Rabu, 31 Agustus 2011

Morning Update/ Market Thread 8/31 - Clear the Debt or Wallow Edition…

Good Morning,



End of month dreams and QE fantasy are my versions of what is responsible for the hyper-manic-inflate-at-any-cost moronic mentality, which of course, has led to a fluffy higher feel not-so-good queasy kind of “market.” Along with the queasy fantasy of higher stocks (for the time being), the dollar is lower, bonds are higher (watch out), oil is slightly lower, gold slightly lower, silver is higher, and food commodities are flat this morning but still high enough to make one choke.



Oh sure, the media says the data is great! That’s why the stock market ramped all night long and into the morning, yeah, that’s the ticket… it was the ADP report, yeah… no, wait, it was the rumor of another bailout, yeah, that’s the ticket…



Hello, “Consumer” Confidence crashed yesterday, as in cratered for the month of August. It plunged from the last already depression era read of 55.9 (1985 = 100 on this scale), all the way down to only 44.5. For those who do math, that’s a 20% one month plunge to depths reserved for times of great fear and anxiety – a dim outlook of the future is definitely there. And guess what? Retail Sales follow Consumer Confidence fairly closely. Not that I believe the Retail Sales Index, but I do believe they track one another, and so take a look at this chart showing the two together. Look closely, and you’ll see that when consumer confidence falls, so too do sales:







Don't panic, but August is a cliff month, and as more economic reports come out for that month, I think the picture is going to be pretty ugly, even with trumped up data.







It was reported this morning that Canada’s Q2 GDP turned negative for the first time in two years, also not a good sign for the trend.



The completely hypocritical and morally reprehensible Mortgage Banker’s Association reported that Purchase Applications supposedly rose by .9% in the prior week, but that Refinancing Activity fell by a whopping 12.2 crazy % in just one week. Whatever, these guys are clowns, their reports belong in the trash, and you will almost always be better off by doing the exact opposite of what they suggest. Here’s Econocomplicit:

Highlights

Rates are coming down but points paid are going up which the Mortgage Bankers Association says is pulling down volume of refinancing applications which fell 12.2 percent in the August 26 week. A plus is that the purchase index ended three weeks of heavy decline though with only a mild 0.9 percent gain. Rates are near 10-month lows, at 4.32 percent for 30-year lows for a seven basis point decline in the week. Points for 30-year loans increased to 1.30 from 0.88 (including origination fee) for 80 percent loan-to-value ratio loans.


Turning to Employment, the first report out for August is the Challenger Job-Cut Report which actually showed improvement, falling from 66,414 to 51,114. This report has not, however, correlated well with the actual Employment Report which comes out Friday, but it’s still used to set expectations for the clown brigade:

Highlights

In what may be good news for Friday's employment report, layoff announcements slowed in August to 51,114 from July's 66,414. These data are not seasonally adjusted which clouds month-to-month assessments which are especially sensitive to seasonal change. But a look at year-on-year rates of change shows a slower rate of deterioration this month, to 47% against August 2010's level of 34,768 from 59% against July 2010's 41,676.



The report makes special note that announcements of government layoffs, centered in the military, are the heaviest of any sector this month. Challenger, Gray & Christmas, an outplacement firm that compiles the report, warns that federal layoffs, tied to the need to lower the deficit, are likely to remain heavy this year and through the next several years.


The semi-worthless ADP Report also is used to set expectations, and they are saying that Nonfarm Payrolls fell from 114,000 in July to 91,000 in August, of course July was revised down, and this report was way off the mark last month. I’m not 100% sure, but I suspect this report is a part of the manipulate the markets, profit from HFT swings, rob ordinary people blind, scheme that the Wall Street boys run on the public. I don’t trust this data, and I don’t trust them – hence I say I would rather give my money to a known convicted felon than these guys, at least with the felon the pretense is gone:

Highlights

ADP is calling for a 91,000 rise in private payrolls for August, down from a revised total of 109,000 in July. Expectations for Friday's non-farm payroll headline are plus 67,000 which would be lower than July's 117,000. Markets are showing no significant initial reaction to today's report.


Whatever.



Chicago PMI and Factory Orders are set to come out just after the open.



Macroeconomic Debt Saturation is the diagnosis. The cause of the disease is giving private individuals the power to produce money from nothing, then allowing them to corrupt all systems with it.



The cure is certainly not more “stimulus,” nor is it more “quantitative easing” which the private crooks at Goldman and JPMorgan are calling for. No, the cure is to remove the debt saturated condition and if you don’t want it to return, then you must also remove the crooks. Japan did not learn that lesson, and there they sit, wallowing in an economic and nuclear wasteland. Wallowing in their own waste, literally.



Wallowing in our own waste is the good/optimistic version of what’s in our future if we fail to clean out the debt along with the roots of the problem.



Until we put the clowns to bed, put on your nuclear rose colored glasses and get real, because it’s easy come for the fluff, and soon it’ll be easy fluff go.









Selasa, 30 Agustus 2011

Morning Update/ Market Thread 8/30 - Roller Coaster, Hope You’re Enjoying the Ride Edition…

Good Morning,



Equity futures are rolling lower this morning with both the dollar and bonds rising to erase yesterday’s moves. Oil is lower, gold is on the up ramp as is silver, while food commodities are free falling into the gap up that was created yesterday! Wee, isn’t this fun?







Yeah, if you’re 8 years old it’s real exciting and you want to experience those emotional highs and lows again – what fun! But to call these “markets,” or to claim that feeding your money into them is “investing” is a long, long stretch from my point of view. We are so far away from the concept of investing that it’s hardly recognizable.



When one invests, for real, they are providing capital for someone else to use in a productive manner. You know, old fashioned things likes real goods and services that create real jobs. Not today. Today “investing” goes like that roller coaster ride for most Americans, but not if you’re Warren Buffett. No, no… Warren does something entirely different – he uses his money to buy his way into face time with the President where he suggests that he’d be happy to provide a few billion to help shore up an insolvent and worthless bank if only the good people will guarantee his “investment” and provide a guaranteed return of hundreds of millions.



Quite the contrast, no? And it’s certainly not the first time that he’s used the taxpayer to his benefit. That type of inequity is a marker – it signifies that “other events” are going to be fueled and that major league change is enroute.



Consumer Confidence is released at 10:00 Eastern, we’ll report that depression era read inside of today’s Daily Thread.



This morning the Case-Shiller quarter 2 report for the month of June came out. This report is somewhat better than May’s, especially in the 10 city figures, but if you take the time to read the report you’ll find that the National Index year over year number is still negative by a whopping 5.9%! That’s a ton of price movement in the downward direction, don’t let the happy talk fool you. Here’s Econofool:

Highlights

Home prices were trending flat in June with Case-Shiller's adjusted composite 10 index, which is a three-month average, holding unchanged for a second straight month (prior month revised from plus 0.1 percent). The composite 20 index edged 0.1 percent lower for a second straight month with 11 of the 20 cities showing declines in June. Seasonality is at play during spring and summer which is a strong time for home sales and, in what is a mild positive, seasonality is also at play this year as well. Unadjusted data show 1.1 percent gains for both the composite 10 and composite 20 indexes during June following 1.0 percent gains for both in May.



In contrast to month-to-month comparisons, year-on-year comparisons are less affected by seasonality with the adjusted composite 10 down 3.9 percent vs minus 3.8 percent for the unadjusted composite 10. The composite 20 shows deeper contraction at an adjusted minus 4.6 percent and an unadjusted minus 4.5. The trends for the report's year-on-year rates have been flat to slightly negative.



Weak home prices remain yet another negative for the American consumer whose foremost battle however is with the soft jobs market. Watch for comments on housing in today's FOMC minutes followed by construction spending data on Thursday.


