As a species, we seem hellbent on rushing headlong to our own demise, returning to a more basic condition.
Technology. That is a two-edged sword. We have advanced so far in sciences, yet the uses to which we put it shows that we have not advanced much as humans. Instead of letting it enhance us, we use it to dull ourselves.
Consumerism, entertainment, social media … where our attention goes and how we spend our money tells us what is important to the great unwashed. Actions speak louder than words, but only to those with ears to hear.
Escape. We seek escape. From lives that follow a well-trodden path by those before us and around us. We imitate and comply with the unwritten codes of our social construct. Do we ever look up and question why we do what we do? Do we ask if we could shape our lives differently?
For me, I wonder how and why others can’t see what is obvious in relation to the economy and markets. Instead, they would rather be entertained by the noise-makers (listening to whoever everyone else listens to, presuming that everyone else must know that the noise-maker knows what they’re talking about rather than just being a distraction), or want to be told of a trade that can be taken today to make a few short-term dollars.
We want driverless cars, so we can switch off our minds just as motorized travel has switched off our bodies. We want A.I. to think for us irrespective of whether its output is factual. In short, we want to regress. We want the Matrix.
Well, that came out of nowhere.
Focus
I’ve been hitting the unemployment theme lately and will do so again this time, too. That’s because it’s the last shoe to drop and it’s getting late.
I’ve dropped some charts recently showing the initial turn up from the bottom in the unemployment rate. For a long time I’ve liked the correlation between the University of Michigan Consumer Sentiment data and the unemployment rate. However, Covid-19 and the Fed’s “transitory” inflation response has thrown the correlation out of alignment, but it’s still suggestive of overall direction.
Mikael Sarwe of Nordea produced the following chart, which has a tighter correlation.
I came across the following chart courtesy of Francois Trahan, which I’ve reproduced. Like my University of Michigan chart above, it has a longer lead time and suggests much more upside in the unemployment rate than most suspect, including the Fed who are the architects of rising unemployment in their attempt to kill off excess inflation.