Thursday, August 11, 2011

Morning Update/ Market Thread 8/11 – It's the End of The World as We Know it Edition…

Good Morning,

Stocks continue their slide this morning (bouncing as I post this). Note that the trend is for futures to ramp overnight, but in the morning as the volume picks up the selling overwhelms the attempts to levitate the markets. That intervention is SICK, a sure sign that ordinary people have no business “investing” in such a mobster controlled environment. The dollar is higher, bonds are slightly lower after going parabolic the past couple of weeks, gold is also pulling back slightly following its parabolic move and another new record high, silver is flatware, and food commodities have been moving mostly sideways.

The Weekly Unemployment number came in at 395,000, down from last week’s 400k, which was revised higher, of course. While this number is below the psychological 400k mark, it still does not indicate any job growth, in fact just the opposite – any number above 350k indicates a shrinking workforce and it has been YEARS above that figure. An otherwise very vanilla report, here’s Econospin:
Initial jobless claims, for the first time since early April, are under 400,000, at 395,000 in the August 6 week in what is a positive indication of job market improvement. The four-week average of 405,000, down 3,250 in the week, is the lowest since mid April and is down now for the sixth week in a row. A month-ago comparison with early July shows a 13,000 decline in what hints at improvement for the August employment report.

Continuing claims also show improvement, down 60,000 in data for the July 30 week to 3.688 million. The four-week average is down for a third week in a row at 3.719 million. The unemployment rate for insured workers slipped one tenth to 2.9 percent.

The government is not citing any special factors in the data which is a positive surprise given possible distortions tied to summer retooling in the auto sector and to the temporary shutdown of the Federal Aviation Administration. Stocks futures came off lows, but only briefly, following this report which however was accompanied by an unfavorable trade report.

The International Trade Report indicates that both imports and exports are declining and that despite the lower oil prices we continue to import far more than we export. Ross Perot showed us all what would happen with “free” trade, and here’s the giant sucking sound you hear:
Despite help from lower oil, the U.S., trade deficit worsened further in June to $53.1 billion, following the unexpected ballooning of the gap the month before to $50.8 billion (originally $50.2 billion). The June shortfall came in wider than the market median forecast for $48.0 billion. Exports dropped 2.3 percent after slipping 0.5 percent in May. Imports dipped 0.8 percent, following a 2.9 percent jump the prior month.

The jump in the trade deficit was led by the nonpetroleum gap which widened to $36.9 billion from $33.7 billion in May. As expected, the petroleum goods gap narrowed to $29.6 billion from $33.7 billion in May. The services surplus nudged down to $14.5 billion in June from $14.6 billion the month before.

While the economy appears to be getting a boost from lower oil prices, the reversal in exports (hopefully temporary) is an offset.

Gee, I’d like to know exactly how the economy appears to be getting a boost from lower oil prices? What inane baloney. Oil is still above $80 a barrel, and if you go back in time and look, every single time oil rises above that mark, a stock market crash is not far behind. The only reason this one took a while was QE2, but it was QE2 that was responsible for $100+ oil in the first place – so it is just an example of how you cannot print your way to prosperity.

I’ve got a good rant in me about the criminals, but I’ve said it all a million times before, so I’ll let it go for now. The math is impossible, the “market” is 100% not real, and nearly 100% fluff. It's the end of the world as we know it, and I feel fine... because I'm not invested in it, and I got REAL.