Now, do yourself a favor and compare that mild assessment with what you read on pages 1 & 2 of the actual report… That’s where you’ll read about the National Index and places line Minneapolis and Portland that are down 10%+ in the past year alone:



Case-Shiller June 2011



WEE! Nice roller coaster on that chart! Must be another great “investment.” Oh yeah, we’ve all seen the real estate price roller coaster by now, so I won’t show it again – I think that young boy’s reaction on the down stroke says it all.



But remember, I think a very large anchor is about to be removed from the housing market, that is the Option-ARM resets are at peak right now and from this point forward their drag on the market will lessen rapidly:











Just remember, do not get up until the roller coaster has come to a complete stop!



In all seriousness, this probably will not mark the bottom of the market as the market has tended to lag about 6 to 9 months behind both the Subprime and Option-ARM waves, so be careful in making assumptions.



Hope you’re enjoying the ride!







Senin, 29 Agustus 2011

Morning Update/ Market Thread 8/29 - Alien Wars. Private Banker vs. Politician Edition…

Good Morning,



Equity futures have been fluffed all weekend long on the back of a dollar that is threatening to break down out of its range, bonds are significantly lower, oil – of course – is therefore higher, gold and silver are back slightly, and food commodities are skyrocketing with nearly every one breaking higher out of its range, many are close to new highs (very dry gulp).



Obviously what’s happening is not sustainable. Every time equities try to mount a comeback it’s on the back of our money. You can see energy, precious metals, and food ratchet higher every time. On pullbacks they just sit and wait for the next wave higher. That’s the end game, if you run that trend out over time… its game over. The game being that private bankers are profiting from, and controlling the production of, your money.



One need only watch the news to see the pressure of the impossible math laying the foundation for those many “other events.” Those events are going to continue to gather pace as the pressures on the population mount.



The economic data continues to diverge further from reality, the most distortive being the way that our inflation figures have been manipulated. That affects almost all the other calculations. This morning it’s Personal Income and Outlays which understate the amount of inflation and tend to overstate the rate of income growth. Even with these miscalculations and divergence from reality, it is still obvious that incomes are failing to keep pace with the inflation:

Highlights

In July, the consumer made a nice comeback in terms of income growth and spending. PCE inflation, however, was on the warm side. Personal income in July rose a moderately healthy 0.3 percent after rising 0.2 percent in June. The July advance matched the consensus for a 0.3 percent increase. Wages & salaries grew a little more robust 0.4 percent, following a bump up of 0.1 percent the month before.



Consumer spending rebounded a sharp 0.8 percent after slipping 0.1 percent in June. The latest number came in significantly higher than expectations for a 0.4 percent boost. By components, durables jumped 1.9 percent after declining 1.1 percent in June. Clearly, motor vehicle sales are up as the supply constraint related parts shortages from Japan is easing. Nondurables increased 0.7 percent, following a 0.5 percent decrease in June. Services rose 0.7 percent after nudging up 0.1 percent in June.



On the inflation front, the headline PCE price index jumped 0.4 percent, following a 0.1 percent decrease in June. The primary reason was energy costs with food also contributing. The core rate posted a 0.2 percent gain, matching the June pace and equaling expectations.



Year-on-year, headline prices are up 2.8 percent, compared to 2.6 percent in June. The core is up 1.6 percent on a year-ago basis, firming from the 1.4 percent pace in June.



Inflation and taxes did outpace income with real disposable income edging down 0.1 percent after a 0.3 percent boost in June. However, spending clearly beat inflation as real PCEs advance a sharp 0.5 percent in July, following no change the prior month.



On the news, equity futures rose, focusing on healthy spending. The bottom line is that the consumer sector is not down and out but actually adding to economic growth. Of course, the strength is coming from those with jobs and job growth would add to momentum.


Again, the data is disconnected from reality, but the Econoday commentary is even more so.



Pending Home Sales are released at 10:00 Eastern. It’s a pretty busy week for economic data that culminates in the August Employment Report this Friday.



Notice how Bernanke is laying the blame of the problem on the politicians? Friday he basically threw up his hands and said it’s up to them to straighten out the mess, of course implying that they’re the problem. And they are, primarily in the fact that they failed when they turned over their money powers to a few individuals. This was the ultimate corruption, that one corrupt act changed everything on the planet. And modern politicians who fail to correct it are equally complicit. So in that regard I agree, but I see them as special interests in crime together, both are culpable, but nothing will change until the power to create money is returned to its rightful owners, the people.



“Other events,” therefore, will continue to run. Between now and the coming climax, you will continue to be distracted and spun. Playing the blame game is just one way that they will both attempt to manipulate your thinking and emotions. But in the battle between these two alien forces, it is the politicians who can win at any point they find the will. It’s up to the other events to force them to find that will.



Bad things can happen when special interests are allowed to take control with no checks or balances in place. Producing money from nothing is the ultimate corruptor because that money can be used to buy away those checks and balances. That’s what happened with our money, and that’s why we have macroeconomic debt saturation, i.e. impossible math.



Some of the energy companies have become so influential that they, too, have permeated the regulatory agencies and warped rules so far in their favor that they have pushed the limits of physical reality. Our own NRC is an agency that has completely lost touch with reality – that is clearly seen in the way they are ignoring and twisting the reality that is Fukushima, and in the way they are failing to take any meaningful action here in the United States. Clearly it is run by “champions” of the nuclear industry, they are focused solely on the growth of the industry, and that focus is at the exclusion of safety. Here’s Arnie Gunderson simply telling the painful reality of the spent fuel pool condition, which the NRC claims are in great shape:



Newly Released TEPCO Data Proves Fairewinds Assertions of Significant Fuel Pool Failures at Fukushima Daiichi





Jumat, 26 Agustus 2011

Morning Update/ Market Thread 8/26 - Slip Sliding Edition…

Good Morning,



Equity futures are slip sliding this morning, not receiving any help from a downwardly revised Q2 GDP. The dollar is lower, bonds are higher, oil is lower, gold is higher, silver is losing a tad of shine, and food commodities are just a little more palatable.



Second Quarter GDP was revised downward from 1.3% to 1.0%, below the consensus of the economic guessers, aka. “clowns.” Here’s Econocircus calling the action in the ring:

Highlights

The economy got a downgrade for the second quarter but it was in line with expectations. The Commerce Department's second estimate for second quarter GDP growth was nudged down to a modest gain of 1.0 percent annualized, compared to the initial estimate of 1.3 percent and to first quarter growth of 0.4 percent. Analysts had projected a revision to 1.1 percent annualized.



Final sales of domestic product were revised to an annualized 1.2 percent from the initial estimate of 1.1 percent. Final sales to domestic purchasers were revised up to 1.1 percent from the original estimate of 0.5 percent annualized.



Economy-wide inflation was revised up marginally to 2.4 percent annualized, compared to the original estimate of 2.3 percent and the first quarter rise of 2.5 percent. The consensus forecast was for 2.3 percent.



While GDP growth was revised down, the more important measure of momentum---final sales-were revised up slightly. But today's numbers do not say much for the current status of the economy. Equity futures were little changed on the news as traders await Fed Chairman Bernanke's speech at Jackson Hole at 10:00 a.m. ET.


Hmmm… a miss is suddenly "in line," and it's amazing how all of the sudden final sales became more important than total GDP or inflation. Here’s a hint – that’s because total sales are not REAL. Inflation is vastly under reported and thus GDP and sales are both over reported. Again, the disconnect between reality and economic reports is a big part of losing confidence.



Nowhere is the disconnect greater than in the reporting of Corporate Profits. Year over year figures have been huge, but I’ve contended all along that they are FALSE. The vast majority of corporate profits come from the energy companies and the banks. With money printing out of control, rising energy prices create apparent energy company profits, but the truth is those profits are offset by destruction of the value of money. The major banks are using fraudulent accounting via Mark-to-Model accounting, along with a myriad of other accounting tricks and the offloading of junk onto the government via Freddie and Fannie. Remove the false accounting which is rampant throughout all of corporate America, and real corporate profits would have stayed very negative the past couple of years.



