Thursday, May 5, 2011

Morning Update/ Market Thread 5/5 - Storylines & Swindlers Edition…

Good Morning,

Boy, do I have a storyline for you!

Equity futures are diving this morning on more bad data, the dollar is strengthening, the Yen is strengthening into the tsunami territory before the massive manipulation, bonds are higher, oil is significantly lower, gold is working its way back towards $1,500 an ounce, silver is still under attack now with a historic 5 margin increases in the past 8 days, and most food commodities are correcting as well.

With commodities sky high and the cost of living soaring, we knew that it was only a matter of time before that pressure took its toll on America’s citizens. Yet the economic disinformation flow is still conflicting itself, just like the zombie who stumbles around not really realizing that he’s already soulless.

For example, we have the idiotic “Monster” report rising from 136 to 145. As if their index numbers have any tie to reality... here’s Econoshill pretending that they do, only to contradict their spin in the very next release of pretend economic data:
In what the report says is evidence that the labor market is improving, Monster's measurement of online-recruiting volume jumped 12 points in April to 145. Gains are wide including strong acceleration in labor demand from the mining, retail and construction industries.

But like a White House Osama Bin Laden Press Conference, the storyline is changing far more often than you change underwear.

Next comes the Weekly Jobless Claims where we see a sharp rise from the already stratospheric 429,000, all the way up to 474,000! And here I didn’t think there were still that many people employed? To call this a miss on expectations would be the understatement of the year so far. So, let’s explain away this 4th weekly report that’s well above the 400k mark, here’s Econoexplainaway:
The government cites special factors behind a 43,000 surge in initial jobless claims. The biggest factor is an adjustment timing for a spring break in New York state followed by a new emergency benefit plan in Oregon. The third factor is the auto sector where claims related to retooling increased. Note that possible layoffs tied to Japanese supply disruptions remain an uncertainty for the outlook.

Initial claims came in at 474,000 in the April 30 week for an astounding contrast with expectations of 410,000 (prior week revised slightly upward to 431,000). The four-week average jumped 22,250 to 431,250 which shows a nearly 40,000 increase from a month ago.

Special factors or not, headline levels are startling especially ahead of tomorrow's monthly employment report where expectations were already weakening. Stocks are on the decline in reaction to the data.

Yep, amazing how different this storyline is.

And speaking of fantastical storylines, let’s take a look at just released Productivity and Costs. Productivity increased by a supposed 1.6% in Q1, this is down from the supposed 2.6% jump calculated in Q4 of last year. Meanwhile Unit Labor Costs increased by a supposed 1.0% which respectively follows a .6% reduction the quarter prior. Here’s Econospin trying to wrap its arms around decelerating numbers:
The sluggish first quarter is showing up not just in soft GDP but also slower productivity and higher unit labor costs. Nonfarm business productivity rose an annualized 1.6 percent in the first quarter after advancing 2.9 percent in the previous quarter. Analysts had forecast a 1.5 percent rise for the latest quarter. The growth in productivity reflected an output gain of 3.1 percent in the nonfarm business sector, down from a 4.4 percent boost in the prior quarter. Hours worked increased an annualized 1.4 percent after a 1.5 percent rise in the fourth quarter. Unit labor costs worsened to a 1.0 percent increase from a 1.0 percent decline in the fourth quarter. The market median forecast was for a 0.8 percent rise.

A positive for the consumer, earnings are starting to improve although adding to businesses' labor costs. Compensation advanced an annualized 2.6 percent, following a 1.9 percent rise in the fourth quarter.

Year-on-year, productivity was up 1.3 percent in the first quarter-down from 2.0 percent in the fourth quarter. Year-ago unit labor costs posted at up 1.2 percent in the first quarter, compared to a decline of 0.2 percent in the previous quarter.

With demand, output, and productivity soft in the first quarter, firms have less incentive to hire until demand strengthens. And it is showing up in today's surge in initial unemployment claims. While the productivity report was about as expected, markets are negatively reacting to the jump in claims. However, the BLS indicates special factors came into play.

Clear as mud? Let me help… Productivity numbers are calculated from the rise in GDP. Since GDP is measured in devaluing dollars, the more money that’s printed, the more “Productive” America appears. Get it? If not, let me show you a chart of your “Productivity:”

Yep, that’s the monetary base, aka “hot money” supply. Yes, America is productive all right… we produce copious amounts of money, financial engineering, and storylines. Real products and services? Not so much.

And just look at the wonderful effect all that money creation has on the multiplier:

So, we have debt saturation. We have a financial crisis that is met with lower rates and more debt creation. Then, when that doesn’t work, it is met with massive (and I do mean massive) money printing. And now, obviously that’s not working either. So obviously the solution to our still debt saturated economy, debt saturated government, and still insolvent banking system is QE3, right?

Hey, I know, let’s raise margin requirements on silver, that’ll fix everything.

Look – I know this is hard to swallow for most people in America, but you are being conditioned with completely FALSE information. The paradigm that you think is real in your mind, isn’t really real – it’s a storyline that’s been planted there all your life. The truth is that this “economic data” isn’t real. The markets are not real.

“Economists” don’t know anything. The knowledge that economists have comes from a false storyline that is perpetuated in the schools that are financed by the central banks. These schools now have literally billions of funny money dollars inside their endowments, yet they do not use that money to promote real education – they use it to create still more funny money and to generate fees for the fund managers, and for the banks that own the exchanges, create the money from nothing, and then create leveraged derivatives from nothing. All the while collecting and generating more funny money that is siphoned off every step of the way.

And these huge endowments, derivatives, fees, and financial engineering benefit society how?

Get this – the average college student now spends more than $900 per year just on books. Books that cost like $120 each.

