Saturday, August 6, 2011

Weekend Open Thread...

Friday, August 5, 2011

Morning Update/ Market Thread 8/5 – What Jobs Friday Edition…

Good Morning,

Stocks are higher this morning following the 9th largest point drop in history yesterday. The dollar is lower, bonds are lower, oil is higher, gold & silver are slightly higher, and food commodities are mostly lower.

Let’s face it, without massive QE, and especially with the potential of tightening budgets, the stock market is just a limp noodle. Actually it’s more like a great big fluffy marshmallow – except there’s absolutely nothing real on the inside, now not even the corrosive sugar.

There is currently a poll on the front page of that asks, “Which is a bigger concern for the U.S. Economy? Debt or Unemployment? And 76% of the respondents chose Unemployment, with only 24% choosing Debt. This tells us that the vast majority of people still do not understand that it is the DEBT that is leading directly to the unemployment! I think CNN putting those two topics together was a complete accident on their part, but it shows just how far away we are from a workable understanding that the WHO whom creates the debt is directly responsible for the high unemployment.

And speaking of which, the weak and trumped up numbers came in better than expected with 117,000 supposed nonfarm jobs being created, and the headline for chimps rate fell from 9.2% to 9.1%. Here’s Econofantasy:
The economy finally got a break with better-than-expected numbers in the July jobs report. Payroll jobs advanced 117, 000, following a revised 46,000 rise in June, and revised 53,000 in May. Analysts had projected a 75,000 gain. Also, the May and June revisions were up net 56,000. Private sector growth was somewhat healthier as private nonfarm payrolls grew 154,000 in July, following an 80,000 rise in June and 99,000 increase in May. The median forecast was for a 108,000 boost for the latest month.

A rebound in the auto sector appears to be helping earnings. Wage growth picked up as average hourly earnings increased 0.4 percent, no change in June. The market forecast was for a 0.2 percent increase. The average workweek for all workers in July was unchanged at 34.3 hours and matched the market consensus.

From the household survey, the unemployment rate slipped to 9.1 percent from 9.2 percent in June. The July figure came in below expectations for 9.2 percent.

Today's report should relieve fears that the economy is headed back into recession. Growth is still modest but positive. And maybe the phrase "transitory" will again be seen applying to first half weakness. Equity futures jumped on the news.

The BLS site is failing to serve up information, so I am unable to obtain the Employment Situation report or the phony Birth/Death Model. I will be out selling boats all day and all weekend (come by 12th and Commercial Avenue in Anacortes!), so I don’t have time to wait for their sites to return to normal service.

Here’s what John Williams thinks real unemployment is:

The Monster Employment Index fell from 146 to 144, not that anyone cares and gee, I can access that info.

Sorry I don’t have the time to wait for it.

The Head & Shoulders patterns are now obviously confirmed. The targets on those are 1,130 on the S&P and 10,900 on the DOW.

The VIX shot to well above the upper Bollinger band again, erasing the market buy signal from just two days ago:

Thursday, August 4, 2011

Morning Update/ Market Thread 8/4 – Gateway Yachts Edition…

Good Morning,

Instead of babbling endlessly about the corrupt markets, manipulated data, financial engineering, fraudulent accounting, and debt saturation… today is the day Nate gets real. The “markets” are nothing but a mirage, an HFT figment of central banker’s imagination. Their imagination involves taking as much as they can from you and a global playground for themselves. Playing in their world only further feeds the breakdown of the rule of law. No longer, not from me.

Gateway Yachts is my way of producing something real and using our economic reality in a positive manner. Make no mistake – my thoughts about the economy haven’t changed one iota, but life is short, and I don’t intend to spend the rest of it focused solely on the negative economic reality. I want to do something I enjoy, and I’ve found a way to do that and make it work despite that reality, but without the help of traditional banking.

No, this is not what I would consider a prime time to start a small business, but this business actually feeds on the reality of bubble priced yachts, bubble priced fuel, and a populace who largely cannot afford to do this type of yachting on their own.

Gateway Yachts is a Fractional Ownership Program along the lines of Netjets. Customers buy fractions in 1/8 increments, each 1/8 share brings with it 5 weeks (35 days) of advanced schedule use and unlimited open time use.

You can read all about how this works by following the Gateway Yachts link and reading about “Gateway Fractional Ownership.” You can also read about my background and the history of fractional ownership on the “About Us” pages.

