Dear John: A recent employment report came in way off base after Goldman Sachs and others raised their estimates the night before.
Prior to the actual report, I sent the following note to one of the brokers I deal with for one of my accounts: “It is my opinion that Goldman is manipulating the market. While most of those in the market are calling for a job increase tomorrow of about 80,000, Goldman has raised its estimate to 125,000, though of course it would be very hard to reach that number.
“Then the market goes down, and Goldman does what they always do: put their customers back into the market with cash that was held on the side. And they make millions.”
Am I missing something in my observation?
Needless to say, my broker avoided answering my question. J.B.
Dear J.B. Goldman is notorious for playing tricks with the markets, especially commodities. But I don’t think it happened with the June employment report you’re referring to.
I think Goldman has just been wrong ever since the firm lost its cozy relationship with the Treasury — thanks to people like me looking into it.
Goldman was very good at making its predictions until it lost that inside information. They are human now and have to guess like everyone else.
Besides, the government’s monthly employment report is known to nobody outside the Labor Department until after the stock market closes the Thursday before its Friday morning release. And then only the president and his inner circle get the news.
And while nothing is impossible, I don’t think the report leaks early.
Dear John: Duh, Bush’s term started it! Only idiots are ignorant of that, and hey, don’t all the idiots vote Democratic? D.J.
Dear D.J. Even though this is a rudely short and condescending note from you, I’m going to give you the truthful and long answer about what started our economic problems.
First off, this whole thing began because Americans lost track of the old adage, “If you can’t afford it, don’t buy it.”
We forgot that keeping up with the Joneses meant getting a job and earning a salary commensurate with the Joneses’.
When this did happen? Probably more than a generation or two, when credit and credit cards became too available.
The Democrats helped people forget that adage during the Clinton administration, when the White House came up with the brilliant idea that it would be nice if everyone owned a house. Go back and look it up. Widespread home ownership was the goal.
Alan Greenspan, who as head of the Federal Reserve was busy making politicians happy, keeping interest rates low and the stock market high (even as he warned of “irrational exuberance”). So people bought houses and other things they couldn’t afford.
Then the World Trade Center fell, and it was the Bush administration’s time to make foolish mistakes. Not only did it spend excessive amounts of tax revenue fighting wars that may or may not have been necessary, but it also urged Greenspan — an economic criminal in my book — to keep interest rates excessively low.
The result: more homebuying by people who shouldn’t have been. More speculation in the financial markets. And blooey, the whole thing came tumbling down.
So before you go assigning blame for our current mess, realize that the list of those responsible is much longer than — duh — you’d think.
Send your questions to Dear John, The NY Post, 1211 Ave. of the Americas, NY, NY 10036, or john.crudele@nypost.com