Saturday, April 16, 2011

On Point Video with Matt Taibbi...

"Justice Department Has No Appetite To Take ANY Cases Against Wall Street Executives"

The following video is an excellent short discussion touching on the behavior of the investments banks. Why are banks allowed to play in, own, and become the markets in the first place? That is the fundamental question, and it has to do with WHO it is that produces the money in this country - as do all the other issues they point out.

The markets, the regulators, and the politicians = complete and total capture.

Something else to keep in mind is that when we say "investment bank," we are also talking about the "FED," as the investments banks are the Primary Dealers who literally OWN the "Federal Reserve Banks" in a disinformation campaign signed into "law" in the year 1913.

Friday, April 15, 2011

Weekend Open Thread...

Morning Update/ Market Thread 4/15 – Not Tax Day Edition…

Good Morning,

Just as a reminder, tax day this year does not fall on the 15th, it is this Monday, the 18th. Another note, today is also options expiration.

Equity futures are higher this morning after another magical bounce yesterday afternoon. Bonds are higher, however, while the dollar continues to sink and sink. Oil is flat, but gold and silver are both going on to new highs after huge jumps yesterday. What do you think that says about all the deficit reduction talk?

The CPI came in the same for the month of March as February, rising .5% (6% annualized, but trumped to the max, of course). Here’s Econospin riding the “core” is okay train:
Today's CPI report is a tale of two cities-headline is hot while the core is subdued. The consumer price index in March posted a 0.5 percent hike, matching the increase in February and meeting expectations. Excluding food and energy, the CPI eased to 0.1 percent, following a 0.2 percent rise and coming in below analysts' forecast for 0.2 percent.

By major components, energy jumped 3.5 percent after surging 3.4 percent in February. Gasoline increased 5.6 percent, following a 4.7 percent hike in February. Food price inflation worsened to a 0.8 percent gain, following a 0.6 percent boost in February.

The core was softened by a 0.5 percent decline in apparel prices, a 0.1 percent dip in household furnishings, a flat recreation component, and shelter rising only 0.1 percent. On the upside, notable gains were seen in new & used vehicles, up 0.8 percent, and public transportation, up 1.3 percent largely on airline fares.

Year-on-year, overall CPI inflation worsened to 2.7 (seasonally adjusted) from 2.2 percent in February. The core rate rose to 1.2 percent from 1.1 percent on a year-ago basis. On an unadjusted year-ago basis, the headline number was up 2.7 percent in March while the core was up 1.2 percent.

Today's report provides a policy quandary for the Fed or at least a public relations bump in the road if some FOMC participants want to keep arguing that all that matters is the core. If that is the case, perhaps consumers should go out and rebuild their wardrobe instead of eating and driving. The bottom line is that this report raises the debate about what counts in making monetary policy.
It is interesting that core is lagging so much. To me this is just another indication of debt saturation, where the consumer is maxed – thus prices of commodities rocket on hot money, but none of that money makes it into consumer hands so manufacturers are not able to pass that cost through easily. As soon as costs rise, like for oil, then demand destruction occurs, and down goes the American standard of living. Works great for the central bank, sucks huge rocks if you are living on a fixed income or a declining one. I guarantee you that if the “Fed” continues to pump that the turmoil throughout the world will gain pace.

The Empire Manufacturing Index rose from 17.5 to 21.7. This is a survey of manufacturers in the New York region conducted by the “Fed.” Since they are in control of this non tangible report, I question the results, but will pass along the spin:
Manufacturing activity in the Empire State region is robust and shows no substantial effect from Japan. New orders surged in the April report as did shipments and, yes, even employment. A look at the supply chain shows no lengthening in delivery times. In a special question, 80 percent of the sample report little or no impact from the crisis in Japan.

The news isn't all good given further acceleration in prices including strong acceleration in prices received in what is an indication of cost pass through. But this report is very positive. Next data on the manufacturing sector will be included in this morning's industrial production report for March at 9:15 a.m. ET.
Industrial Production figures also rose giving some credence to the Empire State Report:
The manufacturing sector continues to fuel the recovery. Overall industrial production in March jumped 0.8 percent, following a revised 0.1 percent uptick the month before (originally unchanged). Analysts had forecast a 0.6 percent increase. Importantly, manufacturing continued a string of healthy gains, advancing 0.7 percent, following a 0.6 percent boost in February. A jump in auto production helped but other manufacturing components also were positive. For other sectors, utilities rebounded 1.7 percent after dropping 3.6 percent in February. Mining gained 0.6 percent in March after a 0.3 percent rise the month before.

Within manufacturing, durables advanced 1.0 percent in March, and gains were widespread across its major categories. The output of motor vehicles and parts rose 3.0 percent, following an increase of 4.6 percent in February. Excluding autos, manufacturing rose 0.6 percent in March after a 0.3 percent gain the month before. Also in durables, sizable gains in output also were recorded in the following industries: wood products, fabricated metal products, nonmetallic mineral products, and aerospace and miscellaneous transportation equipment.

Nondurables manufacturing rose 0.5 percent in March. Leading the boost were chemicals and paper.