Fractional ownership is huge in the corporate aviation world. In just two decades it went from zero to today more than 50% of all corporate jets are sold into joint ownership programs. In the mid 1980s I was working on developing an aviation fractional ownership program when a Goldman Sachs executive, Richard Santulli, bought the world’s largest aircraft charter company, Executive Jet Aviation, renamed it “Netjets,” and implemented a fractional ownership plan almost identical to the one I was writing my Master’s Research Paper on. Warren Buffett, a former critic of corporate aviation, bought the company and Berkshire owns it today.

The Netjets concept was groundbreaking in the same way that Southwest airlines was. The premise is that you take highly underutilized expensive assets and you utilize them more! Both of these companies created a market that did not previously exist by making their respective segment of air travel affordable to more people. Today all kinds of people own fractions of corporate jets who would have never been able to afford them on their own.

In the yachting world, there have been some half-hearted attempts, but sadly it has never been done properly, although there are a couple of successful programs in Europe. In the United States there are small companies who do this, but again it has not been done correctly. The common errors are to use unreliable old, heavy, fuel inefficient yachts that get run into the ground and then the customer base becomes unhappy, or some moneyed individual will try to start a program for his millionaire buddies using some mega-yacht and he may sell one boat if he’s lucky.

No, the formula that works is to use all new equipment, use it as heavily as you can, but then retire it quickly and rotate the old equipment out of the program. But the equipment needs to be economical to operate to really hold down costs, and they need to target the area just below the solo yacht buyer where there is no market that currently exists.

A lot of people look at the marina and see only an expensive dream. Most won’t even enter the marina as they know that dream is out of reach. Not anymore. In fact, my program has lowered costs so far that you can spend a week yachting in the Northwest surrounded by nature, and spend less than one-third the amount of a week long vacation to Disney World! Fuel included.

For those who understand our economic impossible math, I have turned that equation upside down, spelling out exactly how the math works to make yachting affordable for a way larger segment of the population - Ownership Method Comparison. Check out the 10 year total cost of owning all by yourself versus the cost of owning inside of the Gateway Fractional Program.

I now have agreements with two manufactures, one builds the world’s most fuel efficient yacht – period, and he holds patents on the design. I have interest from a third manufacturer and may fill in a market gap a little higher end, again as efficiently as possible and from another much respected builder. All these boats are built right here in Washington State. We’re talking real jobs and a real product, and the best part is that no commercial banker is involved!

How do we do that? These manufacturers are either self-funded or they use private investment capital to build their boats. And to make my program even more affordable, I have also created a second company called Gateway Yacht Capital (GYC). This is key to the program, a piece that no other fractional yacht company has.

The purpose of GYC is to take in private investment money to finance customer shares. This is done very conservatively so that the yacht is never “under water.” The investor receives a rate of return that far exceeds what they can typically get elsewhere, and their investment is fully collateralized by the vessel itself which is always in Gateway’s possession. To read about how this works, please follow this link to GYC Investors.

An investment in GYC is real, backed by something real, that created real jobs here in America, and in the most environmentally friendly way possible - Green and Built in America. Giving the bankers the old Heave Ho? Priceless.

In addition to the conservative investment opportunity, I am open to more speculative partners in Gateway itself. For more information, please contact me by following the contact link on the Gateway site.

Gateway Yachts – Adventure Yachting Excellence at a Fraction of the Price.

*Special thanks to AZRainman who did the code work and produces the world’s most beautiful graphics! He normally does not do commercial work as he possesses a good moral compass, thus I consider myself lucky that he and others have helped make this vision a reality.

Wednesday, August 3, 2011

Morning Update/ Market Thread 8/3

Good Morning,

Equity futures are up a little this morning following yesterday’s 265 point rout. The dollar is lower, bonds are flat, oil is up slightly, gold set another new record leaping to $1,675 before pulling back a little, silver is higher, and food commodities are mixed.

With the impossible math on full display thanks to the central thieves and clowns in D.C., China’s leading credit agency went ahead and downgraded the debt of the United States:
Chinese agency downgrades U.S. credit rating

Beijing (CNN) -- Although the United States narrowly avoided an unprecedented default following congressional approval of a last-minute compromise plan to raise the debt ceiling, China's leading credit rating agency Wednesday downgraded U.S. sovereign debt after putting it on negative watch last month.

The Dagong Global Credit Rating Company, which lowered the United States to A+ last November after the U.S. Federal Reserve decided to continue loosening its monetary policy, announced a further downgrade to A, indicating heightened doubts over Washington's long-term ability to repay its debts.

It said the gloomy assessment -- much lower than the AAA ratings given by the so-called "big three" Western agencies Moody's, Fitch, and Standard and Poor's -- was inevitable given the level of market concern generated by the stalemate between Democrats and Republicans over the debt ceiling.

