During market bubbles a lot of details get overlooked. With the Dow hitting a new high of 15,000, we have to ask ourselves what are we missing? How long can this last?
Its hard to miss the ugly job numbers and weak earnings weve seen come out the past few weeks. But for those not paying attention, we seem to be witnessing what some are calling the Obamacare jobs market. The U3 unemployment number (calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force) said we are getting better because the rate went from 7.57% in April to 7.51% in May. However, the broader U6 unemployment rate (adds on those workers who are part-time purely for economic reasons) was 13.9%, higher than the 13.8% reported in March. One has to ask how can the Dow run up to 15,000 while we are still facing such a huge under employment problem? These types of numbers are becoming common and yet the U.S. stock market continues to push higher and defy gravity. Isnt that a telltale sign of a bubble? There is a disconnect between whats happening on Main Street and Wall Street and usually its main street that suffers when this disconnect resolves itself.
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