via GIPHY

Yes, it’s all quite maddening for many rational investors as bad news morphs to become great news.

Yet this has been going on for nearly 7 years as bulls don’t care about anything beyond keeping interest rates at zero for as long as possible.

Thursday we noted Goldman Sachs had indicated a rally would need two things; first, better earnings than expected but second, more stock buybacks. The latter is what matters for bulls since buybacks financed by cheap credit (ZIRP) are the fuel that persuades corporate chieftains to do it. Earnings look much better on fewer shares. Sure, they don’t reinvest in the company’s long term growth by doing this, but shareholders benefit in the short-term. Further, corporate insiders have lucrative stock options to enrich them. This goes directly to the “income inequality” refrain we hear so much about.

Friday the Employment Report laid an egg. Only 142K new jobs created vs 203K expected, and prior amazingly declined from 173K to only 136K. (Most new jobs were waiters, bartenders and part timers.) The joke’s that the unemployment rate only 5.1%. All those not working for whatever reason aren’t counted anymore.

The Fed chimed in lamely to assert there are many who just don’t want to work. Why would that be? Maybe it’s easier to coast along enjoying other government benefits. To complete the bad news were Factory Orders which also sucked and blowed, down -1.7% vs prior 0.02%. So much for that “solid” economic growth, Janet.

With the early bad news, stocks dropped sharply but the bad news bulls quickly jumped in for the “stick save” believing the previous 7 years of permanent “dip buying” was still intact. The Dow, for example, rose 200 points off the intraday low of more than 200 point early drop.

Emerging Markets also rallied on the belief no interest rate increases are in the offing, as did Europe and other overseas markets. It also shouldn’t surprise that long-term bond prices also rose as yields fell.