Economic Whiplash

Do you feel as if you are suffering from some sort of economic whiplash? Between focusing on the European crisis (and it is a crisis), then looking at softening data in the US and political turmoil in Japan, not to mention the Middle East, you can be forgiven for feeling like someone just slammed into the back of your “economic recovery car.” This week we look at today’s US employment numbers, then at a troubling slowing of economic velocity, precisely at a time when it should be rising, and then consider a powerhouse, must-be-read-twice commentary from Martin Wolf on the European situation. Then I will weigh in with some of my own thoughts. Counterintuitively, the holders of certain European debt are being put at further risk by the bailout. (This letter may be a little shorter and take more work than others –which some of you think will improve it – as I am suffering from Caesar’s Revenge here in Tuscany, although I am getting better!)

As you know, I am a firm believer that the state of the global economy is such that we as investors have to be especially agile and focused today. Consequently I spend a great deal of time and effort looking into alternative investment strategies and managers. I'm very pleased to announce that I am relaunching my special newsletter for accredited investors, to share the latest opportunities and pitfalls in alternative assets.

The good news is that this Accredited Investor Letter is completely free. The only restriction is that, because of securities regulations, you have to register and be vetted by one of my trusted partners before you can be added to the subscriber roster. They include Altegris Investments in the US, Absolute Return Partners in Europe, Nicola Wealth Management in Canada, and Fynn Capital in Latin America. This is a painless process (I promise!), and just to sweeten the pot, after you register my partner will provide you access to the video of Gary Shilling's speech from my Strategic Investor Conference in La Jolla. I don't need to remind you how insightful Gary is, but if you've never seen him speak, let me just tell you that he's absolutely compelling.

[[Click here now to register]] and you'll be part of the summer relaunch of my letter exclusively for accredited investors. In the meantime, enjoy Gary's video presentation and benefit from his intelligence as you plot your investment course. Over time, we will make all the conference videos available to the subscribers of the free Accredited Investor E-letter. Those who attended the conference, or have spoken with an Altegris professional, already have access to all the speeches and panels.

I do not like limiting the letter to accredited investors, but those are the rules under which I work. This is not of my choosing, and I have worked in front of and behind the scenes to try to change what I think is a very unfair rule. (See important risk disclosures below. In this regard, I am president and a registered representative of Millennium Wave Securities, LLC, member FINRA.) And now to the letter.

Non-Farm Payrolls Even Worse than the Headline

Today’s employment number of 54,000 was the weakest since September 2010. And when you look at the underlying figures, it was pretty bleak all over. Beyond the rise in jobs, the number of people unemployed rose by 167,000. The number of folks out of work 27 weeks or more increased by 361,000 m/m.

And then there was the birth/death model. May always has a large number…