Thursday, February 3, 2011

Morning Update/ Market Thread 2/3

Good Morning,

Equity futures are lower so far this morning, at least until today’s POMO arrives. Speaking of which, Zero Hedge calculated that due to redemptions and POMO that the net effect would be to add approximately $20 Billion in liquidity, JUST TODAY. Yeah, that’s nuts… and it’s producing starvation and bloodshed the world over. Sorry to say, but that’s become America’s greatest export. Yet this morning the dollar is zooming, bonds are resting on support, oil is up slightly, gold is up a little, and food commodities are mostly higher again.

Catastrophic food prices are finally getting attention in the mainstream. They are higher now than when food riots broke out in 2007/ 2008:
World food prices hit record high

London (CNN) -- World food prices rose to an all-time high in January, according to the UN's Food and Agriculture Organization (FAO).

The FAO's Food Price Index measures the cost of a basket of basic food supplies -- sugar, cereals, dairy, oils and fats and meat -- across the globe.

The index rose by 3.4% in January -- the seventh monthly increase in a row -- to its highest level since records began in 1990.

The cost of sugar, cereals, dairy and oils and fats all went up last month, while meat prices remained steady.

FAO economist Abdolreza Abbassian said high prices were likely to persist in the months to come.

Rising commodities costs are one of the major factors behind a growing wave of civil unrest across the Middle East and North Africa.

"High food prices are of major concern especially for low-income food deficit countries that may face problems financing food imports, and for poor households which spend a large share of their income on food," said Abbassian.

Last week at the World Economic Forum in Davos, Switzerland, economist Nouriel Roubini warned that rapidly rising food prices posed a serious threat to global stability.

"What has happened in Tunisia and is happening right now in Egypt, but also the riots in Morocco, Algeria, Pakistan, are related not only to high unemployment rates and to income and wealth inequality, but also to the very sharp rise in food and commodity prices," he told CNN.

Of course they fail to pin the blame where it belongs, namely on the “Fed” and world central bankers. At least they didn’t pin it on the weather as they usually do.

I’ve never pointed this out before, but I have often been disturbed by the trend… Take a look at that article from CNN; every single paragraph is only one sentence! This has become the norm in the mainstream, it’s as if we’ve dumbed everything down to the absolute minimum that the masses can absorb. Apparently it’s just another part of the problem, somewhere in the chain of cause and effect.

That chain has been intentionally obscured, so let me spell it out: Private bankers – Federal Reserve Act giving the power to create and control money to private bankers – IRS created – everything is about self-interest, this turns into a society of salesmen, marketing runs perceptions and the world – rules controlling bankers go away as politicians are bought off and all laws then favor bankers – bankers invest in things that make them money, like war machines, and not in things that help society like education – bankers buy up industry and export it overseas as they have no allegiance – bankers bought up the media and control what you read and see - bankers create inflation to keep their Ponzi scheme going, the exponential math has saturated the world with debt and now they are printing more and more money in an attempt to create inflation which drives their profits while starving those on the bottom.

It’s a difficult trail to see for most people, but the bottom line is that what’s most important is WHO controls the production of money. Yes, it absolutely affects the minds of the masses. Massive distortions of markets and reality, the disinformation begins with the name “Federal Reserve Bank,” where they are not Federal, they don’t possess reserves, and they’re not even a bank. The disinformation runs rampant from there.

Our economic statistics are a huge part of the disinformation. Weekly Jobless claims are being reported for last week at “only” 415,000. This is down from the prior week’s 454k (revised up of course), and is below consensus which was looking for 425k. Here’s Econoday, let’s blame the weather:
A weather-related pile up of claims in the South unwound in the January 29 week which saw initial claims fall a very steep 42,000 to 415,000 (prior week revised 3,000 higher to 457,000). Alabama, Georgia, North Carolina and South Carolina posted some the biggest declines after the four states posted big increases in the prior week due to snow effects. Distortions always put the emphasis on the four-week average which, unfortunately, is signaling trouble for tomorrow's monthly employment report. The four-week average is up 1,000 to 430,500 to show a roughly 15,000 rise from a month ago.

