Morning Update/ Market Thread 6/7

Good Morning,

Stock futures are higher prior to the open, with the dollar significantly lower, bonds lower, oil slightly lower, gold & silver slightly higher, and food commodities are mixed.

There is no meaningful economic data again this morning, “Consumer” Credit will be released this afternoon.

Yesterday the markets finished with the major indices in an oversold condition below the bottom Bollinger bands, and with zero percent of stocks above their 10 day moving average. That makes a bounce sometime soon fairly likely, but of course we can’t be sure what is on the agenda of those who own the exchanges, own the HFT machines, and produce money from nothing while charging the people interest on that production.

Obama’s Chief Economic Advisor, Austin Goolsbee, resigned today to head back to the classroom. What, a little pressure and he folds like a cheap suit? Yeah, yeah, he did a great job with a bad situation… NOT. Another missed opportunity to the do the right thing, but Goolsbee is just another spineless man who did not possess the courage to operate outside of the central banker captured, yet failed, paradigm.

Their real effect on the economy is summed up in the following (I think) very relevant article that only partially describes the stress placed upon today’s workforce:

Economy makes people sick, literally

NEW YORK (CNNMoney) -- In 2009, the stress caused by the recession sent Katie Pfledderer to the hospital.

Her income as an advertising executive was cut by 20% and her workload increased. To make ends meet, she had to take an additional part-time job, but the strain was more than she could bear.

"I was tired all the time and then one morning I started crying and I couldn't breathe."

Pfledderer suffered a panic attack and was taken to the emergency room. She said she had been living in fear of losing her job in the midst of the Great Recession. "It was constant concern about what's going to happen next," the 28-year-old account executive said.

As the recovery sputters, many Americans, like Pfledderer, continue to struggle in the face of sluggish job growth and falling home prices -- and that's taking a toll on their overall well being.

Thirty-five percent of middle class Americans said they or someone in their household has experienced a physical symptom of stress related to the economy, according to a recent report by First Command Financial Services, a financial service provider.

Most common were anxiety, changes in weight, sleeplessness, low energy and irritability. "These are health conditions that we want people to be aware of," said Kathryn Power, director of the Center for Mental Health Services, a division of U.S. Department of Health and Human Services.

Power said that at the start of the recession there was a sharp uptick in the number of calls to the Center's suicide hotline. "About 30% of the calls we get are related to economic distress," she said. "They were having emotional difficulties because of fear of their financial situation, fear they would lose their job, lose their home."

Speaking of how our economy damages health, the Fukushima disaster is being dragged into the light slowly but surely. All three reactors fully melted down. Plutonium exists outside of the Fukushima plant’s ground. Radiation levels inside of Tokyo are very high in spots and the government is working hard to cover that fact up. The future sickness and suffering due to their miscues will be epic, and the proper steps to truly contain the radiation further are still not taking place, thus putting us all at risk.

Morning Update/ Market Thread 6/6

Good Morning,

Equity futures are close to even this morning, with the dollar higher, bonds lower, oil lower, gold slightly off, silver higher, and most food commodities lower.

There is no meaningful economic data today, and in fact very little meaningful the entire week ahead. That’ll make the market moves interesting as people are left to ponder rapidly weakening data and whether or not more “stimulus” is on the way.

My take is that without more, the economy will quickly give way to deflation. How far will they let it go before the next round of even more massive intervention is the only question, and that’s a question that we can only guess at, so why bother? From my perspective the markets are completely broken, completely captured and thus playing at this juncture is absolutely worse than gambling, it’s only feeding the sharks.

Still, observing the markets contains value as far as keeping awareness of the situation around us. On that basis I note that the SPX on Friday descended right to the bottom of the May down channel. It needs to bounce here or that channel will be broken, and so will the April lows:



When the Nasdaq produces outside inverted hammers like the one on Friday, it draws my attention as it is a possible reversal indication:



That said, if prices slide below that hammer today then it’s a bearish sign, and that makes the action today important in assessing the decline so far which has actually been very mild and may just be a correction within the ongoing money printing uptrend. Time will tell.

Meanwhile, the Japan situation is only getting worse – their situation is dire and the admissions of the disaster and possible future risks are slowing coming to light. The problems at Fukushima were not just tsunami related, the problems began from the earthquake. We have many plants that are just as vulnerable here, and Arnie Gunderson addresses emergency preparedness in his latest video which is worth a listen:

White House & NRC Recommend 50 Mile Fukushima Evacuation, Yet Insist US Safe With Only 10

Our inaction in this regard is just another example of corporate capture and that capture clearly jeopardizes all our safety. Again, these problems are all interrelated, as the captured economy is feeding the money producers at everyone’s expense. This is a situation that is not sustainable and therefore change on a major scale is coming – hopefully sooner than later.

