The Fascist Component of the Unemployment Claims Data

As you have probably heard, unemployment-claims are the lowest they have been in 42 years. However, I believe there is now a substantial political component to the data.

First, Republicans have about 10 more governorships now than they did in 2009. So, in general, it is probably harder to get unemployment benefits today. For example, one study found that Florida’s unemployment benefits are “virtually inaccessible.” Stricter eligibility rules might not effect initial claims, but they certainly would lower continuing claims.

Second, corporate lawyers may have found a loophole when doing layoffs. In a story about a massive IBM layoff, Bob Cringely reports:

“Some companies in some states have been known to report terminations in a way that disqualifies workers, thus saving the company money on unemployment insurance premiums.”

Third, corporations have been assiduously scrubbing their payrolls clean of citizens in favor of foreign employees working on visas such as the H-1B. The size of this scab army is probably large enough now to put a dent in the unemployment-claims data. To qualify for benefits, a worker must be ready and able to go to work immediately at any suitable job. An H-1B worker is only allowed to work for his sponsor, so his only options are to get rehired, find a new sponsor, or go home. I found conflicting opinions on this, but in general, foreign workers have fewer rights, which of course, is the whole reason why corporations favor them over citizens.

Essentially, as the USA moves to a more fascistic system, it is reasonable to expect an impact on the unemployment data. I don’t know how big the fascist component is now, and would love to see some research done by a professional economist.

Because of this, the withholding-tax data might be giving us an even clearer picture of the jobs situation than the claims data.

FICA Flops

Below is a chart that I sent out to my DailyJobsUpdate.com subscribers a couple of weeks ago. So, this is a sample of the kind of analysis you get when you subscribe (click chart to enlarge):

Compare

On the left side is the annual growth-rate of withholding-tax collections plotted daily for 2008. On the right side is the same metric plotted since November 1, 2015. As you can see, things have weakened badly over the last eight weeks.

This plot is similar to a very long moving-average, and it has only turned down twice since 1998: before the 2002 recession, and then before the 2008 recession. It takes a lot of deterioration to bend it over, so this is a significant development. The growth-rate will almost certainly continue to weaken going forward since shorter-term measures are in the 2% area as we speak.

Note: FICA/Payroll/Withholding taxes are reported every business day by the Treasury Department, so the annual growth-rate can be calculated each day for the trailing year.

Apple’s Crappy Computers

Two months ago, I reported on The Apple Fanboi Rebellion. Those complaints were about Apple’s software and developer policies. But now, the complaints have extended to Apple’s horrible hardware. It turns out that there are no Macs that will work with the hot new Oculus Rift virtual-reality rig.

The Oculus Rift needs a high-end GPU, and Apple just doesn’t do that. Not even its top-of-the-line Mac Pro, for which they have the gall to charge $6,000. Apple is still top dog, but they have a lot of huge holes in their game that competitors can exploit. If the Oculus Rift is a hit, there will likely be lots of Mac users defecting to Windows.

Click here to see what Oculus founder Palmer Luckey had to say on the subject.

Rising Wedge Pattern on NASDAQ

The rally since February on the NASDAQ-100 index (NDX, QQQ, NQ) has taken the shape of a bearish rising-wedge pattern. See the green lines on the chart below (click to enlarge):

Rising Wedge Pattern

Rising Wedge Pattern

The NDX may be back-testing the neckline of its 4Q15 top at 4486 (see the blue line and arrows). This sets up a convergence point at the red X where the wedge reaches its apex just as it reaches the blue line. This may be an excellent area to for a short trade.

Widening out the view, we see that the wedge may be forming the right-shoulder of a giant head-and-shoulders top pattern:

Head-and-Shoulders Top

Head-and-Shoulders Top

The left shoulder isn’t well-formed, and the neckline (pink) is raggedy, so it isn’t the best H&S, but it has the look and should be taken seriously. So, if it completes, where would the target be? Answer: way down there. To find a likely target, we have to widen out to a weekly chart and scroll way back. The height of this pattern portends a plunge down to the 2014 lows at 3414 (green line and arrows):

Head-and-Shoulders Targe

Head-and-Shoulders Targe

It’s also possible that the NDX will rally up further and print its right-shoulder at 4694, but that wouldn’t change the target of the H&S.

