S&P responds to bad news with new high; DJ just barely off record high

Dollar continues to fall

The currency traders still have not accepted the significance of bad news

Lower dollar will be the trend

Friday got a trifecta of bad economic news

Thursday Weekly Jobless Claims number declined to 264,000 - lowest weekly jobless claims in 42 years

Why are there so few job losses? Because so few people are getting hired

Government numbers come from the Birth/Death Model, which assumes a certain number of businesses created each month

What if these businesses are not actually created?

This would explain lower number of unemployment claims

There's no way we can say that the economy is the best it has been in 42 years

Empire State Manufacturing Index, which was weak last month, expected to be +5, came in at 3.09; below estimate for the 4th month in a row

Both Business Expectations and Hiring declined from April to May

Industrial Production Capacity Utilization was expected to be flat; down again .3%

This is not the 5th consecutive monthly decline in Industrial Production; longest losing streak since 2009

Consumer Sentiment Number 95.9 in April - expected to hold steady - came in at 88.6; biggest drop since December 2012, and biggest miss ever

If the job market is so strong, why is confidence plunging?

The percentage of employees who fear losing their jobs is at highest level since March of 2009

The bubble is rapidly deflating

Unofficially, I think we have been in recession for the entire "recovery"

The government is not accurately measuring inflation in the GDP deflator

The Fed has not forecast a single recession

Recessions always happen contrary to forecasts

If we are in a recession there can not be a rate hike

At some point they are going to have to acknowledge that the numbers are not accurate

The unemployment rate is going to have to tick up at soe point this year

At some point after the end of the quarter it will become obvious that there is no rate hike coming

The only question is, What is the Fed going to do?

The Fed has not managed to shrink the balance sheet, and further QE will take the deficit to a whole new level

This will put massive downward pressure on the dollar

Oil prices will spike

Cheap gas prices did not create a bounce in Q1

Consumer Confidence will plunge

Reality is finally going to set in on the failure of the Fed monetary policy