Weekend Open Thread...

Morning Update/ Market Thread 6/3 - Employment Black Friday Edition…

Good Morning,

Equity futures are tumbling on the Employment Situation Report which came in with a headline nonfarm payroll increase of 54,000 against expectations of 170,000 – an even larger miss than was expected following the ADP report. The headline U-3 Unemployment rate rose from 9.0% to 9.1%. Both March and April were also revised lower, losing an additional 39,000 jobs.

The dollar is slightly higher, bonds are shooting higher, oil is down, gold is holding steady, silver is slipping, and food commodities are mixed.

Below is the entire report from the BLS:

Employment MAY 2011

Here is Econospin’s reaction to it:

Highlights
Analysts had lowered their forecasts after an anemic ADP private payrolls report but they did not lower them enough as growth was very soft. Nonfarm payroll employment in May grew a modest 54,000, following a revised 232,000 jump in April and a 194,000 increase in March. The May figure came in lower than analysts' revised forecast for a 170,000 expansion. Also, the March and April revisions were down net 39,000. Private nonfarm payrolls advanced 83,000 in May, following a 251,000 increase in April. The median forecast was for a 180,000 increase in May.

Sluggishness in payroll jobs was broad based. Goods-producing jobs were basically flat while private service-providing rose moderately and government jobs declined moderately.

Goods-producing jobs edged up 3,000, following a 38,000 rise in April. Manufacturing jobs dipped 5,000 after a 24,000 advance the month before. However, construction nudged up 2,000 after a 5,000 increase in April. Mining gained 7,000, following an 11,000 boost in April.

Private service-providing jobs slowed to an increase of 80,000 after a 213,000 jump the prior month. There was not much to write home about as the biggest component gain was for professional & business services with a 44,000 increase in May. Health care rose 17,400 for the latest month. On the down side, retail trade fell 8,500 while leisure & hospitality dipped 6,000.

Government jobs contracted 29,000, following a 19,000 dip in April. This latest decrease was largely local government, led down by local government education.

On a positive note, wage growth improved in May as average hourly earnings rose 0.3 percent, following a 0.1 percent uptick in April. May's number topped the median forecast for a 0.2 percent increase. The average workweek for all workers in May held steady at 34.4 hours.

On a year-ago basis, overall payroll jobs in May eased to 0.7 percent, down from a 1.0 percent pace the month before.

Turning to the household survey, the unemployment rate nudged up to 9.1 percent from 9.0 percent in April. Household employment actually rose 105,000 for the month but was outpaced by a 272,000 gain in the labor force.

The big question is whether the May numbers are a temporary soft spot or a new trend. The Labor Department indicated that severe weather did not play a notable role in the data. While the recovery/expansion has gained traction, the trajectory is somewhat lower than earlier believed.

On the news, equity futures dropped sharply.

First of all, it takes approximately 260,000 jobs added each month just to keep up with population growth. Taken at face value then we are losing a massive number of jobs. But of course we don’t take these numbers at face value as they are manipulated beyond belief.

The trend of government layoffs continues, with local governments laying off large numbers of workers. Not a part of this report, but just yesterday Minnesota announced they are laying off 36,000 workers statewide.

Let’s look at the “Alternate Table” where we find the better measurement of the unemployment rate under the U-6 column where we count “marginally attached workers,” we find a 15.8% seasonally adjusted unemployment rate, which is actually down .1%:



Of course John Williams at ShadowStats puts this figure closer to 23%:



Those numbers are calculated closer to the way they were during the Great Depression, and today’s numbers rival those from that time. Of course they didn’t have 43 million Americans on food stamps, they had breadlines.

The phony “Birth/ Death Model” added another 206,000 jobs (headline number would be hugely negative if not for this). This marks the fifth month in a row where the BLS is adding more jobs via this model this year than last, 187,000 so far in fact:



Just for fun, I created a chart showing the outrageous Mean Duration of Unemployment and compared it to the base money supply:



It may look like one is leading to the other, but in fact I think they are both a reaction to reaching the macroeconomic debt saturation point. Once that point is reached, then adding more debt or even printing more money will only lead to further unemployment as the cost to carry that debt adds more and more burden to the economy. This concept is the one that puts the complete lie to all the supposed economic experts as the diminishing returns of debt creation have already shown.