On a year-on-year basis, overall industrial production posted at 5.9 percent-up from 5.6 percent in February.

Overall capacity utilization in March expanded to 77.4 percent from 76.9 percent in February. The March rate came in higher than the market forecast for 77.3 percent.

The manufacturing sector remains robust in March and April is also likely to be a healthy month according to a strengthened Empire State manufacturing report earlier this morning.

The traditional non-NAICS numbers for industrial production may differ marginally from the NAICS basis figures.
The Capacity Utilization figure is just sick. Numbers below the mid-eighty percentile show that we have much capacity that is going unutilized, and this comes after years of continuous manufacturing contraction. You would expect this number to rise sharply with a real recovery, and it simply isn’t.

The April Treasury International Capital (TIC) report came out showing a positive net inflow of $97.7 billion, mostly from “private” sources. I call complete bull on these figures knowing that the only way that type of money was flowing into the U.S. is if the “Fed” was first funneling freshly minted money out. Again, this and other reports from the Treasury are not to be trusted anymore in my opinion. They and the “Fed” are working too closely together and are failing to allow proper audits of their activities. No, I don’t trust them as far as I can throw them, and neither should you – if they had nothing to hide then a full audit would not be a problem.

“Consumer” Sentiment also magically rose despite $4 gasoline. It went from a gutter level 67.5 reading to a curb reading of a whopping 69.6. This reading is far below historical norms.

Every day that more fluff is added to the markets and to commodities is just more misallocation that will come out later. I’m working from my little laptop this morning, so will end this here and wish you a good weekend.

Thursday, April 14, 2011

Morning Update/ Market Thread 4/14 - Only a Matter of Time Edition…

Good Morning,

Equity futures are lower this morning as the dollar swings wildly lower, then higher. Bonds are just heading higher to safe ground, oil is down, but gold and silver are higher, and food commodities are going lower.

What could be sparking the swings in the dollar? Try this:
BRICS agree to use local currencies for mutual credit

Member countries of the BRICS forum have agreed to establish mutual credit lines in their own currencies, skipping the existing exchange medium of the dollar.

Development banks of Brazil, Russia, India, China and South Africa today signed a framework agreement to establish mutual credit lines denominated in their own currencies.

"The agreement is aimed at strengthening financial cooperation between partner banks and support financial institutions and companies seeking to enter BRICS markets," the bank said in a statement.

While local currency credit lines may have limited role and are more symbolic in nature, BRICS said the long-term prospect of the dollar as the dominant currency for international trade is a cause of worry.

It is a little bit more than symbolic when countries actually move to subvert using the dollar in international trade. It is a significant step in the loss of power and influence the United States has in the world, as we have mismanaged our reserve status and will ultimately pay the price for that mismanagement.

Keep in mind that the dollar index is a phony measurement – the “Fed” banks manipulate the hell out of our own currency and it is being measured against the other worst actors in the world in regards to manipulation. Free markets is the last thing that dollar dominance has brought the world. Sure, the dollar has fallen a long way, and if we are entering another deleveraging leg the dollar may mechanically rise for a time, but structurally the dollar is underpinned by impossible math.

So now both the left and the right puppets are giving lip service to tackling the bad math. Hey, at least they finally both agree that the math is bad – yet they fail to acknowledge just how impossible it is. Note that Obama’s multi-year plan to save $4 trillion from the DEFICIT does not mean that he is getting in the neighborhood of actually paying back the current DEBT. When you are running $1.5 trillion deficits each year, then “SAVING” $4 trillion over 12 years is only shaving $333 billion per year from our current situation, but still adds $1.2 trillion per year in debt, which means that 12 years from now our national debt will have doubled! LOL, and that’s a wildly optimistic number as we are on an impossible exponentially expanding climb straight up debt mountain, even with interest rates at zero!

And that makes all this tough talk just bullshit. The people will suffer and suffer until they change out WHO controls the production of money in this nation.

Oh, look, I think I see some people suffering now as the weekly Jobless Claims number shoots back above the psychologically important 400k number, but is just another marker as job losses have yet to stop unlike the media and politicians are portraying. This week’s number came in at 412,000, up from 382k, and only 32,000 higher than expected. Here’s Econospin:
Initial unemployment claims jumped 27,000 in the April 9 week to a much higher-than-expected total of 412,000 and the first plus 400,000 reading since early March (April 2 week revised 3,000 higher to 385,000). The Labor Department said effects tied to the beginning of a quarter may be behind the rise. Supply disruptions tied to Japan were not cited. The four-week average rose 5,500 to 395,750 for its highest reading since mid March.

In other data, continuing claims in data for the April 2 week fell 58,000 to 3.680 million. The unemployment rate for insured workers slipped one tenth to 2.9 percent.

Markets are showing no significant reaction despite the possibility that today's report could be the first signal of trouble for April payrolls.

Yeah, and $110 oil wasn’t cited either, nor was printing money to the moon and giving to bankers instead debt saturated zombie “consumers.” Trouble for the upcoming jobs report? On clue to that number comes from Washington State where our unemployment rate just “unexpectedly” ticked up a tenth.

