Thursday, January 13, 2011

Morning Update/ Market Thread 1/13

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson, (Attributed)

Good Morning,

Equity futures are slightly lower this morning with the dollar plunging, bonds lower, oil and gold roughly flat.

Regarding Obama’s speech last night, my thought is that talk is not only cheap, but when facing the harsh reality of bad math, rhetoric that fails to address the math is counter-productive and is exactly what leads to those “other” events. It is action, not happy rhetoric that matters when facing tangible threats. Bring on the deeds, otherwise zip it. Americans are being robbed of their money, of their property, of their food, of their liberty. We need a leader with GUTS to stand up to the banks – let me know when you’re ready.

Weekly Jobless Claims rose from 409,000 to 445,000, a 36,000 one week increase. Consensus was looking for a decrease to only 405k. This huge miss and increase back into the 450k zone throws tons of cold water on the massaged numbers that came out over the holiday weeks. Yet, in a delusional haze, the Labor Department and Econoday say that the “special factors” are in this report… Large doses of Thorazine, Stat!
In data blurred by special factors, initial claims surged to 445,000 in the January 8 for the worst result since October. The week-to-week rise, at 35,000, is the largest since July (prior week revised 1,000 higher to 410,000). The four-week average offers the best handle on the data, up 5,500 to 416,500 which is still nearly 10,000 lower than the month-ago comparison, a comparison that does hint at improvement for monthly payrolls.

Now the special factors. The Labor Department believes the week's surge reflects administrative backlog built up during the shortened weeks of the holidays. They also note that many claimants postponed filing until the New Year, a move that will increase their benefits.

Continuing claims fell a very steep 248,000 to 3.879 million in data for the January 1 week. There's no explanation offered for this change. The unemployment rate for insured workers fell two tenths to 3.1 percent.

One week's data is only one week's data and in this case very hazy data. Nevertheless this report, however skewed, will awaken talk of unexpected deterioration in the jobs market. Next week's report will be unusually important.

Remember, job destruction is occurring with any number above 350k. Unadjusted claims rose by a whopping 191,686! The headline number for this same week in 2010, one year ago, was 470k… that’s a decrease of only 25,000 following trillions more thrown at the banks. Trillions that could have been used to clear out our debt saturated condition that would have led to real job production, not just trumped up numbers and a trumped up phony “market.” If you ask me, forget about the fluoride in the water, what we really need as a population are anti-psychotics to help us with our economic mass-psychosis!

Psychosis is the only way I can explain jubilation at running a nearly $40 billion a month trade deficit:
We got a nice surprise on the trade front despite the recent run up in oil prices. The overall U.S. trade deficit in November shrank slightly to $38.3 billion from a revised $38.4 billion gap the month before (original estimate of $38.7 billion). The November deficit was much less negative than market expectations for a $41.0 billion shortfall. A combination of factors led to the improvement. Exports rose 0.8 percent, following a 3.0 percent jump in October. Imports rebounded a modest 0.6 percent after declining 0.8 percent in October.

The narrowing of the trade deficit was primarily in the nonpetroleum goods gap which eased to $30.3 billion from $30.8 billion in October. The services surplus also edged higher. The petroleum differential widened to $20.1 billion from $18.9 billion the month before.

By end-use categories, the increase in goods exports was led by a $1.0 billion gain in consumer goods with foods, feeds & beverages up $0.6 billion. Also rising were capital goods. The automotive category dipped $0.6 billion.

The rebound in goods imports was led by a $1.9 billion boost in industrial supplies-largely oil imports. Foods, feeds & beverages rose $0.2 billion while capital goods rebounded $1.0 billion. Imports of autos and consumer goods declined $0.4 billion and $0.9 billion, respectively.

Today's report is good news for manufacturers which are seeing continued gains in exports. We are likely to see economists nudge up their estimate for fourth quarter GDP due to the favorable trade numbers for December.

There was little initial market reaction. Partially offsetting the good news on trade was an unexpected jump in initial jobless claims.

Horrid is how I would describe a situation in which sales measured in falling and worth less dollars are falling, and in which the cost of oil is rising. This is the worst of all words, brought to you courtesy of the narcissistic bastards pulling the strings at the “Fed.” Again, the rhetoric is NEEDED, and it is needed to get on point fast as food riots break out over the globe and real people DIE! Riots are now happening in Argentina with deaths occurring over gasoline riots. Think that can’t happen here? Think again, they are coming unless we reel the banksters in.

