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October 02, 2014

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OUR FRIENDS? Who are our friends and who are not? Jim Cramer believes the Saudi's perhaps independent of OPEC are trying to deter the US oil independence by opening the pipes to flow out endless amounts of cheap oil driving the price below $90 a barrel. Is he right? Cheap oil is the opposite of the historic objectives of OPEC and it is likely that Iran and others are not happy. They do not sit on the world's largest oil field. The Saudi's, if Jim is right are likely, counting on higher production costs of US oil-- compared to their easy to get at oil--to deter the fast development by investors of US oil technology and alternative energy systems that compete with high cost oil. Or are the Monarch's just pumping more oil to offset declining revenues and develop more customers with sanctions hitting Russia? Or are they funding the fight against ISIS? Friend or competitor? Stay tuned.

UNEMPLOYMENT RATE: Remember how the unemployment rate plummeted before the last Presidential election? It prompted many to claim it was being rigged by the administration. Today final reading of the unemployment rate before the midterm elections once again is suspicious. It follows a horrible 140,000 now revised to 180,000 jobs added in August. It comes in at 284,000 which will not be revised until after the elections. It follows an earlier nongovernment payroll report this week of 204,000. The new jobs include 12,000 government hires (hmmm?)and a New England labor union that returned to work adding 25,000 jobs. It included more reductions in the participation of those looking for work. And, it included a continuing drop in wages. Most of the jobs added were in the service sector as manufacturing still struggles to grow. In actuality the jobs growth has now declined for nearly 6 months. It was not all weather: Let's take the last two months unrevised numbers 140,000 and 284,000 and we get 212,000 average very close to the published (nonpolitical) 204,000. During the past 6 months our search firm has seen a decline in both interviews and hires so I think you can give so credence to this as a political number.

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