Oh Stewardess, I Speak Jive

The jobs report is coming. Almost nobody will look at the actual number. What matters is whether financial media and Fed officials collectively decide it's good news or bad news. That interpretation will determine what the Fed does next. And what the Fed does determines whether markets can continue their five-year run or begin to crack. The entire system has become dependent on narrative construction rather than economic reality.

• The jobs number itself is meaningless. Whether it misses or beats by a few thousand doesn't matter economically. What determines market movement is the story journalists, economists, and Fed officials construct around that number.

• That story is arbitrary and mutable. A miss can be called positive if blamed on bad weather. A beat can be reframed as negative. The same data point can support competing narratives depending on who's telling it.

• The real battle is over what the Fed does next. Markets are addicted to central bank liquidity. If the narrative says the economy is weakening, pressure will mount on the Fed to keep the money flowing. If it says growth is solid, the Fed's taper plan continues.

• Both outcomes create problems. If the Fed keeps tightening despite pressure, leveraged investors face a liquidity squeeze and emerging markets face chaos. If the Fed reverses course because of market pressure, it signals that policy is permanently hostage to asset prices.

• The system has lost its anchor to reality. Five years of central bank intervention have created an expectation that any economic weakness triggers stimulus. The mechanism that was supposed to be emergency policy has become permanent life support.