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Don't Buy on the Non Farm Payroll Numbers

Looks like I am going to have to be the designated driver at this brewfest. The Friday nonfarm payroll showing losses of only 247,000 jobs, with upward revisions to May and June, is signaling to many that the bull market is back. We’re definitely getting worse at a slower rate. You might as well put a giant neon sign on your roof saying “party here tonight.” One can never underestimate the animal spirits here. I’m sure the newspapers are going to call the 0.1 % micro improvement in the unemployment rate to 9.4% as the beginning a major trend. But look at the chart below, which shows were aren’t close to a turnaround in the worst jobs turndown since the thirties. I don’t see any new consumers on this chart, and I was able to breeze through my favorite restaurant at lunch because it was still half empty. I think what is really happening here is that having priced in Armageddon in March, we are now pricing it back out. What’s an Armageddon worth? Some 3,000 Dow points, or 350 S&P 500 points, about where we are right now, sounds like the right price to me. Let me know when you’re ready to go home, and I’ll pile your inebriated carcasses back into the car. I’ll even take the breathalyzer test.