Now this morning, despite the fraudulent accounting, Q2 “profits” that were originally reported as being up 7.8% year over year were revised down to 0.0%! My, that’s quite the revision and shows just how fast the situation is changing. And if Q2 is flat year over year, then Q3 is very likely to wind up negative, again despite the false accounting.



All the fraud and overstatements mean that equities are very mispriced – have been for quite some time. Supposed Price to Earnings are just that, supposed. This is just one of the reasons why I claim that the markets are currently not real, and I would advise people not to participate in them or to contribute to the criminal misconduct.



“Consumer” Sentiment will be released at 9:55 Eastern this morning, it will be reported inside of today’s Daily Thread.



Of course we are all hanging on the Bernank’s every word – ugh. Could care less, really. The only word properly associated with that man is “guilty!” His actions have damaged this nation severely, but it’s not just him, it’s the entire notion of a private “Fed” controlling the production of money – that is a no win proposition for citizens who have become nothing but “consumers” in the narcissist’s lexicon.



What I now see in the equity markets is a larger sideways triangle that appears bearish – of course manipulation just is, so take that triangle within the framework of corruption that we have. Below is a daily chart of the SPX:







And below is a 1 hour chart of the futures with the DOW on the left and S&P on the right, you can clearly see the same triangle forming but in more detail:







Waiting on the Bernank with baited breath… Slip Sliding Away.







Kamis, 25 Agustus 2011

Morning Update/ Market Thread 8/25 - Much Ado About Nothing Edition…

Good Morning,



Equity futures are up slightly this morning, with the dollar holding in its recent range, bonds are slightly higher, oil is hanging out at $85, gold is still correcting at $1,740, silver is flat, as are most food commodities.



Really, the “Fed” is meeting at Jackson Hole and the world is waiting with bated breath? Turn on the T.V. and the clowns will tell you what the criminals might do, this or that, criminals & clowns. It’s quite a freak show, and their location says it all. Note that they aren’t meeting in Detroit. It could just as easily be monikered “The Narcissist Convention,” whose motto is, “Proudly taking more than we give, since 1913.”



For the non-narcissists out there, if you are feeding the criminal’s “markets,” then you might want to think about karma for a minute or two. Humankind is made up of trillions of little transactions that all equal big things, and a general direction. If you like the current state of impossible math affairs, then by all means, keep trading those wonderful ETFs and providing fuel to their HFT fires. But if you don’t like the flames, then perhaps we should all work to remove the fuel? That’s what I’m saying, in fact I’ve created a path where some of that fuel can be used to produce real things and create real jobs. If the situation bothers you and you would like your life’s energy to be truly productive, get in touch.



I’ll say it again, the markets are not real, and the “Fed” Ponzi is coming to an end. It was easy for math literate people to see a decade ago, and now even those who don’t ‘do’ math can see it. Just look at Libya, amazing how fast things can turn. One day you’re supporting those in power, and the next you are a hunted criminal. Karma. You don’t want to be on the wrong side on that day – think about your actions is all I’m saying.



Yesterday and still today the clown complicit media was touting the trumped up Durable Goods report. Today the Weekly Jobless Claims rise again, yet almost no mention of it in the circus… from the clowns. Fluff with no substance, it’s the fluff circus with complicit clowns and narcissistic criminals running the show. Embarrassing is what I say.



Weekly Jobless Claims jumped 9,000 to 417,000 from last week’s 408,000. Of course last week was revised higher 4k and so Econocomplicit compares apples to oranges to say that claims only rose 5,000 instead of the 9,000 it actually did, thus underreporting the climb by nearly 100%. Fluff, here’s the complicit clowns:

Highlights

Initial jobless claims rose 5,000 in the August 20 week to an adjusted total of 417,000 but were skewed higher by a labor strike at telecom provider Verizon that has since ended. The Labor Department says there are at least 8,500 claims related to the strike in the week and at least 12,500 in the prior week (these levels are before adjustment). The adjusted total for the August 13 week is revised 4,000 higher to 412,000. The four-week average ended its seven-week run of declines, rising 4,000 to a 407,500 level that shows a 7,000 improvement from the month-ago comparison.



Continuing claims for the August 13 week fell 80,000 to 3.641 million for the lowest level since September 2008 and the financial meltdown. The four-week average is down 20,000 to 3.701 million with the month-ago comparison showing little change. The unemployment rate for insured workers, at 2.9 percent, has been inching back and forth between this level and 3.0 percent since February.



Markets are showing little initial reaction to the report which, outside of the Verizon strike, points to mildly improving conditions in the labor market.


My hope is that the clowns who earn money writing this tripe are fully invested in these markets – I’m sure they are, and I’m sure that in the end they will get what they deserve. If you don’t want to wind up in the same place as them, then I suggest you get real.



Those getting nervous by the attack on gold shouldn’t be. Gold is not going to collapse to nothing, not as long as the “Fed” is still wrongly in control of the production of our money. Sure, they are going to do everything they can to manipulate it and to shake you out of your position, that’s because the narcissists know what’s real and what’s not and they want it for themselves – narcissists don’t like others possessing more of what’s real than they do. Gold could lose half its value and still would have tripled from where it was just six years ago. Hang on, you will know it’s time to let go when you see something similar to Tripoli happening on the steps of the “Federal Reserve” building.







Rabu, 24 Agustus 2011

Morning Update/ Market Thread 8/24

Good Morning,



Equity futures are close to even this morning following yesterday’s fluff. The dollar is down, bonds are down a little, oil is flat, gold & silver are lower, while food commodities are flat as a tortilla – corn or wheat, doesn’t matter.



The people in this world who I respect the least, those who run the Mortgage Banker’s Association (okay, make that second to last), reported that the Purchase Index fell 5.7% in the prior week, and according to them hit the lowest level in modern record keeping. Here’s Econogullible:

Highlights

July home sales proved disappointing and MBA's purchase index points to further bad news for August. The purchase index fell steeply for a second week, down 5.7 percent in the August 19 week and now at its lowest level in 15 years. Low interest rates aren't helping with applications falling across the board including a 15 percent fall for jumbo loans and an eight percent fall for government housing programs. Low rates had triggered a surge in refinancing applications which however eased back 1.7 percent in the latest week. Rates moved slightly higher in the week with the 30-year up seven basis points to 4.39 percent.


Right, record low. And we’re supposed to believe the wild refinancing number last week, but this week it’s negative? To say that they are making stuff up would be kind. To call their report a lie or outright fraud would be in line with reality.



The July Durable Goods report shows mysterious improvement. I don’t trust this report either and also realize that “goods” in their mind are always first measured in dollars, and to make them “real” they correct using inflation data that is simply not real. So, at this stage we are reporting this stuff just to keep an eye on the criminal enterprise that is the “Fed,” not that we believe or act on any data they produce. Here’s Econopray with the goods:

Highlights

A monthly surge in new orders for motor vehicles & parts, the best in eight years, headlines a strong durable goods report for July. New orders for durable goods surged 4.0 percent in the month with the motor vehicle component up 11.5 percent in what appears to be the well anticipated Japanese-related snap back. Aircraft orders, which nearly always show wide month-to-month swings, rose 43 percent and together with motor vehicles made for a 14.6 percent jump in the transportation category. Excluding transportation, new orders rose a solid 0.7 percent following 0.6 and 0.8 percent gains in the two prior months.



A surge in overall shipments is another big plus for this report, up 2.5 percent on top of June's 1.1 percent gain. Primary metals show a third straight month of shipment strength as do motor vehicles and aircraft. Capital goods also show gains in shipments in what offers an early signal of strength for third-quarter business investment.



Other details show a steady 0.8 percent gain for overall inventories with unfilled orders showing an increasing rate of build, from 0.3 percent in June to 0.7 in July. But the one factor that limits the impact of this report on the economic outlook is that it's data for July. Early looks at August conditions, that is from the New York, Philly, and Richmond Feds, show significant contraction making it too soon to say whether manufacturing, which has been the economy's backbone, is once again re-accelerating.


