When I posted my note on 7/6/09 titled “*Charts Of The Week: Unemployment's Double Top”, I knew almost immediately how right I was going to be on calling a top in the unemployment picture. Why? That’s easy - no one, other than the math, agreed.
Wall Street’s narrative fallacies always make sense because they are fictional. There are inconvenient truths associated with non-fictional stories – particularly those backed by quantified mathematics.
Below Andrew Barber and I have 2 charts:
1. The first is just refreshing that Chart of The Week from last month – this is all about rate of change. This is now very straightforward. There was a double top of fear established by unprecedented sequential monthly unemployment accelerations of 50 basis points. This morning’s was a deceleration on BOTH a sequential AND an absolute year-over-year basis (see chart #1 – there is only one red bar in it).
2. The second chart should be forwarded to all of the Depressionistas. Not only is the notion of Great Depression style unemployment ridiculous, it’s quite reckless in its fear-mongering rhetoric. I think I called the short side of 2008 as well as most, but that didn’t mean I needed to buy into this consensus groupthink about the 1930’s. Never mind Depression, the peak in this US economic recessions unemployment rate is unlikely to surpass that of 1982!
Other than the shorts getting royally squeezed for one last day of Macro Matters, what do we do with all of these charts and green bananas flinging around on our screens? I’m patiently making some sales.
Ben Bernanke is way behind the curve. Both the US currency and bonds markets are reminding him of as much this morning. Once he rightly signals a rate hike versus this ridiculous “emergency level of ZERO”, the US Dollar will stop going down at the same rate. When that happens, stocks will stop going up at this rate.
Rate of change matters.