2/11/2015 – A mixed day with the Dow Jones down 7 points (-0.04%) and the Nasdaq up 13 points (+0.28%).
Most mainstream economists are extremely exited. According to them the US Economy is booming, the unemployment rate is scraping the bottom, job openings are surging and salaries are about to skyrocket. That in turn will propel the economy forward and today’s “secular bull market” will run for at least another 10 years. A view that can be found here: Americans Are About to Get a Nice Fat Pay Raise
They have got it all wrong. Here is why……..
- The true unemployment/underemployment rate is at least double the official number of 5.7%. Is the Unemployment Rate of 5.7 Percent Just a ‘Big Lie’? That is to say, there is no real pressure for companies to increase wages.
- We are at the tail end of this FED and liquidity driven economic recovery cycle. Meaning, the next bear market and recession are just around the corner. Most corporations understand that we are rolling over and won’t hire into a recession.
- Most economists have been perplexed as to why CAPEX remained flat over the last few years. Even though the economy surged higher and interest rates remained low. It is because most companies have already optimized their balance sheets and there isn’t that much new to invest in. It’s the same reason very few companies will expand their labor force. There is no need.
- Productivity and new technologies. It is a lot cheaper to buy a $40,000 robot that will last for my 5 years than to hire a $40,000 a year complaining and lunch taking human being. We are getting there fast as technology and artificial intelligence improves.
In other words, don’t expect salaries to surge anytime soon. Certainly don’t demand higher pay or quit your job before you have another one lined up.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014/15-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014/15-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. February 11th, 2015 InvestWithAlex.com
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