Please… auto sales surging? Really? Sold to them.



The FHFA House Price Index is released at 10 Eastern this morning, and as usual will be reported inside of today’s Daily Thread.



So, the markets zoom ahead of the Jackson Hole “Fed” meeting announcement. Wow, really, can’t wait. What are they going to do? More QE? As if that has accomplished anything positive so far? Is there really political support for that? I’m not expecting nearly as much as the market seems to be, but know that regardless of what they do, or don’t do, the impossible math will continue to get worse as long as they are in control of the production of our money. That control provides them the string that makes the politicians into puppets, and the people into slaves.



Did Paul Krugman really say, "People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage?"



Space aliens and now this. And these are the guys held up as experts to the world and given Nobel Prizes?



Stupid is as stupid does, Forrest Krugman. This is called “The Broken Window Fallacy” (thanks Mick).







So many myths out there, so little time. Run Forrest, RUN!



Did you see the pictures of Warren Buffett meeting with Obama to tell him what he thinks of the economy?







What a piece of work, both of them. That they would even listen to criminal Buffett is one slap in the face of the people (don’t buy his BS “tax the billionaires” cover), but that they would tout the President listening to, or acting upon, an obvious special interest party shows blatantly once again that this is a special interest government. I can almost see the strings in that photo.







Selasa, 23 Agustus 2011

Morning Update/ Market Thread 8/23

Good Morning,



Futures were higher this morning… in fact they were substantially higher, but have since given all the after hours fluff back. The dollar, of course, took a plunge to allow the ramp in equities – the net effect is those in the market get to momentarily sustain their accounts while the rest of the world wallows to support them. It’s a giant inequity in the making, look for more nasty “other events” which are now constantly in motion. Bonds are lower, oil is higher, gold reached an unbelievable $1,915 an ounce before pulling back under $1,900, silver is following, and food commodities are zooming just to add injury to the now obvious insult.



The only economic release today is New Home Sales which is released at 10 Eastern and will be reported inside of today’s Daily Thread.



While on the subject of homes, I want to post an update to the Option-ARM reset chart since we are almost exactly at the peak of Option-ARM resets right now:







These mortgages must reset, and note that rates went down sharply right into the peak. Doesn’t matter, many of those ARMS will reset much higher anyway because of the way they were written (to take advantage of the home “owner”), and those looking to refinance won’t be able to because their McMansions won’t appraise for their loan value. That means more people will fall behind and will simply be unable to keep their payments going, thus further injury to the fraud/fluff banks.



Still, reaching the peak in resets means that a very heavy anchor is about to get lighter very quickly – and that will mean that the housing market will at least begin not to have the crush of ever increasing inventory. This will take time, don’t look for an immediate turn around, just that the pressure will begin to ease.



Let’s take a moment to assess the situation in Fukushima. It’s as ugly as ugly gets, the product of special interest pandering, unchecked growth, and greed, this should give tremendous pause to any nuclear advocate and yet here in the U.S. we are talking tough about coal, not nuclear despite the fact we have many vulnerable plants with waste stacked monumentally high. In the following video Arnie Gunderson once again rationally updates you on the situation:



New Data Supports Previous Fairewinds Analysis, as Contamination Spreads in Japan and Worldwide



We all need to get REAL folks, and stop supporting the criminals who brought this mess to you.





Senin, 22 Agustus 2011

Morning Update/ Market Thread 8/22

Good Morning,



Equity futures are soaring… after tumbling more over the weekend. No, I won’t offer up some lame reason, I will simply remind that these “markets” are not real, they are a computer simulation designed to separate you from the fruits of your productive efforts, if any such efforts still exist. Of course the dollar must be giving up purchasing power for that to happen, bonds are lower, oil is higher, gold reached just under $1,900 (!!!) an ounce before pulling back, silver is zooming as well, and at this rate it won’t be long before than $17 hamburger costs $50.



The Chinese came right out and said it to Joe Biden – basically that we are in process of defaulting by devaluing our money, but that at some point in the future America will default on her debts. Yep, welcome to reality – I guess they really do teach math better over there.



The July Chicago “Fed’s” National Activity Index came in at -.29, this is better than June’s -.60. Remember two things about this; one is that it comes from the “Fed” and therefore is as real as the stock market activity; and two, is that the productivity cliff dive came in August, so next month’s reading should be interesting. Here’s Econodon’tknow:

Highlights

Growth remained below historical trend in July but only slightly. The Chicago Fed's national activity index improved to minus 0.06 from an upwardly revised minus 0.38 in June (minus 0.46 first reported). The improvement is led by a plus 0.28 contribution from production-related indicators, well up from a very slight plus 0.03 contribution in June. Employment-related indicators came in at plus 0.05 vs June's minus 0.10. Consumption & housing was minus 0.33 in July, barely changed from minus 0.34 in June. Sales, orders & inventories are a negative in the month, at minus 0.06 vs June's plus 0.03.



The three-month moving average improved sharply in July, to minus 0.29 from minus 0.54 (upwardly revised from minus 0.60). Improvement in this report is of course welcome but whether it will extend into this month is uncertain given that July's strength is concentrated in manufacturing where early indications for August, that is from last week's Empire State and Philly Fed reports, are decidedly weak.


Huh? Did that make any sense whatsoever to you? If you don’t really know what you’re talking about, then the economic experts resort to the time-tested method of “Baffle ‘em with bullshit.” That, of course, is the favorite tool of almost everyone surrounding the markets and finance in general.



The economic data is fairly light this week, with housing data, consumer sentiment, and Q2 GDP revision later in the week.



The NASDAQ created an inverted hammer on Friday, and that was mirrored on the VIX. Below is a daily chart showing that hammer, whenever you see one like that you should be thinking reversal and it looks like we now are getting confirmation:







What will the markets do from here? Who cares? If you are smart, you will not contribute to the criminals and their enterprises, and you will instead look for REAL opportunities to put your money to work with real people who are doing real things.



Bill Still created an excellent video this weekend that should go viral because he is 100% correct:









Jumat, 19 Agustus 2011

Endowment Fund Should Embarrass the State and the University of Washington…

In the Puget Sound Business Journal this morning is an article bragging:

University of Washington fund beats bigger rivals.



Amid the financial gloom of the past three years, one part of the University of Washington has rebounded: Growth of the UW’s endowment fund has outpaced those of Harvard, Yale and other giant schools.



The value of the university’s consolidated endowment fund rose to $2.14 billion on June 30 at the end of the third quarter of 2011’s fiscal year, the latest number available, up 10 percent from a year earlier. That follows an 11 percent rise in 2010.



Like many investment pools, the UW endowment has bounced back since it lost 23 percent of its value during the financial crisis…


That’s nice, isn’t it? Alumni are very generous and contribute greatly to the University’s Endowment. And the Wall Street people who run this giant fund are doing a great financial engineering job creating “growth.”



Of course with a fund that size, there is A LOT of fees to be earned.



But what is the endowment fund for anyway? Is its goal to provide churn and fees to the people who manage the fund? Or is the purpose of the fund to educate this state’s youth?



I would contend that education is taking a back seat to Wall Street… again. Let’s follow the flow of money, shall we?



The University raised tuition 28% in the past two years, all approved by the Washington State Senate who regulates the tuitions of the six Washington state colleges. They get to regulate the tuition because the state uses taxpayer money to help fund the school.



Over the past two years, the colleges, led by the U.W., lobbied the state for the right to set their own tuitions. The state, without the approval of the voters, gave them that right:







Immediately upon approval, the University of Washington raised tuitions AGAIN, this time by a record amount, 20% more on top of the previous raises. In addition, they are laying off a “significant” portion of their staff due to taking $106 million in cuts from the state.