"The squabbling between the two political parties on raising the U.S. debt ceiling reflected an irreversible trend on the United States' declining ability to repay its debts," Dagong Chairman Guan Jianzhong told CNN.

"The two parties acted in a very irresponsible way and their actions greatly exposed the negative impact of the U.S. political system on its economic fundamentals," he said.

Ironically, Dagong's move could hurt not just the United States but also China, the largest foreign owner of U.S. debt with holdings worth almost $1.2 trillion.

"Our downgrade simply reflects reality," Guan said. "Our rating didn't cause China to lose any money --- it was the inappropriately high ratings for the U.S. by Western agencies that had led China to make risky investments in U.S. debt."

Observers say China, whose foreign exchange reserves now stand at $3.2 trillion, has had little choice but to buy U.S. Treasury bonds.

Of course the west doesn’t take this truth telling seriously because China is a mess itself. While China isn’t running structural deficits that’s only because it has printed massive amounts of money, and in fact is more like the United States was just after the roaring twenties. There, like here, they had an industrial revolution… that was followed by the current credit and money bubble, which if it follows the same pattern will be followed by a Great Depression… just sayin’. Still, with other nations downgrading our debt, it means that they will expect higher rates of return.

The Challenger Job-Cut report is showing another large increase in mass-layoffs, rising from 41,432 in June, to 66,414 in July, which is a staggering 60.2% one month increase! It is true that relative to the 2007/2008 period that mass layoff announcements were low, making a large percentage increase like that possible. Still, we went through a huge period of job shedding, never recovered, and now job shedding is picking up once again. Here’s Econohope:
Company news is seeing a noticeable upturn in layoff announcements, measured in July by Challenger whose count shows 66,414 vs 41,432 in June and vs 41,676 in July last year. The latest count is the highest since March last year. The report warns that the majority of the layoffs came from major employers in bellwether industries -- Merck, Borders, Cisco, Lockheed, Boston Scientific. July aside, the reports stresses that job cuts over the last year have been extremely low.

Didn’t know there were that many jobs left to shed!

The ADP Jobs Report fell dramatically from their last month’s wild guess that turned out to be waaaayyyy off. Their 157,000 prior was revised down to 145,000 and this month fell to a supposed 114,000. So what… since they were so far off last month they lower this month? How exactly are they arriving at their guesses? If you’re smart, you don’t care, you will simply ignore these manipulators and go out and invest in something real. I keep track only to watch the robbery in progress.

Speaking of criminals, the hypocritical Mortgage Banker’s Association claims that Purchase Applications rose 5.1% in the past week, and that the Refinance Index rose 7.1%.
A big drop in mortgage rates tripped a surge in mortgage applications during the July 29 week. The number of purchase applications rose 5.1 percent in the week but is still no higher than a month ago with the report, issued by the Mortgage Bankers Associations, stressing that activity is at a low base and remains weak by historical standards. Refinancing applications rose 7.8 percent and here too the report is downbeat noting that volume is still 30 percent below the year-ago level with negative equity and a weak jobs market continuing to constrain borrowers. Thirty-year mortgages averaged 4.45 percent, down 12 basis points in the week, with 15-year mortgages down 15 basis points to a new low for the survey at 3.52 percent.

Laugh out loud. Stop it please, you’re killing me… again, whatever, not believable, who cares, go invest in something real and do your best to help put these criminals in jail.

Factory Orders and the Service ISM are released at 10 Eastern.

Yesterday’s close was actually a 6 month closing low for the S&P, it closed beneath both the June and March lows. This pattern can be construed as a Head & Shoulder’s pattern, and it can also be construed bullishly as a fourth wave flat. A break below the 1,250 support area, just below where we are currently would break the neckline and either confirm the H&S, or would be a sucker move to draw in money on the short side only to launch another wave higher:

Don't forget that we have a VIX market buy signal now in place, but then again the VIX has been lower the past two days which can also mean that panic selling has not taken place and that still lower is in the offing.

For me, no thanks, it’s hard to have conviction one way or the other when you know how manipulated the markets are and how the “Fed” and politicians will stop at nothing to advance their game. My warning is don’t play this game until a major restructuring of our money and political systems takes place along with clearing out the impossible math of debt.

Déjà vu, it makes me feel like I’ve been here before…

Tuesday, August 2, 2011

Morning Update/ Market Thread 8/2 – Shouldn’t Have Took More Than You Gave Edition…

Good Morning,

Equity futures are lower again this morning as the reality sets in of what a “deal” means. Bonds are higher again, the dollar is higher and close to rising above the descending wedge top boundary, oil is lower at $94 a barrel, gold is setting another new all-time high at an amazing $1,643 an ounce, silver is higher too, and food commodities are lower.

