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We laid out all the reasons why we felt that we could be facing our first 10% drop in over 3 years. That was a Sunday edition and sure enough by the end of that week the pullback had began and we did indeed get our first major shakeout. The DOW dropped over 1,000 points. We got our 10% drop on the S&P. Now the fact that we didn’t put out the exact shorts you should have bought to capitalize on it, doesn’t mean that the letter didn’t have actionable information in it. We showed you all exactly why you could expect a major drop.
On Friday we got the non farm payroll report, and boy…if the powers that be ever wanted to paint something to look perfect, this was their Rembrandt moment. Not only did the headline number beat the estimates of a gain of 235K by coming in at 257K; they went back and did some of the most aggressive “revisions” to prior reports that I’ve ever seen.
Let me paint the picture for you. According to our Government bean counters the last few reports have shown the most job gains in 17 years. They say that wage growth was the best since 2008, as they told us wages grew by 0.5%. The BLS did revisions to the entire year of 2014, and remember the “polar vortex” last January? They said at the time we only got 144K jobs. Now they say that looking back, it was really 247K. But that was nothing compared to what they did to November. Now they say November posted a gain of 465K jobs. That’s the most monthly gains since the tech bubble boom of the late 90’s. A time when there really were jobs galore.