The cut in state funding is due to the impossible math the state faces. It’s impossible because everything the state does they first borrow money from Wall Street and pay them fees and interest to finance it! Of course any push for a state chartered bank that would eliminate finance costs doesn’t make any headway because it’s fought by the private banks who produce money from nothing.



So, the state is actually bankrupt. The state gives the colleges the right to massively raise tuition, but in turn cuts the amount of funding to the schools – not eliminate mind you, but cut. The schools cut staff, hike tuition which comes out of the pockets of Washington families… AND further burdens the students with massive student loans, the only category of consumer credit that is still growing.



WHO issues those loans? Why private banks, of course! Who profits from those loans? Private banks, of course! Who lobbied to make student loans the only loans that are not dischargeable in any fashion whatsoever inside of any bankruptcy process? Private banks, of course!



So the state is bankrupt, Washington families are poorer, and the students are debt slaves. All are the servants of the private banks.



Meanwhile the University’s endowment fund balloons to well over $2 billion!!! And the boys on Wall Street churn and fee, churn and fee.



Congratulations! I’m so proud!



Of course I'm not really proud, it's just that this disgrace produces a sarcastic tone. What I'm really wondering is what would happen if the University used its endowment for its intended purposes instead of sticking it to the students and families? You can do one heck of a lot of educating with $2 billion! Do the math. This is the typical create an emergency on one hand while robbing you with the other. It’s a disgrace and an embarrassment from my point of view.



The state is doing this same trick in other areas. The State parks is one, where the state just unilaterally imposed a new $30 annual parks fee in order for anyone to enter our beautiful state parks. Let’s examine that flow of money…



State parks were already bought and paid for by the taxpayers. Their upkeep has been paid for from sales and property taxes. The impossible math created by the private banks again causes the state to be functionally bankrupt. Instead of taking it out on the bankers, the state turns to its citizens claiming they need the money or else they will shut down the parks and deny the citizens access to their own land!



No vote, they impose the fee. The money travels to the general fund where it services the debt held by the private banks. Now think about the poor who are getting poorer. Many can’t afford food for their children, and the public parks were one of their only refuges. No longer – now you can’t even enjoy nature without an additional fee on top of the taxes we already pay.



These schemes do nothing but place further pressure on the people. This pressure will continue to build under the weight of the impossible math until “other events” force a proper change in the rule of law.



The state should be embarrassed, the Governor should be embarrassed, the university should be embarrassed, but I know that the banks are not. They are narcissists – the more they take, the better they feel.

Morning Update/ Market Thread 8/19 - Philadelphia Debt Saturation Cliff Edition…

Good Morning,



Equity futures are down once again this morning despite a rapidly falling dollar. Bonds are higher again, now into record territory on a closing basis. Oil is flat, but gold is running wild, already hitting more than $1,882 an ounce! Silver is also up substantially, and food commodities are back into the range they have been the last couple of weeks.



That rise in gold is definitely on another level. It has now risen 55% in the past year, the one year chart is below:







Note the parabola on the 10 year monthly gold chart… they start out subtly, beginning here from a $250 base and growing at a moderate rate until 2005 when the growth rate began to build. Then, in late 2008, early 2009, when quantitative easing was announced, gold began rising on a much steeper path:







Sure Bernanke, you can create inflation… and you can wreak havoc on the world too, which is exactly what you have done.



The bond market is now in record territory, with rates even lower than at the height of the 2008 crisis. That level of debt is not sustainable, the math that took it there is quite impossible – it is therefore a bubble of giant proportions and that will burst just as surely as the sun will rise again tomorrow. It is the toppling of the bond bubble that will mark the end of the current power structure, for it is the bond market that gives them power – it is the base of their Ponzi.



Once macroeconomic debt saturation has set in, forcing more debt backed money into the system only works to burden the economy further with impossible math – it becomes a drag that real production must support. The more drag, the less real production there is, and the FEWER jobs there will be!



“Stimulating” the economy with debt backed money works until the debt saturation point, but after that point it is exactly the opposite – that’s where we are, the backside of the debt curve.



Propping up the stock and bond markets at this point destroys the real economy, and it destroys jobs. Realize that it doesn’t have to be like this at all! There is zero need for any national debt whatsoever – it is a construct of private individuals, and it flies in the face of what’s natural and what’s sustainable. It is a system based upon individual greed – great if you’re one of the benefactors, sucks if you’re not. The power to produce money rightly belongs to everyone equally, therefore it is our government’s responsibility. In fact it’s the most important thing our government should be in control of, and it’s the one thing they are not!



There are no economic reports today, however the Philly “Fed” Survey yesterday was a shocker, falling from the prior index value of 3.0 all the way to -30.7. The consensus of the clowns was +4.0. This report was for the month of August as the survey was accomplished this month and is our first look at August manufacturing data. This is a cliff dive compared to data from July, the Industrial Production number released just this Tuesday was positive, but it was based on July data. Here’s Econorattled:

Highlights

An eye popping minus 30.7 headlines a troubling manufacturing report from the Philly Fed. The reading indicates very significant month-to-month contraction in general business conditions for August, one consistent with a shock and one compared against a small gain of 3.2 in July. But the report cites no particular factors behind the contraction, contraction that's evident throughout the details of the report.



New orders fell to minus 26.8 from plus 0.1, shipments minus 13.9 from plus 4.3, number of employees minus 5.2 vs plus 8.9, unfilled orders minus 20.9 vs an already dismal minus 16.3. Price data show a contraction for output prices and a much slower rate of inflation for input prices. Delivery times improved significantly which is another sign of weakness.



The six-month outlook also crumbled, coming in above zero but just barely at 1.4 vs July's 23.7. The Empire State report, released Monday and covering the New York manufacturing economy, also showed contraction but at a much less severe rate. Next week and the week following eyes will be on a run of other regional indicators to see if the outlook for the national manufacturing economy has suddenly taken a turn for the worse.


Zerohedge ran a chart yesterday comparing Nonfarm Payrolls to the Philly Fed Survey. The correlation is obvious, as is what we can expect for near term employment prospects:







Meanwhile the evening news carries footage of President Obama vacationing in Martha’s Vineyard, while juxtaposing images of the unemployed masses lined up in Philadelphia for a job fair – the line circled entire city blocks. Sad. Those people stand no chance with the current criminal class running the show, and they know it. The youth know their future. They see two separate and distinct rules of law – one where the upper criminal class gets away Scott-free robbing trillions, while the lower classes suffer the fate of no meaningful employment and an oppressive rule of law foisted unfairly upon them from the criminals in suits.



Yes, they are going to lash out, this is all a part of the one and only rule of law that matters, that is the natural rule of law which is self-righting and is a part of the evolution of our species – it is a part of the condition of humanity. That natural condition demands equal economic opportunity for everyone. When it gets too far out of balance, then the pressure builds until “other events” release the pressure and restore the balance.



Humanity is slowly working towards the tenants of Freedom’s Vision. That is that the power of money creation belongs to the PEOPLE equally. Any rule of law that gives that power to a few individuals is an UNNATURAL RULE OF LAW. When unnatural rules of law are present in society then pressures of inequality build until, again, those “other events” occur to rewrite the rule of law.



A major rewrite is coming, those “other events” are in full swing. I won’t be surprised if the rewrite begins on the streets of Philadelphia…





Kamis, 18 Agustus 2011

Morning Update/ Market Thread 8/18 – Boycott the Elections Edition…

Good Morning,



No doubt about it, confidence is lost. Not only are equities down hard this morning, but gold is above $1,820 an ounce and trucking. The dollar is up with the deleveraging, bonds are sharply higher, oil is down, silver is up and food commodities are lower. This is the lack of confidence trade, however money is still flowing into bonds, when money is flowing out of bonds with the above other conditions then you know you really have a problem. Of course the markets aren’t real as we don’t know where the “Fed” and HFT manipulators are pushing things. Keep your eye on gold, it is parabolic.



