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The Latest Jobs Report: Boom or Bust for Inflation, Stock Market, and The Election? - Ted Thatcher #6040 · Financial Survival Network

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  And if we remember, of course, the Fed's job is to do two
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  things. First, manage inflation. We could have a long conversation about whether
• 0:07
  they've been doing a good job at that or not. But the second is
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  is to keep Americans employed and have a low unemployment rate. And so what
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  the jobs number is? The unemployment rate that got released this morning. Ultimately
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  it came in about where it was forecast at last month, it was about
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  three point nine percent. You were listening to Carrie Letz's Financial Survival Network where
• 0:27
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  trying times. You need the Financial Survival Network now more than ever. Go
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  to Financial Survivalnetwork dot com and get your free newsletter and gift. Financial Survival
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  Network now more than ever. And welcome you are listening to watching the Financial
• 0:54
  Survival Network on yours Carrie Letz. Well, we get the news. Unemployment
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  is everything is good, but maybe it's not so good. Maybe those rate
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  cuts that you are counting on aren't really going to ever happen, or maybe
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  they'll happen at a very slow rate. And what does it mean for the
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  election? What does it mean for the economy, all of these things.
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  Well, Ted Thatcher's with us now, and Ted, it's great to have
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  you on the show. Well, your company bright Lake Wealth Management, And
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  what is your outlook on today's report. It's a great question, and Carrie
• 1:34
  it's great to be with you too. I Ultimately, I think what you
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  were hinting at there is the right thing to talk about. Obviously, this
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  market data and certainly the jobs numbers. We always start to think immediately about
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  what the Fed's going to do with that is. They've been at the top
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  of the discussion board anytime we see new data, and I think it's really
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  important carry just to remember what the feds dual mandate really is, to try
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  to get an idea of where they're going to go from here. And if
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  we remember, of course, the Fed's job is to do two things.
• 2:07
  First, manage inflation. We could have a long conversation about whether they've been
• 2:12
  doing a good job at that or not. But the second is is to
• 2:15
  keep Americans employed and have a low unemployment rate. And so with the job's
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  number is the unemployment rate that got released this morning. Ultimately, it came
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  in about where it was forecasted last month. It was about three point nine
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  percent this month March. Now, of course, less Americans are unemployed at
• 2:32
  three point eight percent. Nowluja, Well go ahead, I said, hallelujah,
• 2:40
  hallelujah. I'm dealing the problem. I'll just correct you. Actually,
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  the FED has three functions. The modern FED has three functions. Insure price
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  stability, maximize employment, and ensure that the stock market never goes down.
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  Absolutely one direction is what they want, especially going into an election season,
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  which I think, you know, there's a lot of incentives there that are
• 3:08
  worth noting. But then anyway, ultimately, if more Americans are employed and
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  the unemployment rates lower, I think that that of course leads me to always
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  think about the demand that that creates, and that means more dollars ultimately end
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  up chasing those same goods and services. And when as we weigh out what
• 3:30
  the FED has been doing, obviously trying to keep down inflation, when we
• 3:35
  see less Americans employed, I think that that means that well, if demands
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  high, that can mean inflation is stickier, making it a lot more difficult
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  for the Fed to justify significant rate cuts, even if one of their goals
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  is to keep the stock market as high as possible. Right, all right,
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  so they're balancing three balls in the air, and or maybe they're like
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  the seal seal with the balls up in the air, or the die with
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  spinning the plates right, and eventually those plates, you know, he runs
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  out of hands and the plates come crashing down. What do you think the
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  plates are crashing here? Tip? Ultimately, I think that it's more likely,
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  given the momentum and the pent up nature of the markets right now,
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  that we're going to see a little bit of a melt up before we see
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  anything ultimately end up crashing down. And I do think that, you know,
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  things can't only go up. I think you might agree with me there.
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  But at the end of the day, the market moves heavily on these
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  kind of jobs numbers, and we both know that the sort of heavy weight
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  that the FED can put on the proverbial scales, you know, has a
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  huge effect. And I think that there's just too many, I guess,
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  compounding factors there leading into an election season that make me think that we would
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  see a short term loss before we you know, actually saw it that run
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  up, if that makes sense. And let's not forget the last twelve or
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  thirteen job numbers. The following month have been revised down. It's a Goldilocks
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  number, right. I like that word a lot, absolutely, a Goldilock's
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  number, trying to hit that quote unquote just right. But when the market
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  moves on the short term, well the short term release of it, it
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  seems like it's always short sighted. And I do have I mean, obviously
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  I take my own issues with that, but we can only talk about what
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  the numbers we have at the moment, at least for what we think the
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  market's going to do right now. Yeah, so looking ahead, so this
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  is going to pick the wind out of the sales of the rate cup argument,
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  right, Yeah. So I think, I mean, if we listen
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  to what Jerome pal said at their last meeting, there was you know,
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  that continued dubbish stance on rate increases and basically of course kinting at those decreases
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  despite all of the you know, the issues that can arise with that.