The PPI rose .7% in March, down from the extreme 1.6% reading in February. This is still a very high reading (8.4% annualized) which I believe is far from the actual inflation experienced – the Import and Export numbers are closer. Still, as you read Econospin sweating the numbers, keep in mind that indeed oil and food rocketed higher, but they were still shooting higher through much of March. PPI numbers lead Consumer Prices, and those will be reported tomorrow:
Producer price inflation at the headline level in March remains under heightened upward pressure from higher oil costs. Meanwhile the core was bumped up but not to the same degree. Overall PPI inflation in March eased but came in at a still hot 0.7 percent after surging 1.6 percent in February. The boost in March came in lower than analysts' forecast for a 1.0 percent increase. Energy led the latest gain while food edged back from a huge surge in February. At the core level, the PPI firmed to a 0.3 percent rise, following a 0.2 percent advance in February.

By components, food prices edged back 0.2 percent after surging 3.9 percent in February. Energy continued upward, jumping 2.6 percent, following a 3.3 percent jump in February. About 80 percent of the boost in energy came from a 5.7 percent spike in gasoline, following a 3.7 percent increase in February. Heating oil rose 2.7 percent in the latest month.

The biggest culprits in the core acceleration were light motor trucks and passenger cars, which rose 0.7 percent and 0.9 percent, respectively. Not surprisingly, the category of jewelry, platinum & karat gold jumped 3.7 percent in March, following a 4.6 percent increase the prior month.

For the overall PPI, the year-on-year rate in March posted at 5.7 percent, compared to 5.8 percent in February (seasonally adjusted). The core rate rose to 2.0 percent from 1.9 percent the prior month. On a not seasonally adjusted basis for March, the year-ago the headline PPI was up 5.8 percent while the core was up 1.9 percent.

This morning's dual release of the PPI and jobless claims may be presenting a difficult policy decision for the Fed. Producer price inflation remains strong while initial claims unexpectedly rose. While some within the Fed continue to say that the impact of higher oil prices is transitory, not all agree. And the job market may not be improving as much as believed. Tough decisions are ahead for the Fed.

First mention I’ve heard from Econoday regarding the “Fed’s” corner they have backed themselves into.

Don’t bee fooled by all the deficit reduction talk – while it may produce another wave of deflation, the impossible math insures that in the end it is inflation that will kill the confidence in our money. That said, the more deflation that comes now, the longer it will be before the end game plays out. If deflation is not allowed to play out, then we are in the throws of the end game now – which frankly would not surprise.

You know there’s a ton of stuff going on and I can’t address it all, but it’s all important nonetheless. Like the sham agreement with the banks to keep their illegal fantasy MERS game going, or the 27% plunge in Chinese new home prices in just the past month, or how new fancy hotels in Bahrain are only 5% occupied demonstrating that you can build temples of wealth, but if you do not build a solid base beginning with the rule of law that those temples will be meaningless, or worse, they will drain productivity from your society – something that is happening big time in the United States. And over in Europe games with the PIIGS continue. Iceland voters told the bankers to stuff it, good on them. Now Finland has a vote to say no to bailing out Portugal – terrific! The people of the world need to continue to rise up to the bankers – that is the only way to escape the impossible math.

The impossible math of debt and the intertwining of special interest money and politics absolutely played a huge role in the Japanese nuclear disaster. That aspect of their crisis was NOT a natural disaster, it was absolutely man-made. Again, subverting the natural rule-of-law eventually results in getting spanked by nature. And now Japanese officials are admitting that they knew this was as bad as Chernobyl from the start – but they kept quiet because, “If we immediately decided to label the situation as Level 7, we could have triggered a panicked reaction.”

Um, pardon me, but if a Mack truck is about to run you over, then the flight response is absolutely critical – and very appropriate – in order to avoid becoming road kill. This admission is a confidence destroyer and you should be wondering what else it is that officials (both here and there) are not telling you in their effort to not trigger “a panicked reaction?”

I would politely suggest that you do panic and that you take steps to protect your health – something I’ve been saying all along. You should have stocked up on food and water produced pre mid-March, but now you may consider drinking less milk, eating fewer leafy vegetables, avoiding seafood (from both the gulf and Pacific), and you may want to consider a reverse osmosis filter for water consumed at home, particularly if you live on the West Coast, and particularly if you are pregnant or have an infant at home. No, the radiation won’t kill you today if you consume it, but it may cause problems for you later – and I remind you again that the radiation is still coming, that they are failing to do the right things to contain it.

And now we are finally starting to hear from some experts about the potential harm in Japan – try the possibility of 400,000 cancers from it there, how’s that sound? It sounds far worse than the horrific tsunami to me…

Here’s Arnie Gunderson’s latest interview… and why is it that these types of conversations are only happening on alternative media? You should think long and hard about that one…

As I watch three RIDICULOUS wars by America, thousands and thousands killed… and as I see and empathize for the real suffering that hundreds of millions of debt saturated people, losing their homes, losing their jobs, or just experience the degradation of the middle-class squeeze (all due to complete central banker capture)…

Then I watch the mainstream media scream and make big noises about air traffic controllers – working inappropriately by themselves and at all hours of the night during extreme conditions from mostly bore you to death, all the way to one arm multi-tasking paper hanger busy – who fall asleep on the job, and then the uproar is about the people being put at risk! LOL, JUST TAKE A LOOK AROUND YOU AT THE PEOPLE BEING PUT AT RISK.