The oil chart is saying that another wave down has started, but so are the equity charts where we have now broken down from the rising wedge:







The rising wedge in the futures is also breaking, it was wider due to activity that occurred outside of normal trading hours:







Weekly Jobless Claims jumped once again, this time rising to 408,000 for the prior week. Of course the prior data was revised higher as well, same old game:

Highlights

Initial claims rose in the August 13 week but today's report still points solidly to month-to-month improvement for the August employment report. Initial claims came in at 408,000 for a 9,000 rise from 399,000 in the prior week which was upwardly revised by 4,000. But the four-week average fell for the seventh straight week, down 3,500 to a 402,500 level that is nearly 20,000 lower than the month ago comparison.



Continuing claims were little changed, up 7,000 to 3.702 million with the four-week average down 5,000 to 3.716 million. The unemployment rate for insured workers is unchanged at 2.9 percent.



There are no special factors distorting the data which again point to improvement in the labor market.







The CPI, which vastly understates inflation, rose .5% in July, much more than expected, but largely due to rising food costs and the short term bounce that occurred in oil. Still, it’s claiming 3.6% consumer inflation for the year which again is about 9% lower than tracked by Shadow Stats. This single distortion ripples through all others and is the most important false data that is at the root of the bad math, and at the root of the disconnect between reports and reality. That disconnect is a very large part of the reason people are losing confidence. Here’s Econoinane:

Highlights

Consumer price inflation surged in July on stronger gasoline and food costs. The consumer price index in July jumped 0.5 percent. The June number topped the median estimate for a 0.2 percent increase. Excluding food and energy, the CPI increased 0.2 percent after a 0.3 percent jump the prior month.



Turning to major components, energy rebounded 2.8 percent after dropping 4.4 percent the month before. Gasoline jumped 4.7 percent, following a 6.8 percent plunge in June. Food price inflation accelerated, jumping 0.4 percent, following a 0.2 percent rise in June. Within the core the shelter index accelerated in July (largely lodging, up 0.9 percent), and the apparel index again increased sharply ( up 1.2 percent). In contrast, the index for new vehicles was unchanged after a long string of increases.



Year-on-year, overall CPI inflation worsened to 3.6 percent from 3.4 percent (seasonally adjusted) in June. The core rate rose to 1.8 percent from 1.6 percent on a year-ago basis. On an unadjusted year-ago basis, the headline number was up 3.6 percent in July while the core was up 1.8 percent.



Despite a sluggish economy, inflation is back but most of the acceleration is supply related, notably for food. And energy rebounded only partially from the prior month. The lodging subcomponent, however, probably is seeing some improved demand which is actually a good thing. Inflation is up but not much is related to a surge in demand.


Not much related to a surge in demand? LOL, are these clowns for real? People are getting angry, deservedly so, over this type of inane “analysis.”



A lot of data comes out at 10 Eastern this morning, including Existing Home Sales, the Philly “Fed” Survey, and supposed “Leading” Indicators. We’ll report those inside of today’s Daily Thread.



Boycott the election? You bet. Withdrawing all participation in the central banker backed schemes is really the only appropriate action from my point of view. I don’t support or participate in their phony markets, I don’t support or participate in their phony banks, so why should I support or participate in their phony elections?



No more for me. Not until the money power has been restored to the people. I refuse to be manipulated with their inane and insane distract you drivel. The latest drivel of which dripping from Michele Bachman’s mouth, “I’ll bring back $2 gas!”



Major league eye roll there.



As they say, fool me once… well I think I’ve been fooled many, many times when it comes to elections, that was before I really understood that the politicians are nothing but central banker spokespeople. I saw Obama talk, and man did I not like Bush. That was the setup, you WANTED to believe and to have HOPE! He flat out said he was going to end the wars and bring the troops home! Of course he couldn’t add 2 + 2, but at least he was on point regarding the insane wars… but then once again actions completely disconnect from words, all confidence is now lost and I can’t say who the worst president is, but I actually now know the reality is that the United States doesn’t really have a President at all, what we have is a central banker spokesman. Doesn’t matter the flavor, they cannot get elected in what’s becoming billion dollar campaigns without central banker support.



Whatever your pet issue in politics is, be it war, abortion, gay rights, whatever… you need to understand that they are all secondary to the most important issue which is WHO controls the production of money. For it is they WHO control all those other issues! If YOU want to have a legitimate voice in a real government, YOU must control the production of money!



By YOU, of course, I mean that your representative in government is supposed to represent you, not a central banker, not a corporation.



Change is coming quickly now. “Other events” are in full motion and you are going to see them accelerate. Keep your eye on the ball and do not be distracted with their games. Withdraw your support from their games and get into something real.







Rabu, 17 Agustus 2011

Morning Update/ Market Thread 8/17- Confidence is Lost Edition…

Good Morning,



Equity futures are higher this morning but still tracking inside of that rising wedge. Of course we are sacrificing the dollar to do it, bonds are flat, oil is higher, gold is flat, silver is higher, and food commodities are breaking higher out of the range they have been in.



On the front page of cnn.com is a poll asking, “Have you lost confidence in the ability of world leaders to tackle economic problems?” Currently the response is that 86% have already lost confidence! That’s really all you need to know, with numbers like that, it is game over for those in power… eventually. In the mean time we have to suffer through “other events” while we watch the central criminal’s control slip away.



Gold at $1,800 an ounce? Yeah, there’s your confirmation right there that confidence is gone. It’s not just in the process of leaving, it’s already gone, the victim of impossible math. Merkel-Sarkozy deal? Who cares? These clowns come up with scheme after scheme – they are all the same… Make money from nothing to indebt already over-indebted countries (countries that are made up of real people with stagnant and falling incomes). Its impossible math, it simply doesn’t work, can’t work, and thus the loss of confidence is finally here. Those who can ‘do’ math knew this was coming a long time ago, while those who can’t generally are elected to public office. Those who know, but lie or shill, work in central banks.



Markets? Again, they are not real, they are a highly manipulated illusion. Wait. The loss of confidence will eventually shake out the criminals and a new monetary system will be installed. Depending upon events of that shakeout and how the next system evolves will determine whether or not the markets become real again. The criminals must be prosecuted, the rule of law must be restored, the debt saturated condition of the PEOPLE must be cured, and nations need to learn how to operate a money system that does not give private bankers the right to charge the nation interest for its own money, nor give unlimited money making privileges to a few private individuals. Furthermore, the ability of special interests to capture government must be reversed – that is a part of restoring the natural rule of law, the government works for the people, not for the interest of corporations (that are NOT people).



Speaking of special interest create money from nothing criminals, the Mortgage Banker’s Associate claims that Purchase Applications fell another 9.1% in the past week, but that refinance activity increased 8.0%. Sure, whatever… anyone gullible enough to believe that nationwide activity swings 30% or nearly 10% every week, deserves to have their money stolen from them. Here’s Econogullishill:

Highlights

The ongoing drop in interest rates is driving refinancing demand higher but, unfortunately, has yet to drive up demand for home purchases. The refinancing index extended its run of jumps in the August 12 week with an 8.0 percent gain. But the purchase index continues to show weakness, down a very steep 9.1 percent. The report, which is produced by the Mortgage Bankers Association (MBA), cites stock market volatility and weak economic data as possible reasons for the drop in purchase activity.



The rate for 30-year mortgages fell five basis points in the week to 4.32 percent with the 15-year rate also down five basis points, to 3.47 percent for a new survey low. Next housing data will be tomorrow with existing home sales for July, which based on prior gains in the pending home sales report and not any strength in MBA's purchase index, are expected to show improvement.


Interest rates have been at historic lows for years now. Really, a few basis points move spurs huge swings in refinancing activity? BullS___! Anyone who still wonders how confidence can be lost need only study the operations of the MBA.