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  And so I just I just think when we have pent up demand drive driven
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  by a lot of Americans being employed, despite you know, JP's desire to
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  get these lower rates, I think it's harder to justify. Yeah, which
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  means that the banking eventual banking crisis is going to happen that much sooner,
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  isn't it. I think that that's worth talking about. I think we talked
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  about that a little bit the last time we were together, and just the
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  DTFP and the Bank Term Funding Program, and that now coming to an end.
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  The last issue of those loans by the FED two of the regional banking
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  system happened in March, and so ultimately, either the FED is going to
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  have to lower rates substantially so the balance sheets of those banks come back to
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  i'll just say, a much better position or even a break even type of
• 6:54
  position on a lot of those you know, long term bond assets, or
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  they're going to have to do something to to you know, continue to create
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  that liquidity. Because what happened, so we all remember spring of the last
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  year when rates, by the way we're lower than they are today, is
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  we had the issues with Silicon Valley Bank and Signature Bank and all those well,
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  well, all those banking collapses, all those banks that don't exist anymore.
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  And don't you think it's funny that on the day when New York City
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  has an earthquake, the market's up four hundred points. I do think that
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  I think as I kind of hinted that there, I think the market's just
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  been looking for a reason to bounce up and sort of I'll say, get
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  back to some kind of normalcy, if if I could even call it that,
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  and really more than normally, I should just say what has been regular
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  the last decade and a half. And I mean, I just think it
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  is very tongue in cheek, and I agree with you entirely on that.
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  Hey, can you imagine how much it would have gone up if we had
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  a volcano? Yeah? Hey? Or a hurricane? What if we got
• 8:03
  a combination of the two? Hey too? Man, the more not just
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  keep piling the natural disasters on. Fortunately, not much damage. And I
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  was actually in New York in twenty eleven for the last week we had north
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  of the city, and it was interesting. It wasn't like it was like
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  a California earthquake where everything just crumbles, uh you know. It was more
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  like you were just kind of shaking around for a couple of seconds and then
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  it stopped. Well, So for investors, what where do you put your
• 8:37
  money to work? I mean, George is looking good, cryptos are looking
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  good. What else? Yeah, a lot of those commodity assets. Like
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  you said, I know, gold hit all time high here over twenty three
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  hundred silver. I know we were even talking before we got started here coming
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  back to life. Agreed on both of those terms. At the end of
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  the day, I think if you're trying to see around the core a little
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  bit, even with the less likely rate cuts, I think that small camp
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  equities will end up being a beneficiary of lower rates when we get there.
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  That might be later this year, that could be early twenty twenty five.
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  But if we're trying to look around the corner and place a bet for you
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  know, a little bit of a little bit further out than you know,
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  the next couple months, I think that that could be a potential. And
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  at the end of the day, I think it's still worth noting, and
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  it's kind of a boring point at this point, but cash is still paying
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  us a lot, and it's hard to turn away at five and a half
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  percent, you know rate that we're seeing on money markets now, and so
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  I think that outside of the commodities, like you noted, I would look
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  at those things too, all right, So cash is still king, but
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  the inflation, so it'll be interesting to see what those next inflation numbers are
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  like IFED can't do much, but the the statistics mills in Washington can be
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  very helpful to incumbents, can't they They absolutely can't. I think that it
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  you know, we laboring that point we could go into, but I just
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  would put up in in it and say absolutely. I think that when we
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  look at statistics, if we're not just looking at the real raw data,
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  they can tell us whatever we want to see. Hey, what they say
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  is statistics lie and liars use statistics, right, and then there's lies,
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  damn lies and statistics. I think Churchill said that one. So, and
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  we know that this job number is going to be revised down, right,
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  I think you know, I saw some forecasts at three point nine, and
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  then they came in again at three point eight, which is where the initial
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  number, of course came out today. I think it's reasonably likely that it
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  would be revised down, you know, back to what those other forecasts may
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  may have indicated. And so, you know, it seems reasonably likely to
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  me that that would be the case. And obviously we'll see if the market
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  wants to shrug that off too. Do you remember you remember ever seeing this
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  many downward revisions on job reports. Since you've been doing this, you know,
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  I do not. At the end of the day, I do not.