And then DO YOUR JOB! Instead of being just another corporate captured consumer zombie reporter.

And while the central bankers and politicians put the entire world at jeopardy, while our PRESIDENT is giving a speech about “fixing” the impossible math – there’s our Vice-President snoring away!

Yes, it does strike me as a little bit more than ironic in that the budget pressures that put a single controller in the tower to begin with are treated with such complacency by our politicians, by our mainstream media, and of course by the bankers who brought you the impossible math in the first place.

Meanwhile the markets produce a small Head & Shoulders pattern over the past couple of days and are now playing that pattern out to just above the SPX 1,300 level. Oh yeah, the markets are complete fluff - the Fukushima nuclear disaster is good analogy – built upon a faulty and corrupted base, it is only a matter of time…

Wednesday, April 13, 2011

Morning Update/ Market Thread 4/13 - Never Ending Fantasy Edition...

Good Morning,

Equity futures are bouncing this morning, with the dollar lower, bonds lower, oil higher after bouncing off Goldman’s $105 manipulation… errr target price, gold and silver are higher, and food commodities are slightly higher after falling the past couple of days.

JPMorgan managed to “beat” estimates, doing so by marking their goliath “portfolio” to fantasy and by taking smaller loan loss reserves, particularly on credit cards. Without the reduced charge offs, earnings would have been a large miss. The truth is that JPM is 100% insolvent the day they are forced to mark their “assets” to market.

Many, including myself, are crediting “Fed” manipulation and money printing for running markets up, but don’t forget that mark-to-fantasy accounting rules are just as big a part of the illusion and no one is talking about them anymore.

By the way - why do we allow banks to even participate in speculating in equity and commodity markets? Is there really a need for that? Oh yeah, I almost forgot that the markets are all about them, owned by them, manipulated by them - and they can because they're the ones producing the money and getting the rules written for their benefit. Silly me, I almost forgot.

The still conflicted and morally bankrupt Mortgage Banker’s Association reported Purchase Applications fell 4.7% in the prior week, and the Refinance Index fell 7.7%, bringing their overall fantasy down 6.7%. Here’s Econotrip:

Highlights Purchase applications for mortgages fell back 4.7 percent in the April 8 week to only partially reverse a 6.7 percent jump in the prior week. On refinancing, the Mortgage Bankers Association which produces the report has been warning that rates have moved too high to attract much interest from creditworthy borrowers. Refinance applications fell 7.7 percent in the week to a two-month low. April may be getting off to a slow start but purchase applications did move higher in prior weeks signaling improvement for March home sales data.
Okay, I have to admit that I don’t think I can keep reporting on such drivel from such obvious shills.

Speaking of shills, Retail Sales – one of the most inaccurate reports due to measurement in dollars and survival bias – rose by “only” .4% in March, this is below Feburary’s 1.0%, and is also less than expectations. I say “only” because although at an annualized rate that’s a whopping 4.8% of unsustainable growth, but it PALES in comparison to yesterday’s import price growth of 2.7% (annualized 32.4%, and compounded for a year is over 37%!). So, retail sales not only fail to correct for stores gone out of business, but in this case they lagged import inflation by 2.3%! Thus, the reality is that retail sales are FALLING, and they are falling dramatically in real terms. Here’s Econoshill for your daily dose of rationalizing and “consumer” conditioning:

Highlights As expected, retail sales in March posted a strong gain on higher gasoline sales, helping to offset weakness in auto sales. But spending was reasonably healthy overall outside these two components. Overall retail sales advanced 0.4 percent, following a revised 1.1 percent gain in February and a revised 0.8 percent increase in January. The March boost fell short of the median market forecast for a 0.5 percent rise. Excluding autos, sales gained 0.8 percent, following a 1.1 percent increase in February. Analysts had called for a 0.7 percent boost. February increases for headline and core were originally estimated at 1.0 percent and 0.7 percent, respectively. But spending is holding up overall.

Importantly, sales excluding autos and gasoline in March advanced 0.6 percent, following a 0.9 percent increase in February. Some of components that are strong include furniture & home furnishings (3.6 percent), building materials (2.2 percent), electronics & appliance stores (2.1 percent), clothing (0.6 percent), general merchandise (0.4 percent), and food services & drinking places (1.0 percent).

Overall retail sales on a year-ago basis in March slipped to 7.1 percent from 9.1 percent the prior month. Excluding motor vehicles, sales were up a year-ago 6.5 percent, following 6.8 percent in February.

While the headline number came in below expectations, it also was strong. And even after discounting higher gasoline prices, spending is healthy. The cost of filling up at the gas station may be cutting into discretionary income-but not yet spending. While there is talk of a more moderate GDP number for the first quarter, it is not because of the consumer.
Speaking of fantasy… Ummm, okay… I think I know what that light at the end of that tunnel is.

