The Dow Jones had its worst week since January - closed the week at 17,568, down 518 points

Friday's drop alone accounted for 163 points

Capital One had a huge earnings miss and announced big layoffs

Big losses on bad debt

All the economic data from this year has been negative

There is no precedent for the Fed to raise rates when all economic indicators are down

Normally The Fed stimulates when the economy is down

The most interesting economic news on Friday was a leak from the Federal Reserve

Fed employees' internal projections are way below the Fed's public estimates

Projections go all the way out to 2020 and can only amount to guesses

The document is posted on my Facebook page

Real GDP: 2015: 2.31 way below the official forecast but still overly optimistic

Real GDP for 2016: 2.38 - 2017: 2.17 - 2018:1.76 - 2019:1.75 - 2020:1.74

This shows an average of under 2% for the next 5 years

If the Fed believes its staff's estimates, why would they be talking about raising rates?

Inflation numbers are even more difficult to believe:

2015: 1.15 - 2016: 1.54 - 2017:1.76 - 2018:1.89 - 2019: 1.92 - 2020: 1.94

How can they possibly know? It looks like they just picked numbers somewhere below 2%

They even have the core PCE

2015: 1.33 - 2016: 1.52 - 2017: 1.78 - 2018: 1.9 - 2019: 1.92 - 2020: 1.94

Fed Funds Numbers:

2015: .35%(implies one rate hike) - 2016: 1.26% - 2017: 2.12% - 2018: 2.8% - 2019: 3.1% - 202 : 3.34%

After 5 years of tightening rates would still be at historically low levels

This indicates how little confidence the Fed has in the economy

They predict the yield on the 10-year note to rise 2.63% in 2015 up to 4.2 in 5 years

One of the most ridiculous assumptions is unemployment: 2015: 5.34% - 2016: 5.24% - 2017: 5.18 - 2018: 5.15 - 2019: 5.15 - 2020: 5.16

These are all just guesses. How do they know?

This shows by the Fed's own estimates that employment is not expected to improve

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The Fed expects the economy to grow even slower over the next 5 years than during the preceding 5 years

The Fed is either ignoring staff's numbers to paint a rosy picture or they don't trust their own staff

I think the market can't handle the truth and that may have been the reason for Friday'd drop in the Dow

The only thing that will stop the market from going down is some talk from Janet Yellen to dial back the rate hikes and to open the door to QE4

Another number that came out on Friday which confirms the slowdown in the economy is the new home sales

The current rise in new home sales is primarily for those trying to beat the Fed

June's number was awful: 482,000 against an expectation of 550,000

The last 2 month's estimates were revised down

The July plunge was the biggest number since November of 2014, and the biggest miss in a year

There is also an interesting statistic on new homes: prices are continuing to rise

It now requires 10 times your salary to buy a new home

In the 1950's it took 2 times a year's salary to buy a new home

All the government spending on "affordable housing" has managed to increase the cost of a home from twice a worker's salary to ten times a worker's salary

That is a 500% increase - that is far beyond failure

This also illustrates how much our standard of living has fallen

New York State passed a minimum wage of $15/hr, which applies to chains of over 30 restaurants

Because employers cannot be forced to pay wages higher than workers' productivity allows, employers will be forced to fire some employees and will seek automation to replace unskilled workers.

Just as workers can not be expected to work for free, employers cannot be expected to maintain a business at a loss, for the benefit of the employees

This law will also create a competitive advantage for smaller fast-food restaurants or will drive large franchises out of New York

Gold prices continued to be under pressure until Friday