Thursday, December 1, 2011

Morning Update/ Market Thread 12/1 - Acts of Desperation Edition…

Good Morning,

Stocks are slightly down to about even after yesterday’s ridiculous money bomb. The dollar is lower, bonds are lower, oil is slightly higher, gold & silver slightly lower, and food commodities are slightly higher.

What happened yesterday was most definitely a desperate act designed to keep the impossible math from collapsing in upon itself. Debt saturation has completely brought the European financial system to a stand still. There is no “solution” in Europe within the central banker’s false paradigm, and thus the United States central bankers took it upon themselves to issue massive quantities more of money to lend to the European banks – just what they need, more debt.

To me it’s literally insane - both the actions of the central banks, and of the people for allowing them to continue destroying currencies, economies, and lives. It’s a black eye for humanity, and it will accomplish exactly nothing in the end. In fact, more debt only makes the debt saturated condition worse, it is certainly no cure. Witness the fact that on the same day this “liquidity” pump sent equities soaring, yields in the Eurozone also rose.

Remember how I called B.S. to the “Black Friday” hype? Hype it was, here is all Econocomplicit could muster to describe chain store sales for November:
Today's chain-store results do not confirm the enormous strength of anecdotal reports for the Black Friday weekend. Almost as many chains are posting softer results for November than they did for October with most reporting little difference. Following their November results, chains are holding to guidance which on the whole point to steady rates of moderate year-on-year growth through the holidays.

Can you believe the hype in the media and in the markets? Compare that to this. Is the media even reporting this? Wow, are we a dumb money fluff society or what.

I have a pretty good nose to sniff out bullshit, and I’m stating for the record that much of the recent supposedly good economic data has that odor of manipulation about it. The markets certainly are manipulated, all of them, none are real.

Watch the VIX today, it is currently below the bottom Bollinger band. If it closes here then a market sell signal will be set up for the future.

For those that didn’t see it, a sitting Congressman, Dennis Kucinich, created a video clearly stating the criminality of the “Fed.” Yes, Congress has the power to end this problem immediately – they have the power granted to them by the Constitution to end it. Will they? I don’t think so – too many are corrupted by their money from nothing:

The “Needs Bill,” while not as complete nor as correct as Freedom’s Vision, would represent a huge step in the right direction, but it will take millions of people demanding something like that for it to happen. My instinct is telling me that the coming massive “other events” have to play out first – sadly. Still, this video is remarkable in that we now have a few sitting Congressmen openly calling out the "Fed" as the root cause of the problem.

Initial Jobless Claims are once again over 400k, but it is the 350k mark that delineates the point below which real jobs are created. Numbers above that reflect an economy that is still shedding jobs:
The shortened Thanksgiving November 26 week clouds a 6,000 rise in initial jobless claims to 402,000. This ends three straight weeks under 400,000 and compares with Econoday expectations for 391,000 and against a 396,000 level in the prior week (revised from 393,000). The four-week average, which helps smooth out distortions in any one week, shows its first increase in five weeks, up a marginal 500 to 395,750 (prior week revised to 395,250).

Continuing claims in data for the November 19 week rose 35,000 to 3.740 million which is the highest level in two months. The four-week average is up 12,000 to 3.683 million. The unemployment rate for insured workers, resting at 2.9 percent in the prior five weeks, is up one tenth to 3.0 percent.

The Labor Department reports no special factors in the latest data but the shortened week for the initial claims period is likely to blunt market reaction. Demand for the safety of Treasuries is increasing very slightly immediately following the data.

Along the lines of bullshit, remember I am also calling it to the recent huge jump in Consumer Confidence. And not but a couple days later an independent source, the Bloomberg Consumer Comfort Index, shows deterioration in Consumer Comfort. Did Consumer Confidence really jump, or was it a manufactured statistic? I say it was manufactured:
Consumer confidence in the U.S. was little changed last week from levels typically reached during past recessions. The Bloomberg Consumer Comfort Index was minus 50.2 in the period ended November 27, after minus 50.1 the prior week. The gauge has been at minus 50 or worse for 10 of the past 11 weeks.

Two of the three components of the weekly comfort index deteriorated. The measure of Americans' views of the current state of the economy worsened to minus 88.5 last week from minus 87.2 in the prior period. The buying climate index fell to minus 49.4 from minus 48.8. The gauge of personal finances improved to minus 12.7, from minus 14.3.

The simultaneous injection of global liquidity (money), combined with the manufacturing of false statistics, and with the manufacturing of retail sales media hype, leads me to believe that a full court press was ordered to accomplish some political purpose (elections upcoming). While the President doesn’t control the “Fed” (it is the other way around), the central bankers may like their easily manipulated teleprompter reading empty suit puppet, and thus are working to keep him there. Yes, that is conspiracy theory for now, but the pieces of facts are pointing me in that direction.

The Manufacturing ISM rose for November. This was expected by me since it counts the dollar value of orders placed and Boeing received huge orders last month. Again, it is a point of national embarrassment that our manufacturing base is so small that a few aircraft orders swings these reports – of course you won’t hear that from Econocheerleader:
ISM new orders are turning higher in what is very good news for the manufacturing sector. The new orders index for November is up a very strong 4.3 points to 56.7, above 50 to indicate monthly growth and well above October. This index had been stuck at slightly sub-50 levels in prior months which now are forgotten. Helped by new orders, the ISM composite index is up 1.2 points to a 52.7 level that compares with the Econoday consensus for 51.5. November's level is the best since June.

Details show acceleration for export orders and for production. Delivery times are little changed while input prices slipped for a second month. Backlog orders are going down which is a negative that will hopefully be offset by the rise in new orders. Another disappointment is employment where hiring slowed, here too a factor that will hopefully reverse. Inventory readings are stable.

The stock market is getting a lift from today's report which hints at building strength and renewed leadership in manufacturing.

Renewed leadership in manufacturing? Wow, the manure is getting deep.

Construction Spending rose .8% in October, from my perspective just another measure of inflation as this is another metric measured in dollars. Just picture that chart of M1 and its parabolic rise, and you will see right through this statistic:
It may not be a lot (coming from a low base) but it is starting to look like the construction sector is incrementally adding to overall economic growth. Construction spending in October advanced 0.8 percent after rising an unrevised 0.2 percent in September. Analysts had forecast a 0.3 percent boost for October.

The October increase was led by a 3.4 percent boost in private residential outlays, following a 0.6 percent rise in September. Private nonresidential construction spending also posted a gain, rising 1.3 percent, following a 0.1 percent dip the month before. Public outlays declined 1.8 percent after a 0.3 percent increase the prior month.

On a year-ago basis, overall construction outlays improved to down 0.4 percent in October from down 0.6 percent in September.

Construction outlays have risen three months in a row and in six of the last seven months. The level of activity is still subdued but it now appears to be growing and adding to overall economic growth. It is not an "engine" like manufacturing but it is in better shape than even less than a year ago.

Year over year figures are down while money production figures are way higher. That means that in real terms Construction is WAY down.

I, Nathan Martin, no longer consent to the lies.