by Robert Gore
From the last Crisis Progress Report, dated October 1: “Assume a rally like the one in 2008 is in the offing. If the 2008 rally’s timing is any guide, this one will start between now and New Year’s, but there are no assurances; it may begin next year.” SLL did not know then that the rally was already underway, the market having made its recent closing low on September 28. Now that the market has rallied, in the perverse way that markets work, Friday’s employment report, the best in some time, may well kick off the next down leg. October has had its share of market crashes, so with fear high at the beginning of the month, the market rallied and October was its best month in years. November and December are often strong, marked by end-of-the-year “Santa Claus” rallies. Again, in their perverse way, markets this year may leave a lump of high-sulfur-content, CO2-releasing, soon-to-be-outlawed coal in investors’ stockings.
This latest employment report will be revised multiple times; it is subject to a variety of abstruse statistical criticisms; it is seasonally and birth-death-model adjusted; it shows that almost all the jobs in October were taken by older workers, and finally, employment is, as any economist will tell you, a lagging indicator. Whatever the ambiguities in the employment report, there is no gainsaying that debt contraction is rolling through, and roiling, the global economy in textbook fashion. Global debt, central bank and government-force fed, approaches $225 trillion and has grown faster than global GDP for decades. It is the most massive in history, measured in either absolute terms or in relative terms against global GDP.
