Let me begin my final podcast of 2015 by wishing all of my listeners a Happy New Year

It certainly wasn't a happy New Year's Eve Day on Wall Street

Normally the last day of the year is a positive one; you normally have a Santa Clause rally and it continues on to New Year's Eve

That wasn't the case today.  The Dow Jones finished its first down year since 2008 - down 178 points

The S&P also negative on the year, the NASDAQ managed to gain about 5% or so

I'm hearing a lot of people blaming the weakness on oil prices

The transports were the weakest index of the year, I think they were down about 17% and this index stood to gain the most from low oil prices

So clearly, if transports are the weakest index, the overall weakness can't be solely because of oil prices

It has to be another reason, and I think it has to be the economy

Oil is being affected by weakness in the economy

Another interesting observation about today's selloff - the market not only closed on the lows, but made its lows on the close

We've been seeing this volatility - all of this selling into the close says that something big is going on here

You get more professionals selling when you sell market on close, and I think this is what is going on here

People are bracing for a very weak 2016

The Fed had interest rates for all of 2015 - it didn't raise rates until the waning weeks of the year

Imagine how the Dow will contend with the threat of rising interest rates as 2016 continues

But the other problem for 2016 is the economy and we got more evidence of an extremely weak economy

I mentioned before the the Atlanta Fed GDP Now has Q4 GDP estimate down to 1.3

Based on the numbers we got today, they are going to ratcheting those estimates down again

First, we got the weekly unemployment numbers, which have been low for a long time - We got the biggest unemployment claims numbers in one week in 10 months

The 4-week moving average is also the highest it has been in 5 months

Remember, when Yellen raised interest rates, the basis for the decision was supposed to be the strength in the labor market

No sooner did the Fed raise rates based on the labor market, but now the labor market is rolling over.

Unemployment is a lagging indicator

What is more indicative of what is coming, is the Chicago PMI number which came out a little later in the morning, which was abysmal

One of the worst economic reports of the entire year

Last month, we got 48.7, which was below expectation

They were looking for a December bounceback to 50

Instead, the index crashed down to 42.9

This is the lowest number since 2009

Order backlogs has been down for 11 months in a row, and this is the worst performance since 1951

The only time we've been at this level is during a recession

It is possible that we are in a recession

It is possible that they will originally report Q4 GDP as positive and then go back later in the year and revise the data to show we were in a recession

That's what they did with the Great Recession

Another reason I believe the economy is weaker than the numbers suggest is because the inflation rate is being under-reported

If the inflation rate is higher than the GDP deflator, then obviously we are in a contraction during most of this recovery

I am looking at what is happening in the economy not in what the government says about the economy

As bad as the numbers  were, it did not promote any reaction in the the markets

My guess is that if we had had a big drop in unemployment claims or a really good PMI number the dollar would have spiked up and gold would have sold off, but we get horrible numbers and nobody seems to care

No matter how bad the data is, the Fed doesn't acknowledge it

No one will believe the economy is weak until the Fed comes out and admits it

The only data the markets won't ignore is the non-farm payroll data, because jobs are all the Fed seems to talk about