We got relatively good payroll numbers, 97k new jobs in February. The bullets are:

  • Uncle Sam came to rescue by hiring about 39k people. We are probably just sending those who we don’t need to Iraq. Like Britain was sending criminals to Australia
  • 62k job lost in construction. This is just the beginning. I suppose some of them are already packing for Iraq and more to come
  • Manufacturing lost 14k. Toyota is just better
  • Unemployment fell back to 4.5%

Ok, so unemployment fell back to 4.5%. Good or bad? The futures show that probability of the rate cut anytime soon fell dramatically just few seconds after job report.

The mental Cramer on CNBC is jumping in front of the camera calling for the rate cut by May. And then the stocks will go up, up up – the sky is the limit.

We have a strange situation here. Sure the rate cuts are impossible when unemployment is 4.5%. The dollar will just collapse if Uncle Ben just hints that the rate cuts are possible before unemployment gets to 5%. Unlike Cramer, Ben is no idiot.

But at the same time we have all signs of consumer credit crunch:

  • December, January and February retail sales – all disappoint. People just don’t spend so much. Why’s that?
  • New Century and 33 other mortgage lenders went out of business. People just found that paying for the mortgage is just not a sound financial decision anymore. Even if they have money. Especially if they don’t. If you stop paying for mortgage and taxes you will have 6 month of free housing. Too good to ignore
  • There is absolutely no Spring rebound in home sales, as Goldilocks expected. We are still in early stage of the housing slump. 3-4 more years to come before it bottoms out

So we would like to have rate cuts, but we won’t get them. Cramer can shove them up his ass