* 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.

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