Speaking of fraudulent reports, the PPI came in at .2% month over month, but at 7.2% year over year. Here’s Econocon:

Highlights

Producer price inflation surprised on the high side despite a softening in energy costs. The culprits included food, motor vehicles, and tobacco. Producer prices in July rebounded 0.2 percent, following a 0.4 percent drop the month before. The July pace came in higher than the market median estimate for no change. By major components, energy dipped 0.6 percent after a 2.8 percent fall in June. Gasoline declined 2.8 percent after dropping 4.7 percent the month before. In contrast, food costs jumped another 0.6 percent, following a rebound of 0.6 the previous month.



At the core level, PPI inflation accelerated to a 0.4 percent rise after jumping 0.3 percent in June. Analysts had forecast a rise of 0.2 percent. Strong gains were seen in tobacco products, light trucks, and pharmaceutical preparations. Nearly one-quarter of the July advance can be attributed to a 2.8 percent increase in prices for tobacco products. Light truck prices jumped 1.0 percent in the latest period while pharmaceutical preparations surged 3.2 percent. Passenger car prices rose but a more moderate 0.2 percent. Still, shortages of motor vehicle models dependent on parts from Japan continued to put upward pressure on prices.



For the overall PPI, the year-ago pace in July posted at 7.2 percent, compared to 7.0 percent in June (seasonally adjusted). The core rate in July rose to 2.5 percent from 2.3 percent the month before (seasonally adjusted). On a not seasonally adjusted basis for July, the year-ago headline PPI was up 7.2 percent while the core was up 2.5 percent.



Overall, inflation has picked up due largely to food costs and despite softer energy costs. The core rate is up significantly but likely due to temporary factors.


Inflation statistics vastly underreport inflation. According to Shadow Stats the CPI is understated by about 9% (!), and that would apply to Producer Prices as well, which tend to lead Consumer Prices:







Get Real.







Selasa, 16 Agustus 2011

Morning Update/ Market Thread 8/16 – Terminal Edition…

Good Morning,



Futures are lower this morning with the dollar slightly higher, bonds higher, oil lower, gold & silver higher, and most food commodities are slightly lower.



Stocks are creating a rising wedge pattern that is getting close to terminating. Below is a 30 minute chart of the SPX, you can see that wedge clearly and this morning we are off the upper boundary:







In Europe, news of weaker than expected GDP “growth” has disappointed the markets once again, and thus it is blamed for weakness this morning – the media always has to pin some label as to why…



Meanwhile the housing market in the U.S. continues to wallow in depression. Housing starts for July fell from June’s 629,000 to 604,000, with permits also falling and both disappointing. Here’s Econoclown:

Highlights

New housing construction in July headed back down to trend sluggishness after an unexpected boost in June. Housing starts dipped 1.5 percent in July, following a 10.8 percent jump in June (originally up 14.6 percent). The July annualized pace of 0.604 million units beat expectations for 0.600 million units and is up 9.8 percent on a year-ago basis. The decline in July was led by a 4.9 percent drop in the single-family component, following a 7.5 percent surge in June. The multifamily component continued upward, gaining 7.8 percent after jumping 21.2 percent the prior month.



By region, the drop in starts was led by a monthly 37.7 percent decrease in the Midwest with the West declining 3.0 percent. The Northeast gained 34.7 percent while the South rose 5.6 percent.



Homebuilders remain cautious as housing permits slipped 3.2 percent, following a 1.3 percent rise in June. The July pace of 0.597 million units annualized came in below the median forecast for 0.606 million. Permits in July are up 3.8 percent on a year-ago basis.



The bottom line is that housing is still extremely anemic with perhaps mild strength in the multifamily component. Until labor markets improve significantly, this sector is likely to remain in the doldrums.



On the news, equity futures edged up but remained significantly negative due to disappointing news on second quarter growth in Europe.


The wave of deflation is already hitting Import and Export price data, with Export prices falling and Import prices rising. That would seem to me to be the worst of all worlds, and is a product of failed and corrupt central banking policy. Again, let’s bring in the clowns:

Highlights

A monthly upswing in prices of petroleum products drove import prices up 0.3 percent in July vs June's revised 0.6 percent decline in a month when petroleum prices fell. Prices for imported petroleum products rose 0.6 percent in July and fed through to a 0.2 percent rise in industrial supplies excluding petroleum. The latter is a closely watched component which in June fell 0.4 percent. Prices for imported finished goods are mixed showing no change for capital goods though consumer goods do show a less-than-moderate gain of 0.4 percent.



Prices for US exports, down 0.4 percent in the month, were pulled down by a big fall in agricultural prices which fell 4.3 percent in July. Excluding agricultural prices, export prices rose an incremental 0.2 percent.



A look at year-on-year rates, which are the highest since 2008, shows the longer term effects of this year's high prices for both petroleum and agricultural products. Import prices, reflecting petroleum, are up a year-on-year 14.0 percent with export prices, reflecting agricultural products, up 9.8 percent. But the monthly readings in general are tame and should not upset expectations for tame readings in tomorrow's producer price report and Thursday's consumer price report.


Industrial Production was just released and contrasts with the Empire State report that was negative. Industrial Production, according to this report, supposedly rose .9% in July. This is, however, another “Fed” report – one that was also modified a few years ago so that the data more closely fit into their fake inflation under reporting models. Thus this report also suffers from a false upside bias, the same as our current GDP where financial engineering is equated to real production. Fluff and fraud in the engineered data, anything real is negative. Here are the clowns shoveling the fraudster’s manure:

Highlights

Manufacturing appears to be on the mend as production improved sharply in July and June was not as soft as earlier believed. Overall industrial production in July posted a 0.9 percent gain, follow a 0.4 percent rise the prior month (originally up 0.2 percent). The latest figure topped analysts' forecast for a 0.5 percent boost.



By major industry, manufacturing showed significant improvement, advancing 0.6 percent, following rise of 0.2 percent in June (originally no change). The auto component finally made a comeback, jumping a monthly 5.2 percent after three consecutive declines including June's 0.9 percent decrease. And production was moderately healthy outside of autos. Excluding motor vehicles, manufacturing rose 0.3 percent, following a 0.2 percent rise in June.



Turning to other major sectors, utilities output rose 2.8 percent after increasing 0.8 percent in June. Mining output advanced 1.1 percent after growing 1.2 percent in June.



Overall capacity utilization in July improved to 77.5 percent from 76.9 percent the prior month. The June number came in higher than the median estimate for 77.0 percent.



Today's industrial production report is probably the strongest argument so far that second half growth is improving from a sluggish first half.



On the news, equity futures rose but remained negative on disappointing news on second quarter growth in Europe.


Pleeeaaassse! What nonsense. And even with their over reporting, these numbers are nothing but depression readings. Think about how long the economy has been shedding manufacturing and yet we STILL only have mid to upper 70s capacity utilization! Sick.



The impossible math of debt saturation will force the fraudsters to adjust their data some more before it’s over. And the clowns, fully dependent on the manure for their living, will no doubt continue to shovel it. But the impossible math just is, and therefore will not be denied – it is terminal.



Yesterday Starbuck’s CEO, Howard Schultz, called publically on all corporations to end their political contributions until the politicians reach a sound and workable agreement on the national debt. This is quite the statement from one of our large corporations, ground breaking that he would do that and unthinkable just a short time ago.



His call out is the result of seeing the impossible math manifest itself – thus it is another “other event” on the road to a total loss of confidence. What Shultz may or may not understand, is just how terminal the math situation is. There is no fix short of removing the bankers, clearing out the debt saturated condition, and taking back control of the production of our money.





Senin, 15 Agustus 2011

Morning Update/ Market Thread 8/15 – Hyperinflationary Melt-Up/ Waves of Deflation Edition…

Good Morning,



Equity futures are slightly positive this morning on the back of a rapidly descending dollar. Bonds are higher, oil, gold, and silver are flat, while food commodities are slightly higher.



