor force participation rate recently is the laid off holiday workers, who are much more likely to participate in the labor force as "actively pursuing employment." I would not make the hasty determination that the uptick is a trend, we will see in the coming months if those newly unemployed persons either find jobs or become discouraged and remove themselves from the labor market, thus sending the labor force participation rate tumbling.
     It has been my contention that since the Federal Reserve has essentially pumped 3 trillion dollars of wealth into the markets over the last four years, market participants accept data from the government that has become ever more detached from reality. And the Federal Reserve's bond-buying spree has been an abject failure, according to their own metrics for ending the program, which have not been met. But they are smart enough to know that to continue it much longer would completely collapse the dollar. So once again, the people of this country will suffer from higher inflation, chronically high unemployment, and flaccid economic growth because of meddling by academics who have never worked in the private economy they have destroyed through their ignorance.