Today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 5 incredible charts illustrating covering everything from gold to the “surprise index.” Eric Pomboy, who is founder of Meridian Macro Research, and whose sister Stephanie Pomboy appears in Barrons, also provided tremendous commentary to go along with the 5 stunning charts, as well as what all of this means going forward.
By Eric Pomboy Meridian Macro Research
July 10 (King World News) – Gold & Silver Charts Of The Day
“The COT data for week ending 7/2 show a 35% reduction in Net Commercial Position to ‐22,776 contracts … the least Net Short reading since Jan 8, 2002 when gold was $279/oz. With a Net Long reading not far off, a significant upside reversal for gold is clearly in the works.
Regarding Friday’s Payroll Report, things are not as rosy as the headline data suggest. First, 195k jobs added sounds like a solid number … but it’s only 79k jobs above the (6mo. average) of Population Growth. Second, if you look at the gap between U6 and U3 number of unemployed (chart below), the monthly change was a staggering +786k persons … the largest monthly jump since December 2008 (+800k), thus the rise in U6 rate from 13.8% to 14.3%.
Third (next chart), the number of full‐time employed dropped by ‐240k, bringing full‐time employed as % of Total Labor Force to 74.4% … still in historically low territory and indicative of a very uneven labor force (full/part time) composition. In the last 3.5 years, 5.43 million full‐time jobs have been created. In order to reach a more ‘ideal’ 79‐80% over the next 4 years (factoring‐in population growth), we’d have to create about 12 million full‐time jobs, or 250k jobs per month … which seems highly improbable. Considering full‐ time jobs dropped ‐240k and part‐time jobs jumped +360k for June, we’re clearly moving in the wrong direction.
Also, the total of Non‐Full Time employed is at a fresh historic high as of the June data…up +400k to over 28 million people. The takeaway from these numbers is: we could get to 6.5% (or even 5.5% or lower) headline U3 unemployment rate in the next few years, yet based almost entirely on part‐time job creation. None of this is good news, as quality of jobs is clearly more important than quantity….