Business Inventories will be reported at 10 Eastern, and the criminals’ “beige book” (ever wonder where they keep their real “books?”) will be released this afternoon.

The headline on the front page of my local newspaper reads, “An "alarming" number of students are Homeless.” Our “wealthy” small town, it seems, has seen the number of homeless children skyrocket 400% in the past 3 years. The children tracked are in temporary quarters, “living in motels, cars, camp grounds, trailer parks, multi-family housing, and foster kids in temporary placement.

My first reaction to the article was that I had no idea it was rising that quickly, and of course if anyone would expect that, it would be me – but still, it’s hard to swallow. My second thought quickly swung once again to that famous quote:

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
- Thomas Jefferson – attributed
Yep, very sad. Oh, and if the middle-class wasn’t getting squeezed enough, this just in from the Washington State Senate:

Wash. Senate budget cuts teacher pay by 3 percent
The headline says it all. Doesn’t sound like much, but a couple hundred bucks a month out of pocket into the face of skyrocketing costs is exactly what the continued destruction of the middle-class is all about.

Is there any wonder that the teachers have a union? Further, can you really blame them for wanting their wages to keep up with that inflation? In fact, the VOTERS passed legislation in Washington state a few years ago that ties their wages to measured inflation, as trumped up as those measurements are. The state actually followed the voter’s mandate for about two years, but then promptly froze wages anyway, and now they’re going backwards. Oh yeah, it’s all the union’s fault. But heck, they’re just teaching homeless children anyway, right?

Meanwhile the phony left blames the phony right, and they argue about austerity and debt limits – boxed in by the central banker bond market paradigm and a money system that is designed to work for them, and not for the people who rightly own this nation’s right to produce money. Very few are willing to talk about the interest payable to private bankers – but here’s a guy who is:

And he’s using the government’s own trumped up numbers. The truth is that we already pay out ALL the taxes we collect just to pay interest on the national debt. I say that because all the QE and other stimulus money are basically an attempt to artificially buy down interest rates. And when that money is combined with the already outrageous direct interest expense, then you will find that ALL of your federal taxes are being funneled to the private banks and ALL real government activity is turning into more DEBT – or is devaluing the value of your money as they print.

THAT is the elephant in the room, it is a product of WHO benefits from and controls the production of our money.

The amount of disinformation surrounding the nuclear catastrophe in Japan in amazing. Yes, it’s worse than Chernobyl and it has the potential to be far, far worse and they are doing exactly the wrong things in order to keep it from being worse. The Japanese Prime Minister finally admitted that it might be “ten or twenty years” before it would be safe for people to return to the evacuated zone. LOL, they are talking ten years just to get the fuel cool enough to manage. The reality is that heavy particles with half-lives in the thousands of years are now spread across that land. It will likely be centuries before that land is inhabitable again – government and corporate officials are doing the slow, slow walk towards reality, but they are doing almost nothing to prevent it from spreading even further – in fact their actions are causing it to spread further.

Those who are making the claim that these reactors are different than Chernobyl and that they have better safe guards are ignoring the fact that just as much radiation (or more in reality) has already escaped and that there is 24 TIMES, yes 24 times, as much nuclear fuel at risk in Fukushima as there was at Chernobyl - The Amount of Radioactive Fuel at Fukushima DWARFS Chernobyl.

And we are going to dilly dally about upping our standards and improving facilities here in the U.S.? Are we sane?

And to those who claim that the “small” amounts detected in the U.S. are safe – I say come on over and let’s shuck back some of the local food and we’ll wash it down with plenty of milk. No amount of radiation in our food supply is good, and those who proclaim otherwise are simply sick and conflicted.

The economy, financial company earnings, and markets… pure fantasy.

Tuesday, April 12, 2011

Morning Update/ Market Thread 4/12 - Presidential Fantasy, Day 2 Edition

Good Morning,

Equity futures are solidly lower this morning with the dollar falling dramatically, bonds rising, oil continuing down a little, gold and silver are up, and food commodities are mixed.

The Small Business Optimism Index fell sharply in April, the survey showing higher costs, inventory building, and the largest component of the loss is falling earnings – here’s econospin looking for the nonexistent bright spot, but admitting it's another recessionary print:
Optimism among small businesses fell back in March, down more than 2-1/2 points to a recessionary 91.9. Data from the National Federation of Independent Business show weaker sales and a weaker outlook for business conditions. The report also cites a "marked deterioration" in profit trends. But there is a bright spot as small businesses are hiring and expect to continue to hire.

And here’s the entire report, one of the better reports being produced:

Small Business Economic Trends April 2010

The International Trade deficit narrowed just slightly in February (yeah, two months ago). Coming in at $-45.8 Billion, this is slightly less than January’s $-46.3 Billion, and is more than the consensus that was looking for $-44 Billion. Anyway you want to slice it, we are importing more than we export and have for years. That means that money is, and has been, draining out of this country for years. Since all money is DEBT, we must produce DEBT in order to pay for it. And what do the private bankers do who produce this debt? Why they sell it, of course, in one of the greatest wealth transfer/ criminal enterprises ever created – the mob are pikers compared to these guys. True, just printing money to cover the trade deficit is stealing, but at least it would be stealing without interest payments on top that are payable to private individuals who do nothing and perform no real function for that wealth transfer. Anyway, it’s a mess because of the way we falsely let the bankers indebt our nation. You won’t hear that from those who are living inside of the Central Banker Box, like Econoshill here:
The nation's trade gap narrowed moderately in February, to $45.8 billion from January's $47.0 bln (revised from $46.3 billion). Despite the decline, February's gap is still on the high end of trend. The petroleum goods gap narrowed to $25.8 billion from $26.9 billion in January.