Gold is shouting that what we have is a MONETARY problem. Heck, yesterday Russian Prime Minister Putin accused the U.S. of living beyond its means, and went so far as to call the U.S. a “PARASITE” on the global economy. Hard to argue with that. Macroeconomic debt saturation has led to impossible math. If nothing else, this silly debt ceiling “deal” has highlighted the impossible math for what it is.

We’re currently running $1.5 Trillion deficits (that’s $15 trillion over ten years without increasing which it most certainly will due to exponential math), but this deal is only going to “save” approximately $2.1 billion over the next decade. Hardy, har, har… It is nothing, yet it is austerity and it means you get less while continuing to give the same or greater.

But the truth is that it stands a snowball’s chance in Hades of actually slowing down the impossible and exponential math that the central banks created. Remember Greece? Oh yeah, they were saved! And then saved again… and again. Well, that type of thing lies in our not too distant future.

The impossible math will continue to manifest itself in a sundry of ways – yes, downgrade by the corrupt rating agencies is possible – yes, higher interest rates – yes, more money printing and more inflation – yes, more waves of deflation – yes, the central bankers will continue to rule the markets and manipulate the data to their advantage and your disadvantage – yes, the likelihood of “other” nasty events occurring goes up the longer we try to operate business as usual with the impossible math in the background, never really clearing out the debt and the criminals WHO need to be cleared out.

One manifestation could be seen yesterday when the Manufacturing ISM cratered 8% in one month, falling from 55.3 to 50.9. And that’s the trumped-up version of the story.

And just this morning in yet another report you have trumped up inflation figures that are way low still far outpacing Personal Income. How long can prices outstrip income and you still have anything that one could refer to as an “economy?” Money printing does not an economy make. Here’s econohope:
In June, both income and spending were soft, reflecting slow job growth, a decline in motor vehicle sales, and a decrease in gasoline prices. Again, inflation news is mixed but more favorable. Personal income in June edged up 0.1 percent, easing from a 0.2 percent rise in May. The market median called for a 0.2 percent rise for the latest month. Wages & salaries were unchanged, following a gain of 0.2 percent the prior month.

Consumer spending declined 0.2 percent rise after posting a 0.1 percent uptick in May. The latest personal spending expenditure figure matched analysts' projection for a 0.1 percent rise. By components, durables dropped 0.4 percent after falling 1.3 percent in May. Nondurables dropped 0.6 percent, following a 0.3 percent dip the month before. Services were flat, following a 0.4 percent jump in May. Discounting inflation, overall PCEs were unchanged in June, following a 0.1 percent slip in May.

On the inflation front, the headline PCE price index declined 0.2 percent on lower energy costs, after increasing 0.2 percent the month before. The core rate rose but eased to 0.1 percent from 0.2 percent in May.

Year-on-year, headline prices are up 2.6 percent-the same as in May. The core is up 1.3 percent on a year-ago basis, matching May's pace.

Here’s Bill Still’s latest, tirelessly working to get the truth out for now for decades about the root of our money problem:

Yesterday the VIX returned to inside the Bollinger Bands and thus a short term market buy signal was given. These can work immediately, or they can take a few days:

The major indices bounced off their 200 dma’s to close above them, and they are bouncing off them again this morning. I don’t know what way the criminals who own and manipulate the markets are going to take them – I guess you would have to know their agenda and be able to out millisecond their HFT’s – good luck with that.

Monday, August 1, 2011

Morning Update/ Market Thread 8/1 – It’s Dee’s Fault…

Good Morning,

Stocks gapped higher yesterday on the announcement there is a possible deal (that still must be voted on). Sorry, but this deal is far worse than no deal, it means that we continue to make the impossible math worse. The dollar is lower, bonds are flat, oil is higher, gold and silver are down slightly, and food commodities are higher.

The Manufacturing ISM and Construction Spending are released at 10 Eastern this morning and will be reported inside of today’s daily thread. The economic calendar is fairly busy this week, culminating in the July Employment Report this Friday. Expectations are for +75,000 Nonfarm jobs.

The VIX closed on Friday well above the upper Bollinger, as long as the deal is consummated it is likely to return inside the normal range, and that would trigger a short term market buy signal:

Pimco’s Bill Gross says he sees “Debt Men Walking…” No kidding, Bill. And just who exactly is one of the world’s largest purveyors of debt? Who is it exactly who makes their living profiting from debt, who worked tirelessly to push their exposure onto the American people? This guy makes me sick as all the irresponsible debt merchants do.