Wednesday, October 19, 2011

Morning Update/ Market Thread 10/19 - Walk of Life is Getting on Target Edition…

Good Morning,

What used to be the somewhat free equity markets are drifting higher again this morning following yesterday afternoon’s run up on European rumor mongering – something about 2 Trillion Euro injection, LOL, as if creating more money from nothing to indebt the people of Europe will do anything positive for, oh, about 99% of the population… oh sure, that 1% who create it will be living high on the hog on the backs of the labor of the other 99%. Hey, I think I’m getting into the swing of this “Occupy” thing!

Meanwhile the dollar is melting to pay for the manipulation, bonds are lower too, oil is higher because Goldman Sachs says so, gold & silver are just waiting for their moment to shine, while food commodities continue to choke the life out of those living on the margins – those who live furthest from the production of money.

The hypocritical and morally bankrupt Mortgage Broker’s Association says that Purchase Applications fell last week by 8.8%, and that Refinancing activity also fell by a whopping (and unbelievable) 16.6%! Econodream incorrectly hints that the Columbus Day Holliday is to blame, but the MBA manipulates their data in a myriad of ways, one of which is to make adjustments for holiday weeks, so I’m not buying their excuses, not that I believe any part of an MBA release, I simply don’t as they are nothing but spin masters cranking out manure to fit their own very special interests:
In the Columbus Day shortened week of October 14, application activity for home mortgages fell a very steep 14.9 percent. The headline's two components show a 16.6 percent drop for refinancing applications and an 8.8 percent drop for purchase applications. The federal holiday is one likely factor behind the decline as is a rise in interest rates with the average 30-year loan up eight basis points to 4.25 percent.

Note that rates on the long end are already rising as the effects of the “Twist” manipulation are already waning.

CPI data came in hot once again despite their hedonistic adjustments:
Headline inflation for the consumer remained on the warm side while core inflation softened. The consumer price index in September increase 0.3 percent, following a 0.4 percent jump the month before. The latest number matched the consensus forecast. Excluding food and energy, the CPI posted a mild 0.1 percent boost after rising 0.2 percent in August. The market expectation was for a 0.2 percent gain.

Turning to major components, energy increased a strong 2.0 percent after rising 1.2 percent in August. Gasoline spurted 2.9 percent higher after increasing 1.9 percent in August. Food price inflation continued hot, rising 0.4 percent in September after accelerating to a 0.5 percent pace the month before.

Within the core, apparel declined 1.1 percent after a series of strong gains. Recreation dipped 0.1 percent. Used vehicles fell 0.6 percent while new vehicles were flat. Also, shelter cost inflation slowed to a 0.1 percent rise after two moderately strong gains.

Year-on-year, overall CPI inflation rose to 3.9 percent from 3.8 percent (seasonally adjusted) in August. The core rate held steady at 2.0 percent on a year-ago basis. On an unadjusted year-ago basis, the headline number was up 3.9 percent in September and the core was up 2.0 percent.

Today's report was more encouraging than yesterday's PPI report. However, energy and food components are remaining stubbornly strong despite softening in the core. The September CPI report will not encourage the inflation hawks within the Fed to back down.

Oh poor babies, inflation too hot for a “Fed” wonk to handle? How will they ever justify printing trillions more? I know, they can create “Primary Dealers” out of the big Canadian Banks in order to make sure every last Canadian is debt saturated, and they can also feed the Europeans trillions that they can never afford to pay back so that they can stake their claim to the productive efforts of the European people too (insert eye roll here).

Of course John Williams at ShadowStats also calls B.S., he tracks inflation and says that the CPI is actually running closer to 12%!

Even if you look at the “Fed’s” own trumped up CPI data, the rate of inflation they’ve worked hard to create means that it’s impossible to get ahead, save for retirement, and now eat for millions of workers – again, the further from the production of money you are, the harder this hits you. Just look at the following chart, take a look at the year you were born, or the year that you began to work and see how much their index has risen since then – for me it has risen nearly eight fold! And that’s the trumped up data!

Housing Starts came in higher than expected, but still at extremely depressed levels. Note that here, too, they are having problems knowing what’s real and what’s not because of the way they calculate the data:
September housing data appears in part to be coming off hurricane effects in August as starts jumped and permits eased back. But strength also appears to be more broad based than this effect. Housing starts in September rebounded a sharp 15.0 percent after declining 7.0 percent the month before. The September annualized pace of 0.658 million units topped the consensus forecast for 0.590 million units and is up 10.2 percent on a year-ago basis. The comeback in September was led by a monthly 51.3 percent surge in the multifamily component, following a 16.8 percent drop in August. The single-family component edged up 1.7 percent after a 2.8 percent decrease the month before.

By region, the jump in starts was led by an 18.1 percent increase in the West. Other regions also gained with Northeast up 12.7 percent; the Midwest up 9.3 percent; and the South up 15.7 percent. Only the increases in the Northeast and South were partially related to rebounding from hurricane effects in August.

Housing permits edged slipped 5.0 percent after rebounding 4.0 percent in August. The September rate of 0.594 million units annualized came in lower than analysts' projection for 0.620 million. Permits in September are up 5.7 percent on a year-ago basis.

The September starts report shows new housing activity to be stronger than expected. The big question is whether the demand exists to absorb added supply. Yesterday's modest improvement in the NAHB housing market index suggests that there could be some lift coming in new home sales. But home builders are not getting too optimistic as indicated by pullback in housing permits. At this point, caution is still a good idea.

Now let’s get on point. I watched two excellent and on point videos yesterday, the first is of Bill Black talking to Dillon Ratigan:

Bill Black is a key player – he is THE human being on this planet who needs to be the first person leading the resurrection of a proper rule of law! We need to PROSECUTE THE FRAUD, and restore a proper rule-of-law.

The second video is with Chris Hedges in New York at the OWS protest. Chris is right on point, good to see people who get it and can verbalize it well:

The protests are for real, they are on target, yet real solutions elude them – in regards to solutions I think I’m once again way ahead of the pack. And I strongly dispute those who say that we ALL have to “take the pain.” No we don’t!

It’s very possible to have the purveyors of FRAUD take the pain while simultaneously breaking the debt saturated bonds that hold the 99% back. That’s what Freedom’s Vision is all about, it returns the power to the people! What power is it that they seek? The power to create money on behalf of humanity instead of on behalf of a few self-privileged individuals – it is possible, keep up the protests, sweep those in power out, and when you want to know how to create a proper rule of law and proper monetary system, the correct answers are available here.

You are witnessing the progression of humanity in action – it’s the walk of life…