Food imports and imports of consumer goods both rose and are at records. Imports of capital goods dipped as and did auto imports. Auto imports may become a big issue as the Japanese supplier issue unfolds. Imports in total fell $3.6 billion in the month.

Exports were also lower, down $2.4 billion. The export side shows declines for autos, industrial supplies and, despite a jump in civilian aircraft, a decline for capital goods exports. The decline in capital goods activity in this report points to slowing for business investment.

Today's data are for February which is even more ancient history than March. Oil at $110 is 30 percent more expensive than it was in February, a factor that will deepen the trade deficit. One factor that could narrow the trade gap is an unwanted one, that is supply disruption tied to Japan.

The trade deficit in 2007 ran more than $60 billion per month – that gives you some idea of the slow down in commerce since then, but remember that this is measured in dollars and thus the decline in activity is even larger in reality.

Gee, are we surprised to see Import prices rising 2.7% in March? I’m not. That’s 32.4% annualized inflation – are you getting nervous yet? Yep, the year over year import figure rose 9.7%! And exports rose 9.5%! Think we have any monetary inflation there? Imagine what this does to people on a fixed income, it decimates them. Here’s Econospin rationalizing the oil component away like it doesn’t exist and like it doesn’t translate into the price of absolutely everything – it does!

Import prices jumped 2.7 percent in March but were heavily skewed by a 10.5 percent surge in prices of petroleum imports. Excluding petroleum, import prices rose 0.3 percent, a step down from the prior four months which saw a 0.9 percent peak in January. The year-on-year rate for total import prices is definitely picking up steam, back near the double digits at a plus 9.7 percent rate in March.

Export prices are also on the rise, up 1.5 percent and at the high end of trend. The year-on-year rate is also nearing the double digits, at plus 9.5 percent. Here food inflation is at work with agricultural prices up 2.3 percent in the month.

Inflation in today's report is definitely hot but it's confined to energy and food. Today's data point to high non-core readings for Thursday's producer price report and possibly Friday's report on consumer prices as well.

Hot, hot, hot – hard for the “Fed” to say with a straight face that inflation is low… I know, but “it’s just transitory,” LOL. Remember that price stability mandate? How are they lookin’?

Speaking of the “Fed” creating higher prices and price instability, they release their latest hot money POMO schedule later this afternoon – Oooo, I can’t wait to see how badly they are going to debauch my money.

Things in Fukushima are just ugly. Yet another earthquake yesterday temporarily knocked power out to the plants. More people are catching up to the dangers of the radiation that’s spreading around the globe. Just three gallons of milk from that tested in Hawaii is enough to give the maximum allowable annual dose of radiation to an adult! And it is being found all over. The latest, seaweed samples from right here in Puget Sound are now testing positive for radioactive iodine, “shocking” the experts who didn’t believe it would make it here. Hey, if you have an infant or pregnant female close to you, I would encourage them to cut out the milk for awhile – as just one step of self-preservation.

It’s just sickening that our President is silent on this issue – he is nothing but a completely empty suit. Oh boy, we’re going to cut $80 billion from our budget! And I’m going to pee into the Pacific Ocean – same result. Impossible math, while they distract you with nonsense, POMO you to death, and ignore very real and very legitimate health concerns.

The holographic markets? They’re looking pretty weak – the NDX and Transports have been way underperforming and are now dragging the NDX and S&P below the 50dma. If they want to cool off that inflation, they’ll have to let some air out of the markets.

All this talk about really reforming entitlements? I call B.S. – it won’t happen because the math is impossible and it will be political suicide to actually be the one to take the super-sized ax that’s needed to them. No, the impossible math will continue all the way to collapse, just remember that it won’t be a straight line, there will be waves between here and there.

But guess what? Once you begin to think outside of the Central Banker’s box, then real solutions to the impossible math begin to appear. And this brings me to day 2 of my FANTASY Presidential rule. Remember that on day 1, we did the following:

Act 1 – Declare National Emergency giving the President temporary powers to override Congress and to revise/ eliminate current legislation.

Act 2 – Give the Japanese government 24 hours to remove TEPCO from control of Fukushima and to bring in outside experts whose purpose is nuclear containment, or risk having America move in and take it over.

Act 3 – Dissolve the Federal Reserve Bank, removing their corporate charter and placing all their assets into receivership.

Act 4 – Place all banks (and corporations that act like banks) into temporary receivership. During the transition they are to conduct business as usual, however, no new corporations can be created or merged, all bank assets are to be cataloged effective today, and nothing but straight pay will be allowed to any bank executive or employee. All banks and financial institutions will be run through a special one time bankruptcy.