Why do college books cost that much? I say because they have a monopoly and because they are greedy and because their institutions are not really about learning, they are about promoting the storyline. Got it?

So, back in March the Universities got together and decided to sue for selling the same books at discounts to their rip off prices – you know, as if $78 for a book is a good deal.

It’s hard, because when you start to see the storyline for what it is, then your perspective on the world changes. Get too far outside of the established storyline, and heaven forbid that you point out the storyline to others, then you are labeled a “whack job,” a word that I heard on the television from the media at least ten times yesterday.

This is very troubling for a society. There is this happy façade on the outside, but as the storyline diverges further and further from reality there is underlying tension that builds. I’m sorry, but I can’t help but think the way I’m currently feeling must be similar to how aware Germans felt in the early 1930’s. Does saying that make me a whack job? If so, then I think we all need to examine the storylines running around in our noggins.

And since we’re crossing the Rubicon of storylines and whack jobs, I might as well wade into alternative storylines (aka the truth) a little bit further for those who are capable of making storyline adjustments along the path of their lives… Just remember, once you swallow the red pill, you cannot unswallow it.

Again – let me state this clearly. The President of the United States last week presented a highly manipulated document for his birth certificate. It was manipulated in so many ways that it’s not even funny. Since these manipulations have been brought up, those who simply cannot fathom that their storyline is not real have attacked those who point it out as whack jobs. They have tried to “debunk” the manipulations and to explain them away. Yet each time they do, their “debunking” gets debunked by someone who knows better (here’s just one example, I’ll call it Debunking the debunking).

Now, regardless of the technical details, what cannot be argued is that this document was manipulated by a computer in many different ways. Can we agree on that? I think that is an established fact, and I think stating it that way is being KIND to those who did the manipulation. In my storyline, I call it a fake, but then I can accept facts for what they are. If, however, in your mind your storyline cannot accept that fact, then I think you may be able to help yourself edge closer to reality by asking WHY this document was manipulated? Even if it was manipulated with the very best of intentions why did it require so much manipulation? And since it is so obvious that it was manipulated, why would the President of the United States present it in the manner that it was?

Next question – is manipulating that document legal? Next question – are we even going to officially look into it, or is the given storyline good enough for you?

Sorry, but I prefer to operate in reality, and not in some fantasy.

Let me ask everyone this: If you knew someone who you KNEW was a liar and a known cheat… someone who you KNEW disseminated FALSE INFORMATION, and who you KNOW manipulates and controls the flow of information around them, WOULD YOU give them your life’s savings to invest for your retirement?

Do you know where I’m heading with this? Does it make you uncomfortable that I’m heading in that direction? Where is your retirement money right now?

Do you want me to spell out the lies, the disinformation, the manipulation to you? Do I have to? Or, do you know what I’m talking about? If you follow my blog regularly then you do, I’m sure. But if you follow my blog and you still have money in these markets, then I’m going to refer you back to the question above – Would you give your life’s savings to a known SWINDLER to manage for your retirement?

Why are we even discussing these “markets?”

Yep, that’s where my storyline has taken me. But I’m a naturally inquisitive type, I’m not happy just letting others feed me their storyline.

So, next I want to go way off the deep end… waaaayyyy down the rabbit hole… and I want to question the storyline coming from the White House regarding Osama Bin Laden.

What are the FACTS as we know them? Hmmm… well, I’m having a difficult time with that because what I see are not facts, but instead a storyline. Just yesterday in the White House Press conference the spokesman had to read from a printed script and then when asked about “the changing storyline,” was forced to admit that he’s “having trouble keeping it straight himself!”

Folks, because there is a giant void of facts, this subject has now become an emotional subject that is very similar to RELIGION! Either you believe the storyline or you don’t. Because there are very few facts, it is now a storyline based upon FAITH.

What I want to do is point out all the pieces of the storyline that have changed. But I don’t want to spend two days writing that article! So, instead, let’s talk about the parts of the storyline that HASN’T changed…


Okay, well, that was fun.

Here’s the thing. When I tell you a story about something that happened to me – I mean something that REALLY happened – then the story flows out uninterrupted and each time I tell it it’s the same. Oh, and if something seems too unbelievable to be true, then I’m going to absolutely present facts to back it up least you think I’m a nut job.

So, when I hear that a body was dumped in the ocean, I get suspicious. When I’m told there are pictures, but then they are not presented, I get suspicious. When I’m told that Senators have seen those pictures, but then that is retracted when in fact no Senator has seen them, then I get even more suspicious. When I’m told that there were helmet cameras on the Navy Seals that document the whole thing, only to learn later that THE prime 25 minutes doesn’t exist, then my mind flashes to the Watergate tapes and the gaps that just happened to appear at critical times there. Remember that?

I can go on and on about the changing story line, but I refuse to spend my life’s energy refuting the true nut jobs who call into question those with unanswered questions.

To me, very little of this storyline has what I'd call "the ring of truth" to it. If you have an open mind, the following two articles have something that I'd call a storyline that does have more of the ring of truth to it – not that I believe all or even any of it – I don’t know what to believe because I have been presented with no tangible facts: First - Did Senior Military/Intelligence Officials Overrule President Obama Regarding Mission to Kill Osama Bin Laden?: Second - White House Insider: Obama Hesitated – Panetta Issued Order to Kill Osama Bin Laden

Even that storyline makes a lot of assumption that I don’t know for a fact are real – that’s what a lack of true transparency creates.

So, if your storyline conflicts with mine, then all I can say is “I’m Okay, You’re Okay,” now go and take another Prozac, you’ve got financial engineering to do – I’m going to go do something real with my life’s energy.