Tuesday, March 8, 2011

Morning Update/ Market Thread 3/8

Good Morning,

Equity futures are flat just prior to the open this morning. The dollar is substantially higher and has returned to back inside of key support. Bonds are flat, oil is higher after being lower overnight, gold and silver are higher, while the rotation at least temporarily allows food commodities to soften.

The NFIB Small Business Index rose from 94.1 to 94.5. Econoday says that it shows “recovery is taking hold,” lol, based on that tremendous .4 rise in an index that is still well in negative territory below the even 100 mark. Sales are still reported as weak, and only 5% of companies plan on future hiring. The negatives in this report far outweigh any positives, and it comes just as oil is doing a moonshot – how will that affect next month’s sentiment? Here is the entire report – while most of it is off the bottom, it is certainly not positive:

NFIB March

Consumer Credit was reported yesterday for January. Coming in at an annualized rate of only $5.0 Billion, that is down from December’s $6.1 Billion. If you remove student loans, this number would have been negative. If you remove the $25 Billion of government Non-Revolving credit included in this report, it would have been hugely negative. There was a large split between Revolving and Non-Revolving Credit, Revolving credit being negative and Non-Revolving positive.

Now let’s compare the creation of Consumer Credit to what our own government is creating outside of the Consumer Credit report. The Congressional Budget Office yesterday announced that the Federal Government’s deficit for the month of February was the largest EVER, at $223 billion! That’s nearly a quarter TRILLION dollars in just one month! It is four times the amount of savings being proposed by the Republicans, and 30 times the saving proposed by the Democrats in their “budget talks.” Talk about exponential growth and impossible math, this is it.

...And that's what they admit to. The part they're hiding with accounting fraud is even larger.

And note that while Consumer Credit growth is “only” $5 billion at an annualized rate, the February deficit is $2.7 TRILLION at the same annualized rate! LOL, and people are still fantasizing about getting our deficits under control? Arguing about what to cut? Arguing about left vs. right? Laughable.

Want something to laugh at? How about nickels that will no longer contain any nickel because our money has been debased so much that the nickel is worth more than a nickel? A penny, even with minimum copper has cost more than a penny to make for quite some time. And now we learn that dollar bills have cotton in them, and that the cost to print paper money at the Mint jumped 50% in the past year, LOL, due to the fact that cotton jumped to a fresh 140 year high! It now costs the mint 9.6 cents to print a one dollar bill! At this rate of debasement, it won’t be long before it costs them more than a dollar to print a paper dollar!

And yet the “Fed” has the balls to talk about low inflation. What a joke. Their own policies have risen their own cost to print paper money by 50% in just one year. And that was before this year’s parabolic rise in commodity prices.

And in just the first four days of March, the Treasury has had to draw down $81.6 Billion of its “cash” in order to not exceed the debt ceiling before they said they would! That’s more than $20 billion per day! And it leaves the government with only $108 billion left TOTAL. Oh yeah, they will raise the debt ceiling and crank up the presses, you bet – they have to. And the exponential rise in the figures will continue to expand until the people are distracted with those pesky “other events” that will surely plunge the world into chaos. The chaos will be engineered to distract you from WHO created and profited from the bad math. No, I don’t mean the politicians – I mean the central bankers who created the government debt framework and who profit from the creation of money. Money that rightfully should only be created to the benefit of all the people, as our money system belongs to all of us, not a few individuals.

The market internals are weakening while at the same time the indices have managed to hold above their 50 day moving averages. There are several indicators that have deteriorated from the last time we were at this level, which is simply an extension of the negative divergences that have been in place for months and months now. It is money printing, plain and simple, that has held the market up so far, but with oil and other commodities now residing in outer-space, it’s only a matter of time before the façade crumbles - this market, and our economy, is already gone.