For well over 600 DOW points, we’ve warned our readers of the series of warning signs, and change in overall market sentiment that favored continued selling pressure. This is not a consequence of short selling, or the Democrats favorite scapegoat: the big bad bankers.  No, this sell off is a consequence of overhyped anticipation of economic recovery, when there was in fact no solid footing.

The equity market has continued to march upwards, despite the troubling change in the definition of unemployment by President Obama.  Something akin to the emperor with no clothes, it turns out that we just have no jobs. Even more troubling is the discouraged portion of the “potential” workforce.  I highlight the term potential here, as these able bodied individuals are actually not accepted in the count for unemployment.  This of course should have been changed long ago.  Aside from the discouraged/lazy/victim story folks, there is also the Obama tweak to the overall jobs picture.

Obama decided to include in the jobs number, “jobs saved” as new jobs being created.  Unemployment seemed to be in check, or at the very least hold steady under the new job accounting methods (does this story ring a bell  yet?). However, there came the tipping point, when Obama ran out of his stimulus money, and couldn’t help pay your mortgage, or your car note, or your electric bill… sorry Patty the Moucher, but I have to show your clip, yet again:

Remember the stimulus? Where did it go? Not talking about TARP, just the stimulus Obama used to keep his unemployment numbers low. Seems like he was really living on a prayer with this one.

Sorry for the clips, just can’t help myself this evening.  In any event, Obama has effectively run out of capital to invest in his State sponsored distortion of the unemployment data. Looking at the weekly claims, PPI, CPI, ISM, and Philly  Fed data next week will be very revealing.  It’s been a couple of weeks, however where data points have just not moved in step with Obama’s rosey picture.  I guess there is a limit to how many metrics one can actually change.

Tomorrow, Uncle Ben Bernanke will speak to the recent unemployment report and the overall integrity of the economy.

Here is what I find fascinating today. Long term yields went up, and the short term 2-5 year yields went down.  Are we starting to enter a real flight to safety scenario again? Gold keeps edging closer to $1,550, with $1,600 just a couple of days away.

Are we in a scenario of a declining economy, and rising inflation? I guess that’s what uncontrolled printing of money will get you. How much printing has happened?  Well, since Obama took office, the total of all liquid currancy out there was $1,587 Billion’s of dollars (So add another 9 zero’s to that). We now stand at about $1,901 Billon’s of dollars.

Are my eye’s deceiving me? That’s a jump of 20%, what what sort of associated real economic growth, or output to show for it? We are entering an era of inflation whether we like it, or not! All of which, Obama induced, as a consequence of his lack of direction for the nation in it’s time of need.