Act 5 – Close all markets for a two week period to give time to get the entire restructuring plan known and digested – after that time, markets will open without limits – crash or fly to the moon, they will settle down eventually. Yes, a drastic shift of wealth, power, and control is going to take place.

Act 6 - Reinstate usury limits to be effective immediately.


Act 7 – Follow through on ensuring that the Japanese are working in full court press mode to contain radiation on site – provide all the expertise, support, and tools necessary to make it happen. Begin nationwide testing of food and water for nuclear contamination. Begin a nationwide education campaign regarding the REAL long term health effects of nuclear radiation. Appoint Arnie Gunderson to head the new nuclear reorganization, education, and safety initiative.

Act 8 – Appoint Bill Black to head a new accounting and fraud division. Give him orders to find, jail, and prosecute financial criminals as high up the chain as possible. Have him take over the FASB and implement meaningful new accounting standards, and make them extremely difficult to circumvent or to change.

Act 9 – Begin implementation of the remaining provisions of “Freedom’s Vision.” But re-evaluate the amount of money to be given to each individual, eyeing a much larger number. Appoint John Williams to head the reorganization effort that will consolidate and revamp the reporting of ALL economic statistics. The effects will be to cleanse out a large percentage of the debt and derivatives, and to create a new monetary system that targets Zero percent overall price inflation. This is a complex process, made that way due to the false trail and diversionary tactics of the “Fed,” but will be a more simple process in the end with no more national debt. I would appoint a team to begin its implementation and I would look for the team to have both the power and responsibility to get it done and to make adjustments as it is implemented. In the end there would be no more national debt, but banking would look and feel the same, although banking institutions would be solvent and would not be overleveraged and could not get overleveraged again. This would result in a mix of credit and sovereign dollars. A prime result would be the separation of special interest money from politics.

Another aspect that Freedom's Vision doesn't address is the capture and monopoly of the market exchanges - this would also be dealt with appropriately, say adios to HFT trading and ALL INSIDER advance knowledge.

It is possible to crank Freedom’s Vision up a notch and to impose term limits. It’s even possible to eliminate the IRS and taxes – something that could be looked at only after eliminating the “Fed.” This would NOT eliminate government, but it would eliminate taxes as an accounting tool, which is all they really are (other than a method to redistribute wealth [to the wealthy]). But that’s probably pressing what most people can handle for now, so we’ll see how day 3 in fantasy office goes. I don’t think I’ll need much longer as Freedom’s Vision pretty much puts a lid on the criminal behavior. But what needs attention and focus following all that is to create a positive, productive, and stable vision for the future. I’ll talk about that on my fantasy President Day 3.

Monday, April 11, 2011

Morning Update/ Market Thread 4/11 - Presidential Fantasy, Day 1 Edition

Good Morning,

Equity markets are flat this morning, with the dollar slightly higher, bonds lower, oil lower but holding above $112 a barrel, gold is down a little, silver is setting new highs still, and food commodities are mixed.

There is no economic data today, but Alcoa kicks off earnings season by reporting today. The rest of the week brings PPI, CPI, International Trade numbers, Industrial Production, and “Consumer” Sentiment.

The chart of last week belongs to this comparison of SPX price versus share volume. If volume confirms price, then the markets are in deep doodoo:

Then again, as long as money printing continues and the market is captured by the "FED" and their minions, then technical analysis may be mute as the market price is simply their holographic illusion.

Then again, McHugh has a theory that their manipulation is predestined - that they were meant to play their money printing part in order to complete the very large and long term technical patterns in play - as he now sees this giant expanding megaphone top in the Dow Industrials and also sees similar long term topping patterns in the other indices as well:

All I will say in this regard is that to Sigmund Freud everything was rooted in sex... to a surgeon all your ills can be surgically removed, and to the pharmaceutical company every ailment can be cured by taking a pill. To a technician it is all a part of the technicals. To me it is an illusion of a free market that's actually owned by those who wrongfully stole the ability to produce money - and thus it is corrupt. You will have to decide from your own perspective what the truth is, the future from my perspective is known in that the tide of power is going to shift and it's likely to be a violent affair in the end.

Yet another large aftershock has struck Japan near the Fukushima nuclear plant and rendered the plants without power again temporarily. The situation there is beyond bad, it is a nightmare that is anything but under control. TEPCO is finally admitting that containment is breached in reactor 1 as it is failing to hold pressure as nitrogen is pumped in. The truth is that the first 3 reactors all experienced core melt and that corium (a mixture of fuel, rods, and other metals) is sitting at the bottom of the reactors in a mess that makes it impossible to cool. The corium is hot and is burning through containment. To give you a visual of what’s happening, here’s Arnie Gunderson once again:

Nuclear engineer Arnie Gundersen demonstrates how Fukushima's fuel rods melted and shattered from Fairewinds Associates

TEPCO is admitting that they do not know what steps to take next and are saying that the reactors are too hot to simply bury in concrete. While that is likely true, they can work to contain the radiation on site by burying them first with a mixture of sand and boron, then burying with concrete. The radioactive water should be run through an earth filter and then buried under the sarcophagus. This process will be hugely expensive, but the longer they take to start, the more contamination occurs in the world’s food supply.