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  I mean, I've been you know, in investments now since twenty twelve,
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  and at the end of the day, I think that, well,
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  we've seen a lot of revisions not just on the jobs numbers, too,
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  on these inflation figures that have come out the last year and a half,
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  you know, trying to get an accurate read on those. Now, well
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  then there's you know, we could go down a list of those as well.
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  Yeah. Well, going to the cynical economic site otherwise known as zero
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  hdge dot com, they said that the print was literally all part time jobs
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  and illegals, you know, kind of sums it up. Well, I
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  think, I mean, I think that absolutely that there is a point of
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  information there that's quite interesting. I agree it's probably a cynical perspective, but
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  you know, it's still worth noting. Yeah, yeah, well, all
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  I know is here in Florida, economy in season was booming. You couldn't
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  get in restaurant. I know, it's all anecdotal, And as the late
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  great Senator Daniel moynahan once said, the plural of anecdote is not data.
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  But when you go around enough and enough and you want to go to your
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  favorite restaurant and you can't get in there for a week, all right,
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  and that never happens, you know, then you start looking and yeah,
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  interesting, Hey, do you have any personal opinion about real estate? I
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  haven't at the home builders lately. When I looked at them, like three
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  weeks ago, they were trading at the all time record highs, you know,
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  So I think that as far as the commercial building, that's actually from
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  what everything I've seen is continue pretty reasonably in a surprising way to me.
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  Now, obviously the residential builds have gone down substantially, especially with mortgage rates,
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  you know, skyrocketing. However, you know, if and I guess
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  this is a little bit more beforeward look and maybe not what you asked necessarily,
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  but if we do get you know, if we do get the rate
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  decreases later this year, I think that's going to end up meaning a whole
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  lot of well positives when it comes to commercial because so much if you look
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  at the raw data of the commercial loans, not new builds, but the
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  loans that have been refinanced, it's mostly maybe you've you know, talked with
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  other guests about the whole pretend and extend mentality. A lot of these banks
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  have taken on their commercial loans, have no che and then they exactly they
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  have no choice. And at some point, though, you know, something's
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  got to give. Either they will not be able to I'll just say,
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  extend these commercial loans out anymore, you know, just kind of playing with
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  the numbers and the financing of it, and they'll have to write down those
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  losses, just like that banks did on those you know, treasury assets last
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  spring that caused them, you know, their balance sheets to explode or you
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  know, or of course the rates come down and they can actually get those
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  you know, I guess values those cap rates to come back up, right.
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  Hey, So the basically Lenar, which probably is the Prima home builder,
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  their stock peaked March first, told Brothers peaked March twenty eighth. I
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  have a feeling they're not done hitting new highs. And even though in California
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  they said the number of the building permits was down forty some odd percent from
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  last year, and last year was not such great year either, you know,
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  and make shit kind of wonder here, huh. I think that you
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  know, there's probably a couple of factors there. I think ultimately the market
• 15:00
  market has moved so much more momentum these days than on the fundamentals and even
• 15:05
  still though to lend the credence and give the devil his due on the fundamental
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  side, especially like a Toll Brothers. You know, the demand there in
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  the residential market is still you know, just there's just not as many homes
• 15:18
  to purchase because so many folks aren't selling, as you know, because they
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  all locked in rates that were honey, you know, just absolute honey of
• 15:26
  a deal, but you know, two x percent on her thirty year mortgage,
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  and who wants to sell on there in that situation. Yeah, Well,
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  supposedly inventory is going up in certain parts of Florida. Could be seasonal.
• 15:39
  Usually this is this the buying season in Florida, the first season.
• 15:45
  I guess we're going to find out. Well, just tell us where do
• 15:48
  we find you? How do we connect with you on the web. Oh,
• 15:52
  you can always find us at our website, brightlakewealth dot com. That's
• 15:56
  usually the easiest way to get in touch with this. All right, excellent
• 16:00
  to Ted's site in the show. That's this interview on Financial Survival Network dot
• 16:04
  com and make sure you sign up for a free newsletter. Also check out
• 16:08
  our companions site Inflation dot Cafe where dollars go to Die. And if you
• 16:15
  got a question for Ted myself, shoot us an email kl at Carrie LUTs
• 16:21
  dot com. Ted. Great to have you back on We'll talk to you
• 16:23
  again real soon. Thanks, Carry, I have a great one. Thanks
• 16:26
  for listening to Carrie Letz's Financial Survival Network, your solution to today's trying times.
• 16:33
  For the latest, go to Financial Survivalnetwork dot com. Financial Survival Network
• 16:40
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