Other data show dip back for continuing claims, down 84,000 to 3.925 million in the January 22 week, with the unemployment rate for insured workers down one tenth to 3.1 percent. Total workers receiving claims fell a little more than 112,000 to 9.29 million in lagging data for the January 15 week.

This week's very severe weather is certain to distort next week's claims data. But next week's report will be, by comparison, no more than a curiosity compared to tomorrow's release of the January employment report. Markets showed no significant reaction to today's results.

Wild swings in the data is a warning sign that the data is being tampered. I’ve seen this occur in other data, like the MBA statistics, and once it gets too wild the trend is to obscure so that you can’t see what’s going on behind the numbers and you certainly can’t reproduce them. This is why transparency is so important, it’s a paramount step in obtaining checks and balances. The “Fed” being the worst example of the lack of checks and balances on the planet.

Nonfarm Productivity supposedly rose by 2.6% in the 4th quarter. This is another statistic that has shown very large growth over the past few years, and yet it is completely FALSE. This is because productivity is not measured in the number of widgets produced, it is measured in dollars – and man, do we ever know how to produce dollars!

Yet those dollars are not making it into the hands of the workers, as we already know. Labor Costs FELL .6%! What’s that tell you about other statistics that show wages increasing? They are indeed false, nothing but a lie.
Businesses are still keeping a rein on labor costs, resulting in productivity gains. Nonfarm business productivity rose an annualized 2.6 percent in the fourth quarter after gaining 2.4 percent in the prior quarter. The consensus had forecast a 2.0 percent advance. This gain in productivity reflects increases of 4.5 percent annualized in output in the nonfarm business sector and 1.8 percent in hours worked. Unit labor costs edged down an annualized 0.6 percent in the fourth quarter, following a dip of 0.1 percent in the third quarter. The market median forecast was for no change in labor costs.

Year-ago productivity numbers are weighed down by weakness in output in mid-2010 and the dropping of robust numbers in late 2009/early 2010 in the calculation. Year-on-year, productivity was up 1.7 percent in the fourth quarter-down from 2.6 percent in the third quarter. Year-ago unit labor costs lost ground with an annualized minus 0.2 percent from minus 1.1 percent in the prior period.

The economy continues to improve in terms of output as businesses through the fourth quarter made the most of the workers already on payrolls. At some point, however, businesses will have to boost hours and hiring to grow.

“Lies, Damn Lies, and Statistics…”

The field of economics is so full of bullshit I’m surprised that most economic “experts” can even see their watches to keep track of time. What we really have is money pumping and no wage increase. Where’s all that money going? How about the markets and overseas? Distortion piled upon distortion.

Factory Orders and the non-Manufacturing ISM will be released at 10 Eastern this morning – I can’t wait to see more economic statistics measured in something as pliable as the dollar!

The Egyptian riots sure turned violent at the flip of a switch. All the despots who profit from control are happy to incite violence into that situation as the last thing they want is a peaceful revolution that makes taking back control by the people look as easy as just showing up! Revolution has never been that easy, countries with freedoms are free because their people had to fight for it! Like anything else in life, when freedom is taken for granted, you will fail to appreciate it and can lose it.

The violence created in Cairo is a good lesson in what happens when peaceful people gather for important change. They are infiltrated with agent provocateurs – this comes right out of the Despot/ CIA handbook on revolution put downs, item number five, I believe.

Hey, let’s talk about what’s left of the “markets.” Historic sized divergences that have gone on for months and months and continue to grow. Yesterday the Transports sank like a stone despite an Industrial Index that was higher. The small caps in the Russell 2000 are also still in a downtrend. The market is telling us that all is not right – as readers here are well aware.

Risk is everywhere. If you wanted to create a breeding ground for Black Swans, I don’t think a person could do a better job if they tried. Disinformation, accounting fraud, insolvency, massive distortions, lies and deceit are everywhere.

Yes, it’s coming to a head sooner than later.