The Non-Manufacturing ISM is released at 10 Eastern this morning and will be covered inside today’s Daily Thread.

The markets are very close to breaking their April lows. Should they do so on a closing basis, then it sets up a major DOW Theory non-confirmation as the Transports have made a new high, but the Industrials have not.

Clearly the economy is slowing again, the effects of money printing waning. There was no “recovery,” just printing.

Morning Update/ Market Thread 6/2 - Panic or Blackmail (?) Edition…

Good Morning,

Equity futures are just above even this morning following yesterday’s 280 point nose dive. The dollar has lost all of yesterday’s gain and then some, yet the moves in equities and commodities are not reflecting that move lower in the dollar as they have been. Bonds are lower this morning, oil is slightly higher after a large drop yesterday, gold is hanging tough after rising yesterday (hint), silver is up slightly after getting nailed again yesterday, and most food commodities are higher today after a large move down yesterday.

Okay, so we know that the market is about 95% fluff, so why now? The data has been bad for weeks, so more bad data doesn’t seem like a likely candidate to me, although the manufacturing and housing data is obviously sliding off the proverbial cliff. No, the suspicious me is feeling manipulated again – we’re up against the debt ceiling, European countries are not complying by sucking IMF debt fast enough, and the end of QE2 is rapidly approaching. Is a threat being made somewhere along the lines of “See, this is what happens if you don’t comply?” Hmmm, I am suspicious because I know how the central bankers (who own and control the markets) work, and I’ve seen them do this time and again.

The more I view the market, the more I realize that it is a political tool and not the “free market” fantasized about by countless technicians – at least it’s no longer a free market, it’s more like a manipulative hologram.

Still, if one is doing TA on it, there is what appears to be a large bear flag following yesterday’s downstroke so it’s possible that there’s more to come:



The bad data flow continues with the Weekly Jobless Claims this morning coming in at 422,000 – still well above that 400k mark. This is down slightly from 424k last week and is worse than expected. Again, it takes this number getting below 350k, and staying there, to indicate job growth, and that has not happened yet. Here’s Econospin calling this number “good,” although I don’t know how anyone can – note yet another revision higher to last week’s data, that means this week’s number is somehow “good?”

Highlights
In badly needed good news on the jobs market, initial jobless claims are easing a bit from elevated levels. Claims fell 6,000 in the May 28 week to 422,000 (prior week revised to 428,000). The four-week average of 425,500 is down a sizable 14,000 and compares well with the month-ago level of 432,250. There are no special factors skewing the data with tornado-hit Missouri reporting some trouble but not enough to affect the total. Continuing claims are little changed, down 1,000 in data for the May 21 week to 3.711 million with the unemployment rate for insured workers unchanged at 3.0 percent. This report probably won't improve expectations for tomorrow's monthly jobs report but at least it won't be deepening pessimism.

Factory Orders will be released at 10 Eastern, we’ll report on that inside of the Daily Thread.

Note the sudden shift in the need to “keep the ‘Fed’s’ balance sheet high,” as if their “balance sheet” isn’t just an off the books addition to our national debt…

Fed May Signal Balance Sheet Will Stay at Record Amid Slowdown

June 2 (Bloomberg) -- A wave of surprisingly weak data on the U.S. economy may spur Federal Reserve policy makers to support growth by making it clear they’re in no hurry to shrink the central bank’s record balance sheet.

There’s a “strong possibility” that the Federal Open Market Committee will say following the June 21-22 meeting that it will keep reinvesting proceeds from maturing debt for a while, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. Previously, the FOMC has said it will keep the benchmark interest rate near zero for an “extended period” without a similar pledge about its balance sheet.

Yesterday’s reports showing manufacturing grew at the slowest pace in more than a year in May and employers added fewer jobs than forecast prompted Feroli to cut his estimate for second-quarter economic growth. The slowdown may push policy makers to consider what options are left after their second $600 billion round of asset purchases sparked a Republican backlash. Saying the balance sheet won’t shrink immediately could dispel any notion that the Fed is about to push up borrowing costs.

“The idea of extending the period in which they maintain this level of accommodation is an easy call, a natural call and the right call,” said Neal Soss, chief economist for Credit Suisse Holdings USA Inc. in New York. A third round of asset purchases “is so contentious within the committee and the broader political environment, that they aren’t going to go there. That makes it very unlikely.”