The Japanese government has finally widened the evacuation zone around the plant, something they should have done a long time ago. But the government and TEPCO are far too close, the relationship is incestuous. This produces the inability to act on behalf of the people as the corporation and the politicians are acting in their own self-interests instead of doing the right thing for humanity.

What should happen, and this is a part of what the U.S. President should be demanding, is that TEPCO should be removed from oversight and outside experts brought in and given unlimited resources at their disposal. The fact this is not being demanded by the U.S. shows the extent to which our own politicians are also captured by corporate interests. They would rather watch the food supply be poisoned knowing that the future will bring untold cancers and suffering, than to get on with the process of admitting mistakes and properly containing the radiation.

This situation highlights the failure of government to work on behalf of the people – something I contend began in the year 1913 with the implementation of the criminal “Federal Reserve Act.” It’s criminal because it isn’t “Federal,” they don’t have meaningful reserves, and they aren’t even a bank. They are a private corporation owned by other corporation created for the sole purpose of hiding the trail of money and disguising the fact that Congress was conned and bribed into relinquishing the money creation power over to a few individuals – and since that time progressive capture of government, regulators, and all markets has occurred non-stop and in a methodical progression.

The very function of and concept for the existence of corporations has been turned upside down. Take General Electric for example. They are the last remaining original DOW Industrial, but they, too, in fact failed after going into the money production business and leveraging themselves to infinity on bad debt. They failed, and we bailed them out. Now they don’t even pay taxes and their CEO is appointed by a captured President to help turn around the economy! I’d cry if it weren’t so hilarious.

This is the same company that designed and helped to under-build the reactors in Fukushima. Now, the same private company that is allowed to manufacture money and to use that money to lobby politicians (and doesn’t pay taxes), also owns a very large swath of the media and thus what you are hearing from their media is far different than the reality that you are hearing from me – as I am not conflicted and genuinely worried about our health and about the path of our nation. That worry is far different than GE, the corporation’s worry. They worry about never ending growth, never ending profits.

And thus our government and corporations no longer are working to the benefit of humanity, they are working against humanity.

This brings us to a dire situation in which what most people believe to be an effective political process is not really effective anymore at all – it is meaningless other than as a tool to distract you and to make you think you have some input into the system, which you do not.

The real power in a sovereign nation is in the power to control the production of money… that power MUST reside in the people’s hands in order for their vote to have any meaning. If it does not, then those who create the money will use it to override and to rule over the people – and that is exactly what has happened in this nation and to the world.

It is now impossible for the people to straighten out the situation through the ballot box.

No, Donald Trump is not the answer to your prayers, he is just another greedy snake oil salesman – you vote for him and I will remind you later that you were warned.

Creating change that can attack the root of the problem and that can change the power of money creation back to the people will require dramatic action – it will require the people to somehow topple government and force the “Fed” to be dissolved. I don’t know how that can happen, but via revolution, world war, or just flat out economic collapse, it will happen, it must happen.

So play along with my Presidential Fantasy, knowing that this is going to ruffle a lot of feathers… But day 1 of the fantasy President is going to be traumatic in the sense that I believe our government is so broken that the current process cannot produce positive results that change government enough to remove the private special interest money from the process. Thus, as radical as this may sound, on day one of my fantasy Presidency I am declaring a national emergency and will be exercising extreme powers in order to right the political process, root out the greed and corruption, and then to lead a smooth transition back to a true Republic where the people’s productive efforts work for them and where the nation’s sovereign money system works equally for everyone.

Thus I am acknowledging that in order to pull off what I envision as a sustainable and prosperous path for the future that we must first TEMPORARILY swing to a more dictatorial approach in order to effect REAL and meaningful change. This requires TRUST on the people’s part for a period of time, but that would be well defined going in, and limited in duration to a time period of one year – Fantasy I know, but stick with me, I’m simply spelling out what needs to be done over the next few days.

Act 1 – Declare National Emergency giving the President temporary powers to override Congress and to revise/ eliminate current legislation.

Act 2 – Give the Japanese government 24 hours to remove TEPCO from control of Fukushima and to bring in outside experts whose purpose is nuclear containment, or risk having America move in and take it over.

Act 3 – Dissolve the Federal Reserve Bank, removing their corporate charter and placing all their assets into receivership.

Act 4 – Place all banks (and corporations that act like banks) into temporary receivership. During the transition they are to conduct business as usual, however, no new corporations can be created or merged, all bank assets are to be cataloged effective today, and nothing but straight pay will be allowed to any bank executive or employee. All banks and financial institutions will be run through a special one time bankruptcy.

Act 5 – Close all markets for a two week period to give time to get the entire restructuring plan known and digested – after that time, markets will open without limits – crash or fly to the moon, they will settle down eventually. Yes, a drastic shift of wealth, power, and control is going to take place.

Act 6 - Reinstate usury limits to be effective immediately.

That ought to be enough for one morning, I’ll get into more fantasy President detail tomorrow…