The futures appear to be making a rising wedge or bearish flag. If they stay within the confines of that flag over the next couple of days, then I will expect it to break downwards… but if it breaks upwards, it could still be creating a rising wedge and the upper boundary will have to be watched. Regardless, HFT fun and games are a given:







Speaking of HFT fun and games, the last week was the most volatile week in history point-wise, with 4 days of 400+ point swings on the DOW. What’s that telling you? That the markets are exactly what I’ve been saying all along – not real, highly manipulated, and mostly fluff. Why would any rational person “invest” in such a market? Beyond me, my advice is to get real, stay real, and tell the supposed experts who contributed to this nightmare where to go.



Think about it… The “Fed” creates massive quantities of money from nothing, we are spewing debt out all orifices, we raise the debt ceiling, the U.S. debt is downgraded… that results in what should be higher interest rates. But the “Fed” is creating money from nothing to buy bonds to keep interest rates artificially low. Can’t allow rates to rise because interest expense becomes tremendous – so they print more to buy more bonds. And the spiral continues.



Whenever that spiral is interrupted waves of deflation result. But because the “Fed” is in control and is not allowing the debt to clear, each wave of deflation is met with more printing, and thus the primary trend is inflation. Inflation is the death of all currencies throughout history, all of them – ours will be no exception that is painfully obvious.



Daily Thread commentator hsir135 posted a couple of good charts over the weekend that are a good reminder of the primary trend. The first is our current account deficit – of course it’s just a fraction of the total real deficit, but let’s live for a moment in the “Fed’s” fantastic lie:







The next chart shows the U.S. Current Account Deficit with the debt limit increases and also the price of gold. Amazing correlation there with gold, those who got real a long time ago have protected themselves, while those who bought into the paper fluff are left on a nauseating roller-coaster ride of fraud and deceit:







Remember, my opinion is that gold is acting to maintain its worth – that doesn’t mean it should be what backs our money. What’s far more important than WHAT backs our money is WHO is in control of creating it.



Speaking of waves of deflation, the Empire State Manufacturing Index took another header in August, falling from -3.76 to -7.72 when +1.0 was expected by the clowns. Here’s Econohope:

Highlights

The first indications on the August manufacturing sector are strongly negative. The Empire State index fell nearly four points into more deeply negative territory, at minus 7.72 to indicate monthly contraction in general business conditions. Details show a third straight monthly contraction in new orders, down more than two points to minus 7.82. Unfilled orders are contracting very deeply, to minus 15.22 vs July's minus 12.22. With new orders on the slide and backlog having been worked down, the outlook for the region's shipments and employment is negative.



The six-month outlook is in fact the most negative aspect of the August report. The six-month outlook for new orders, at plus 6.52, and for shipments, at plus 7.61, are the lowest since 9/11. The overall outlook reading at 8.70 is down nearly 25 points in the month for the lowest reading since early 2009.



Hopefully the six-month readings will be only be temporary, tied specifically to the debt-ceiling drama and what is hopefully now faded market volatility. Industrial production data tomorrow will offer hard data on the manufacturing sector during July while the Philly Fed's report on Thursday will offer more anecdotal data on this month's conditions.


Uh, huh, “hopefully…”



The TIC fraudulent data for June (remember that far back, nice timely “data”), came in barely positive at +3.7 billion, but the Net overall data was negative for the second month in a row, coming in at -29.5 billion. This report is HIGHLY questionable in my opinion as we cannot audit the “Fed” and they do not account publically for all their swap lines and other backdoor dealings. In fact, I would go so far as to call this report, and almost anything that comes from the “Fed” or Treasury, suspect to be polite - all their reports should be filed under works of "Fiction." Here’s Econodope:

Highlights

Selling of US securities by private foreign accounts drove net inflow of long-term securities to a very weak plus $3.7 billion in June vs an already weak and revised plus $24.2 billion in May. Private foreign accounts sold a net $23.0 billion of US long-term securities in the month for the lowest reading on record. Official foreign accounts were an offset at plus $11.5 billion though down from the prior month's $23.2 billion. Foreign demand for US Treasuries, agencies, and corporate bonds was weak across the board though demand for equities was down but still respectable. In a positive, demand for foreign securities by US residents ended a run of outflows with a net $15.2 billion inflow. Low US yields had been pushing domestic investment overseas and limiting investment at home.



But foreign participation in US financial assets is essential for the nation to funds its government and trade debts. And given the effects of the debt-ceiling crisis on investor confidence, the outlook for the July and August TIC reports is not positive. Other details for June show a second straight outflow for total securities which include short-term securities, at minus $29.5 billion vs May's minus $48.8 billion. One positive in today's report is a slight uptick in Chinese holdings of Treasuries, at $1.17 trillion with Japanese holdings only fractionally lower at $911.0 billion.


Here’s the entire TIC report:



TIC June 2011



The Housing Market Index is released at 10 Eastern.



Hmmm, I wonder WHO the real Werewolves of London really are? Think they would fit right into the central banking club…







Jumat, 12 Agustus 2011

Morning Update/ Market Thread 8/12 – Death Cross Edition…

Good Morning,



Ban the shorts! LOL, has never worked, will never work. It is simply more proof of just how un-free the “markets” really are. Still, it’s a temporary excuse to suck the suckers back in so that the HFT boys can churn profits from the dimwits who still believe in the “Fed’s” fantasy… and Santa, the Easter Bunny, and Tooth Fairy.



So stocks are higher for now, the dollar is lower, bonds are higher, oil is higher ($87), gold & silver are slightly lower, and food commodities are in the same range of the past two weeks – high enough to make one choke.



The completely inane Retail Sales report came in at a .5% “growth” rate month over month in July. This is completely absurd and is a closer proxy of money printing than anything else. This report suffers from survivor bias and is artificially elevated by massive errors in the way we under report inflation. Even at that, it was a miss as .6% was expected by the clowns. Speaking of circus callers, here’s Econoshill:

Highlights

Retail sales strengthened in July, led by a spurt in auto sales but with support from most other components. Overall retail sales in July jumped 0.5 percent, following a 0.3 percent rise the month before (originally up 0.1 percent). The July boost was just below the consensus forecast for a 0.6 percent gain. Excluding autos, sales were healthy, posting a 0.5 percent increase, following a 0.2 percent rise in June (originally flat). Analysts had estimated a 0.3 percent increase. Gasoline sales actually rose during the latest month, supporting ex autos. Sales excluding autos and gasoline in July advanced 0.3 percent, following a 0.5 percent rise in June.



Overall, the consumer is still spending, although the pace is hardly gangbusters. Despite difficulties in the financial markets, the consumer has not withdrawn to the sidelines.



On the news, both equity futures and Treasury rates firmed.


“Consumer” Sentiment is released just before 10 Eastern for August. If their sampling contains anything from last week it should be interesting to say the least. Business Inventories also comes out at 10.



The S&P 500 produced a “Death Cross” yesterday which is when the 50 day moving average crosses below the 200dma. This is a very negative technical indicator and will provide strong overhead resistance especially with the 50dma down slopping so steeply:







The DOW has yet to cross but is only a few days away. The RUT also produced a Death Cross yesterday, the NASDAQ is going to cross today, and the Transports aren’t far behind.



Below is a 30 day, 30 minute, chart of the DOW. Here you can see a potential rising wedge forming that gives the market a little more room to rise before its next down stroke. There is a small gap in the chart about the 11,300ish area that may fill first:







What I read in the mainstream regarding these “markets” and our economy is just laughable, a joke. Did you know that “Made in China” is GOOD for Americans! That’s the CNN headline. “Insiders Go on a Buying Spree!” “Warren Buffett – “The Lower Stocks Go, the More I Buy!”” “Hiding Cash in Tampon Boxes – and Other Sneaky Spots.” “Wimpy Double-Dip Forecasts Could be Wrong,” but “Postal Service to layoff 120,000 jobs (220,000 by 2015)." These are just a few of the jokes that pass for business "news."



Like I said, laughable. And people wonder why their homes are underwater and their retirements are simply worth less if anything at all? The clowns are running the circus – I hope we all know better now, and aren’t giving it all away…