What hogwash! The impossible math ensures that another round of QE is coming, count on it. If printing is halted at any point now, the impossible math dictates that a wave of deflation strikes. So, deflation, inflation, name your poison. You are being manipulated by/in the markets and your wealth is going to be transferred to them one way or the other as long as they are the ones in control of producing money. Central bankers are like a disease. You must treat the disease and stop talking about the symptoms.

Oh, yeah, as I type those bearish flags are breaking down… hope you didn’t buy into the LNKD IPO hype!

Morning Update/ Market Thread 6/1

Good Morning,

Futures are falling this morning despite a still lower dollar, bonds are rising sharply, oil is down a little, gold is up, silver is down, and most food commodities are down as well. Watch the food commodities, many of them are showing a Head & Shoulder’s pattern on their daily charts and they are close time wise to having a symmetrical right shoulder.

It was the ADP report this morning that sent futures lower and bonds higher. Remember, this report is notorious for being wrong, but this was a very large move from April’s supposed 179,000 private sector jobs created, to only 38,000 in May. That will lower expectations for this Friday’s Employment Situation Report. Of course we know that there have not been ANY new jobs created overall, the economy is still losing jobs, especially in relation to population growth.

And almost all the data is turning bad again. Yesterday the Chicago PMI fell out of bed, and Consumer Confidence fell, but wouldn’t you know that State Street Confidence rose? Definitely something to watch as those on State and Wall Streets are always the last to get it. Yesterday’s Case-Shiller data had to be embarrassing to all the housing bottom callers… except of course that they have no shame because they are mostly all shills trying to sell you something so that they can buy their next trinket from China or from Japan where they have been powering their industry with shoddily built nuclear power plants built on shorelines on top of fault zones. Don’t worry school children, just wear long sleeved shirts to your contaminated school, it’ll be okay (that is until about 10 to 20 years from now when they will deny that your cancer has anything to do with their corporate captured government response).

Even the worthless Mortgage Banker’s Association couldn’t pull a positive number out of their hats this morning (hey, it’s spring time) with their Purchase Index flat but their Refi Index fell 5.7%, bringing their overall index down 4.0% (like I believe anything this thug Association says).

And the Challenger Job-Cut Report also is headed in the negative direction with mass layoffs rising slightly month over month.

Gee, all that money printing and I can’t remember the last truly good piece of evidence that the economy is actually improving. Could it be that adding debt and/or money printing are actually BAD for the economy? Naw, couldn’t be, that would mean that all the bankers and economists are either wrong or lying, and that can’t be now can it?

The Manufacturing ISM and Construction Spending are released at 10 Eastern this morning and will be reported inside today’s Daily Thread.

Bad data yesterday and yet we get a tremendous ramp job into the close. Bailing out Greece? Please… that is nothing but a joke and it’s not even funny anymore like it was the first time when you could at least use being naïve as an excuse. What really happened was still more manipulation, this time it came when the CME LOWERED margin requirement for placing bets on most of the major indices. Sweet, got to keep the game alive for what, oh another 24 hours?

The following article reminds us how the world really works – it is about WHO creates the money. Those who create the money use it to buy the politicians who make the laws. They use the money to buy/ build exchanges where phony paper products are traded that serve no purpose to society – this is otherwise known as gambling, but it’s legal because they print the money and own the politicians. So, the markets are totally corrupt, and government is totally captured, and this is just one example of how it happens:

Judd Gregg joins Goldman Sachs

Judd Gregg, the former Republican senator from New Hampshire, is joining the investment bank Goldman Sachs as an international adviser, the company announced Friday.

“Judd Gregg’s experience and insight will contribute significantly to our firm and our continuing focus on supporting economic growth,” Goldman Sachs chairman and CEO Lloyd C. Blankfein said in a statement announcing the move.

Gregg will "provide strategic advice" and "assist in business development initiatives," according to Goldman Sachs.

“A strong financial sector is critical to our nation and one of the key engines of job creation in our country,” Gregg said in the statement. “I hope that I can bring to Goldman Sachs some ideas and perspectives that will help the firm continue to be a leader in supporting its clients in their pursuit of the capital, credit and advice they need to be successful.”

Gregg served three terms in the Senate and is a former two-term governor of New Hampshire. He served as chairman and ranking member of the Senate Budget Committee and also as ranking member of the Senate Appropriations Foreign Operations Subcommittee.

Uh-huh. Yep, of course we all know what he’ll really bring to Goldman Sachs…

In other words, nothing new, the robbery of your (and future generation’s) productive efforts continues unabated.