Good morning on this fine Monday in New York City.

You know what? I’m not at all cranky today.

In many ways, Baltimore is cleaner and more crime-free than the Big Apple.

I know, that’s not what you heard on the news.

But good friend and Rude publisher Chris Carroll set me up at the Sagamore Pendry Hotel in Fell’s Point.

So, we just hung around one of the greatest harbor set-ups on Gaia’s Green Earth.

Seriously… we ate, drank, were merry long into the night… and not a rat in sight!

I was shocked as stories of Baltimore’s legendary crime seeped even to my side of the Atlantic.

But a safe, good time was had by all. And I was gutted to leave.

In this Rude, I’ll write about my trip and how talking to the Sherlock of the Supply Chain both corroborated and enhanced my view of Friday’s Non-Farm Payrolls number.

Who? What? Why?

Though I’ve written the Rude for over a year now, I’ve never met either Chris or Matt in the flesh.

So, when I told them I’d be in the States this summer, they asked if I’d be up for a meeting.

Of course, I was up for it!

And I hadn’t been in Baltimore since the late 90s when my college roommates and I went partying in Fell’s Point.

So here are the first couple of reasons I’m over the moon.

First, traveling on Amtrak’s Northern Regional train was a pleasure. Sure, I was in Business Class, but the trip was smooth and fast.

On the way back, I was on the Acela, which was even faster!

Since I live in Europe, I travel by train often. Amtrak didn’t disappoint.

Next, Baltimore was an absolute pleasure. Yes, its crime rate is insane, and much must be improved.

But Fell’s Point and the Inner Harbor are gems. The bars are fun, and the food is out of this world.

However, the best part was the conversation.

Palling Around with the Paisano

I knew Mark Rossano and I would get on famously.

At a hulking 6-foot-1, Mark has an easy smile and a big grip.

After devouring a lovely lunch with everyone, Mark, Chris, and I retired to our hotel’s ornate bar.

Inevitably, the conversation turned to the markets.

After the initial cackle about Friday’s non-farm payroll number, Mark looked at me and said, “You know, that number is fake.”

I said, “Fake? How so?”

Then Mark proceeded to explain.

But before I get to that, let me tell you my first reaction to the number on Friday morning.

Up 528,000 is a big number. It allows Biden to claim his programs have led to a complete recovery of jobs since the corona crackdown of 2020.

Credit: Bureau of Labor Statistics

If we didn’t live in Clown World, I’d expect the market to rally.

Except it didn’t.

It was flat as a pancake.

Friday’s close:

Credit: Stockcharts.com

This made sense to me because the market is thinking, “Damn. Now the employment numbers are so good, the Fed can raise rates again.”

So, on a “great” economic number the market doesn’t move.

Jay Powell and Co. will raise another 75 bps in September.

And that’s quite bearish if you ask me.

The market seems to have agreed.

But its train of thought may have been different.

Enter: Mark Rossano.

NFP? It’s a Fake Number!

Before I begin, please remove any tinfoil hats from the premises.

Mark was careful when he said the number was “fake.”

It wasn’t “fake,” as in “manipulated.”  It was “fake,” as in “seasonally messed up.”

Mark explained that no one pays attention to the July NFP number because it’s summer, and you get a lot of bloating from hiring teachers.

And he also pointed out two other important facts:

1. 303,000 were part-time jobs.

2. The labor force participation rate is still a derisory 62.1%.

That’s a lot of part-time jobs.

Regarding the participation rate, Zero Hedge had this to say:

The participation rate declined again from 62.2% to 62.1%, as the number of people in the job market — either working or looking for work — declined again last month. What the Fed really wants is to see people flocking back in, driving up the unemployment rate and easing pressure on wages. Instead what we are seeing is people leaving the job market and employers fighting to grab those that remain, luring them with higher wages.

So, Biden gets two things out of this.

The first is he can claim he put many Americans back into jobs:

Twitter: @POTUS

The second is that he can hide behind Jay Powell, who’s been given the green light to raise rates again 75 bps.

That’ll eventually start squeezing the inflation out of the system.

But only if he contracts the money supply simultaneously.

Just having Mark add color to the conversation was immensely worthwhile.

That I got a masterclass from him in how to interpret NFP numbers is something that’ll stay with me for a long time.

Wrap Up

All isn’t what it seems on the government front.

But then again, it never is.

Biden can simultaneously say, “There’s no recession and let’s raise rates.”

That’s not particularly bullish, in my estimation, and leads me to declare this recent up move in the stock market a sucker’s rally.

My SPX call for 3,213 remains.

With that said, I loved every second of my time in Baltimore.

I must thank Chris and Matt for organizing and supporting the trip.

Also, a special thanks to Frank Devechio and Mark Rosanno.

It was a lovely couple of days!