The PPI numbers are rising and are simply too high already. Any inflation whatsoever is completely unsustainable over time, yet the “Fed” profits from it so they treat it as if it is good and try to create it. It’s not good, it’s destructive. REAL growth is fine when kept under control, but PRICE growth through constant monetary expansion only leads to massive problems and the eventual destruction of confidence in the money system. Lucky us, we’re going to live through the destruction and change of our current system, not to mention the “other events” that history says accompany such upheaval:
The Fed may be in a quandary soon if not already. While core inflation is still tame, headline inflation is running higher than expected. And unemployment is not coming down as hoped. But focusing on today's inflation numbers, the overall PPI inflation rate remained on the hot side in December with a 1.1 percent boost after jumping 0.8 percent in November. The December boost topped the consensus forecast for a 0.9 percent increase. At the core level, the PPI rate slowed to 0.2 percent a 0.3 percent rebound the prior month. Analysts expected a 0.2 percent rise.

By components, food prices gained 0.8 percent, after a 1.0 percent jump in November. The energy component continued a strong upward trend, surging 3.7 percent in December after rising 2.1 percent the prior month. Within energy, gasoline spiked 6.4 percent after jumping 4.7 percent in November. The core was kept somewhat soft in part by a 0.4 percent decline in prices for passenger cars.

For the overall PPI, the year-on-year rate increased to 4.1 percent from 3.5 percent in November (seasonally adjusted). The core rate firmed to 1.4 percent from 1.3 the prior month. On a not seasonally adjusted basis for December, the year-ago the headline PPI was up 4.0 percent while the core was up 1.3 percent.

There was little market reaction. Also out at the same time, initial unemployment claims unexpectedly jumped while the international trade deficit was smaller than forecast. Today's PPI numbers will heat up the debate at the Fed during the end of month FOMC meeting as inflation pressures are rising while unemployment remains high. And it is not just energy that is a concern as food prices are being pressured by higher commodities prices.

That’s right, high inflation and high unemployment – welcome to debt saturation and money printing which is the exact wrong way to handle the saturation problem.

So, everyone’s convinced that we’ll soon see QE3 followed shortly thereafter by QE10! Really? Are we going to be QEing and POMOing when the CPI passes 10%? What happens to the “market” when that stops?

I’m not saying it’s going to stop, I’m saying that the idiots still have choices – sure, they can create high or hyper-inflation if they so choose or even by accident, but this will be devastating to our population, to our economy, and to businesses in the longer run. You simply cannot get out of an impossible math situation by ignoring it! Not talking about it WON’T WORK!

So, wave 5 up is going to run headlong into tough decisions. In the meantime we continue to POMO more than $100 billion a month. Is the economy getting better? If the honest answer is yes, then they better pull the support. But we know the truth… it’s all fluff. Pull the support and the “market” goes boom. Thus we are now damned if we do and we are damned if we don’t – a position brought to you by WHO controls the production of YOUR money! Want it not to happen to your kids and future generations? Change that one part of the equation and get our nation out of the business of paying private individuals for the use of our own money. That means NO MORE NATIONAL DEBT!

And if you think that the Jefferson quote at the top of this update is hype, consider the ongoing destruction of our money and the current price of gold which the majority thought was crazy talk just a few short years ago – inflation! While at the same time property values continue to deflate and honest hard working citizens continue to lose their jobs and their homes! Yes, their property is being stolen by the banks who made money from absolutely nothing and are repossessing properties by the millions – properties that if they did not control the production of money they would have no legal claim to! The money system and the property of the United States belongs to its people, not to a few private individual bankers!

Here are the sickening statistics for 2010 foreclosures:
1 million homes repossessed in 2010

NEW YORK (CNNMoney) -- Foreclosures were at a record high in 2010, and more than 1 million people lost their homes, even as notices started leveling off during the end year.

In total, there were nearly 2.9 million foreclosure notices filed during the year, according to report released Thursday by RealtyTrac. That was a record high, but just 1.7% above 2009.

It most certainly would have been higher had notices not plunged in November and December as banks halted tens of thousands of foreclosures in the face of the robo-signing scandal.

"Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity," said James Saccacio, RealtyTrac's CEO. "Many of the foreclosure proceedings that were stopped in late 2010 -- which we estimate may be as high as a quarter million -- will likely be re-started and add to [foreclosure] numbers in early 2011."

That’s one million families just in the past year that lost their homes! And, there were nearly three times as many families who were put into the foreclosure process! Think about the STRESS that puts on those families! It’s a wonder, a miracle to me, that there is not far more violence occurring. It is the LACK OF REAL AND MEANINGFUL RHETORIC that’s to blame. We are one screwed up country and we are still in deep denial.