“How to Cook” by Richard Nixon

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Equity markets put in mostly positive results this week while digesting meek employment data. The lagging indexes such as the NASDQ and the Russell 2000 made decent gains while the Dow and SPY basically flat lined.

The longer term trend remains overall positive and intact. So, even with this month’s meek employment data the possibility of the dreaded “R “(otherwise known as Recession) word is not a factor at the current time.

In fact, the unemployment rate hit a new low of 4.7%, as did the participation rate which is at 16 year lows.

If that seems confusing in terms of its implications, well it is. If you listen to the banter by “experts” on the mainstream news channels or some presidential hopefuls it’s either a long term indicator that our economy is in shambles or it’s just a normal function of demographics. Blame that on the consequences of retiring baby boomers and women from the workforce.

Some claim this month’s poor employment numbers are not that meaningful because of striking Verizon numbers. However, the rate hike that looked like a sure thing last week seems to off the table for June according to the treasury markets.

With interest rates near zero and inflation indicators heating up what’s a banker to do?

If you are prone to analyzing the data for yourself, ignoring the news channels to draw your own conclusions seems a bit tougher to do. One needs reliable and transparent data which seems almost impossible.

This week Bloomberg News, (using the courts to exercise the Freedom of information act) finally found out that for more than 40 years a secret deal existed between Saudi Arabia and the United States.  It required a massive cooking of the books to obscure just how much we are in debt to the Kingdom.

Every president since Nixon inherited this secret deal.  It may have impacted our National Security and forced decisions that we otherwise might not have made, especially regarding 9/11 and its aftermath.

The current situation is that we owe hundreds of billions to the Saudi’s but the exact amount is yet to be disclosed.

Getting back to the market action, the highlights this week were the resumption of the big trends already underway in commodities. It is being led by Silver, Gold, and Gold Miners (+11%). Agricultural commodities surged as well, led by sugar (CANE, SGG).Risk On indicators slipped a bit this week with market internal mixed bag.