How could such a cataclysm befall the market? There are a few headwinds blowing right now. First, the Fed Heads have started talking hawkishly again. Second, FICA tax-revenue is rolling over in the same pattern that it did in 2008; I will post a chart of that soon. And finally, Bernie Sanders crushed Hills in all three primaries on Saturday, and a recent poll showed him crushing Trump by 20 points in the general. So, we just might be looking at a market-hostile socialist president (to go along with a hostile Fed) in November. It would be a miracle if the market didn’t throw a major tantrum at such a scenario.

To learn how to play the rising-wedge pattern, see Chapter 16 in my book: The General Theory of Day-Trading.

A Final Solution for Joe Sixpack

Since the mass liquidation of the American blue-collar middle class began with NAFTA twenty-five years ago, Joe Sixpack hasn’t complained, let alone resisted, very much. And Establishment oligarchs like Mitt Romney were content of have millions of workers pile up on the food-stamp rolls as they were feverishly shipping factories down to Mexico and over to China. The massive profits they made from cheap labor far outweighed any taxes they had to pay to deal with the wreckage they created in the USA.

But now, something has gone terribly wrong. And the pristine status quo of America’s process of de-industrialization has been disturbed: Joe Sixpack is fighting back. He’s voting for Donald Trump.

America’s carpetbaggers are outraged; incensed, that Joe Sixpack is no longer content to live out the life of poverty they have bequeathed to him. I guess they never thought that it would happen. How ridiculous.

So naturally, something must be done. What that is, is not yet known. It’s early in the process. We are only at Stage One: demonizing the enemy.

Establishment organ Nation Review is leading the charge against Joe Sixpack, publishing a shockingly vitriolic attack by theater critic Kevin D. Williamson who doesn’t waste any time calling Donald Trump a Nazi right in the title: The Father-Führer. But don’t bother reading the whole thing because it is largely incoherent. For example, here’s a quote:

“The family-life numbers, on the other hand, came down on us like a meteor. Before the war, divorce had been such an alien phenomenon that it animated such shaggy-dog stories as The Gay Divorcee, a play in which a fictitious act of adultery had to be invented to move the plot forward.”

WTF, right?

In short, Williamson blames Joe Sixpack’s suffering on his own immorality. Exporting over 50,000 factories and importing tens of millions of workers had nothing to do with it. If only Joe didn’t have that divorce, he would have no worries.

Absurd.

There is a chicken-and-egg question here: Did Joe Sixpack turn to OxyContin before or after the plant where he worked was sent to Mexico? Did his wife divorce him before or after he lost his job? Williamson thinks it was before.

Ridiculous.

Jobs don’t cure all ills, but they do indeed cure quite a lot of them.

Here’s another quote:

“The white American underclass is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles.”

This is the way guys like Williamson used to talk about black people. Not even Vladimir Putin talks like this about America.

What is Williamson’s solution? Keep the borders open, and give Joe Sixpack a U-Haul so that he can move out of fly-over country and get a god-damned job already!

“They need real opportunity, which means that they need real change, which means that they need U-Haul.”

So, let’s see…if we give a U-Haul to each and every one of the 45 million people on food stamps, and then send them to…where exactly? Williamson doesn’t say, but he did mention fracking:

“…get off your asses and go find a job: You’re a four-hour bus ride away from the gas fields of Pennsylvania.”

I guess he hasn’t heard about the glut of oil and gas and the plummeting rig counts. And what about older Joe Sixpack’s and Jane Sixpack? Could they work on drilling rigs? Probably not. The truth is that in Kevin D. Williamson’s America, people would be living in those U-Hauls.

The most telling quote is this one:

“The truth about these dysfunctional, downscale communities is that they deserve to die. Economically, they are negative assets. Morally, they are indefensible.”

This is chilling because the Republican Establishment is also known as The War Party. When they start to demonize you, then you need to fear for your life. Literally. Would they carpet-bomb small-town America just to hold onto power? Perhaps justified with a false-flag operation? Maybe so.

Joe Sixpack needs to watch his back.