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Non-Farm Friday – Is America Working?

It's Non-Farm Payroll Day!  

Much more exciting than Cinco de Mayo, which we properly celebrated with quesadillas and sangria last night.  We celebrate Non-Farm Payroll Day by checking our Futures levels (we're short per our morning Alert to Members) and having some coffee – not as much fun but it can be more profitable.  This is one of those days when it's great to have a Futures account as the markets don't open for a whole hour after this major market-moving report is released.  

As you can see from the chart above, after fixing the disaster of the Bush collapse, Obama's job-creation record has been amazing – the best since Clinton (still the champ with 20M jobs created) and the monthly gyrations up and down are really not a big deal in the grand scheme of having now 6 years where we're averaging 200,000 jobs added per month (14.4M jobs).  

UNFORTUNATELY, we still haven't done enough to reverse the downtrend in total compensation – a number which takes into account hours worked, salaries paid, etc.  Total Annual Compensation has dropped by 15% of our GDP ($3Tn) since 1970 and workers of the World have failed to unite to reverse this trend in any meaningful way (raising minimum wages to $15 over 5 years is a small start).  

As members of the investing class, we can take comfort in knowing that screwing over the workers is VERY profitable for the Corporate Masters who pushed this disparity into overdrive since 9/11, increasing Corporate Profits by 120% in the past 15 years.  So hurray for us, I guess – unless of course you have someone you care about who has to work for a living – then it really sucks for them…

Of course, it's not all good news when you don't pay your workers enough to live on.  For one thing, they can't afford to buy homes and home sales are a very important driver of our economy.  Of course, as investors, we simply shift our money away from home builders and into REITs who own a lot of apartments and out of Durable Goods makers (things that go in homes) and into entertainment apps that help people pass the time in their apartments.

So we can destroy the economy AND make a profit at the same time – high five top 1%'ers!  Even better, we can buy payday loan lenders or, like JP Morgan (JPM) and other beloved Banksters, we can make $500M running food stamp programs, which eats up 25% of the program's allocation paying JPM to provide food stamp debit cards.  Sure, for the average person, you get a credit card for free and get 1% of your purchases rebated but JPM CHARGES poor people to use their cards – including 0.40 just to check their balance.  

Like running private prisons (another fun investment), there are so many ways to make money off human suffering – that's why the GOP is always looking for ways to cause more of it!  Currently 1 in 7 Americans receive SNAP assistance and, 52% of all Americans ends up using food stamps at some point in their lives – those are ugly numbers and it shows you how poor the quality of some of these jobs are as it certainly doesn't reconcile with 5% unemployment (but it does make sense when you realize 70% of WalMart "workers" are on food stamps as they don't make enough to live on).  

Raising the minimum wage allows tens of millions of people who have jobs that don't pay them enough to be over the poverty line to get off food stamps and that saves taxpayers money but takes money away from JPM and the other Banksters who prey on the poor so, of course, they lobby against it.  JPM doesn't want to pay their tellers $15/hr either!  In fact, 1/3 of bank tellers in the US recieve public assistance to supplement their deficient incomes and that cost taxpayers $112M in benefits – money we PAY to JPM to run the food stamp program their employees need because they don't pay them enough to live on!  

“Bank workers in New York, across the nation and around the globe are being squeezed, very much as other hourly workers in the economy are,” the Committee for Better Banks noted. “Banks’ internal employment practices, just like their external practices, increasingly drive inequality.”

Take Wells Fargo (WFC) chief executive John Stumpf. Listed as one of the country’s most overpaid CEOs by Bloomberg, Stumpf earned $22.9 million in 2012, a raise of almost 16 percent from his 2011 pay of $19.8 million.  So what does the average teller at Wells Fargo make? Less than $11 an hour, or about $22,600 a year, according to job site Glassdoor.com – that's 1/876th of what the CEO makes. While that’s above the federally mandated baseline wage of $7.25 an hour, the pay is low enough to qualify a family of four for food-stamp benefits

8:30 Update: OK, enough bitching about Capitalism – let's make some money!  As expected, NFP came in a bit light and the markets did not take it well and we're down about half a point in the Futures.  Still 160,000 jobs added but 190,000 expected by economorons, who clearly didn't read yesterday's ADP report, which missed expectations by 40,000.  Overall, wages are flat so, at this point, the move down in the Dollar is overdone and we can make Futures money by:

  • Going long on the Nikkei (/NKD) at 15,900 with very tight stops below that line
  • Going short on Gold (/YG) at $1,300 with very tight stops above that line. 
  • Going long on the Dow (/YM) at 17,500 (now 17,475) with very tight stops below that line. 
  • Going long on the Nasdaq (/NQ) at 4,275 with very tight stops below that line.  
  • Going long on Gasoline (/RB) at $1.475 with very tight stops below $1.47.

Obviously, we're taking the money and running on the shorts from earlier and playing for the bounce again.  My premise is the weaker jobs means no Fed hike and THAT is what the markets really like to hear.  

Now, if you are reading this later than 8:45 - it's because you aren't on our mailing list as our Members get this newsletter pre-market every morning, while the post is in progress even!  You can sign up for it here

Time to go to work in our Live Member Chat Room.  Speaking of wages, we made $115 in 5 minutes playing the Nasdaq (/NQ) Futures and then we made $568.50 in 5 minutes playing Gasoline (/RB) Futures during Wednesday's Live Trading Webinar so, if you want to get an idea of the techniques we teach our Members at Philstockworld, you can check out the replay here – unless, of course, you already make more than a $4,000 hourly rate – then we have nothing to teach you…

Have a great weekend, 

- Phil

  

Provided courtesy of Phil's Stock World.

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