Saturday, August 27, 2011

Weekend Open Thread...

Friday, August 26, 2011

Morning Update/ Market Thread 8/26 - Slip Sliding Edition…

Good Morning,

Equity futures are slip sliding this morning, not receiving any help from a downwardly revised Q2 GDP. The dollar is lower, bonds are higher, oil is lower, gold is higher, silver is losing a tad of shine, and food commodities are just a little more palatable.

Second Quarter GDP was revised downward from 1.3% to 1.0%, below the consensus of the economic guessers, aka. “clowns.” Here’s Econocircus calling the action in the ring:
The economy got a downgrade for the second quarter but it was in line with expectations. The Commerce Department's second estimate for second quarter GDP growth was nudged down to a modest gain of 1.0 percent annualized, compared to the initial estimate of 1.3 percent and to first quarter growth of 0.4 percent. Analysts had projected a revision to 1.1 percent annualized.

Final sales of domestic product were revised to an annualized 1.2 percent from the initial estimate of 1.1 percent. Final sales to domestic purchasers were revised up to 1.1 percent from the original estimate of 0.5 percent annualized.

Economy-wide inflation was revised up marginally to 2.4 percent annualized, compared to the original estimate of 2.3 percent and the first quarter rise of 2.5 percent. The consensus forecast was for 2.3 percent.

While GDP growth was revised down, the more important measure of momentum---final sales-were revised up slightly. But today's numbers do not say much for the current status of the economy. Equity futures were little changed on the news as traders await Fed Chairman Bernanke's speech at Jackson Hole at 10:00 a.m. ET.

Hmmm… a miss is suddenly "in line," and it's amazing how all of the sudden final sales became more important than total GDP or inflation. Here’s a hint – that’s because total sales are not REAL. Inflation is vastly under reported and thus GDP and sales are both over reported. Again, the disconnect between reality and economic reports is a big part of losing confidence.

Nowhere is the disconnect greater than in the reporting of Corporate Profits. Year over year figures have been huge, but I’ve contended all along that they are FALSE. The vast majority of corporate profits come from the energy companies and the banks. With money printing out of control, rising energy prices create apparent energy company profits, but the truth is those profits are offset by destruction of the value of money. The major banks are using fraudulent accounting via Mark-to-Model accounting, along with a myriad of other accounting tricks and the offloading of junk onto the government via Freddie and Fannie. Remove the false accounting which is rampant throughout all of corporate America, and real corporate profits would have stayed very negative the past couple of years.

Now this morning, despite the fraudulent accounting, Q2 “profits” that were originally reported as being up 7.8% year over year were revised down to 0.0%! My, that’s quite the revision and shows just how fast the situation is changing. And if Q2 is flat year over year, then Q3 is very likely to wind up negative, again despite the false accounting.

All the fraud and overstatements mean that equities are very mispriced – have been for quite some time. Supposed Price to Earnings are just that, supposed. This is just one of the reasons why I claim that the markets are currently not real, and I would advise people not to participate in them or to contribute to the criminal misconduct.

“Consumer” Sentiment will be released at 9:55 Eastern this morning, it will be reported inside of today’s Daily Thread.

Of course we are all hanging on the Bernank’s every word – ugh. Could care less, really. The only word properly associated with that man is “guilty!” His actions have damaged this nation severely, but it’s not just him, it’s the entire notion of a private “Fed” controlling the production of money – that is a no win proposition for citizens who have become nothing but “consumers” in the narcissist’s lexicon.

What I now see in the equity markets is a larger sideways triangle that appears bearish – of course manipulation just is, so take that triangle within the framework of corruption that we have. Below is a daily chart of the SPX:

And below is a 1 hour chart of the futures with the DOW on the left and S&P on the right, you can clearly see the same triangle forming but in more detail:

Waiting on the Bernank with baited breath… Slip Sliding Away.

Thursday, August 25, 2011

Morning Update/ Market Thread 8/25 - Much Ado About Nothing Edition…

Good Morning,

Equity futures are up slightly this morning, with the dollar holding in its recent range, bonds are slightly higher, oil is hanging out at $85, gold is still correcting at $1,740, silver is flat, as are most food commodities.

Really, the “Fed” is meeting at Jackson Hole and the world is waiting with bated breath? Turn on the T.V. and the clowns will tell you what the criminals might do, this or that, criminals & clowns. It’s quite a freak show, and their location says it all. Note that they aren’t meeting in Detroit. It could just as easily be monikered “The Narcissist Convention,” whose motto is, “Proudly taking more than we give, since 1913.”

For the non-narcissists out there, if you are feeding the criminal’s “markets,” then you might want to think about karma for a minute or two. Humankind is made up of trillions of little transactions that all equal big things, and a general direction. If you like the current state of impossible math affairs, then by all means, keep trading those wonderful ETFs and providing fuel to their HFT fires. But if you don’t like the flames, then perhaps we should all work to remove the fuel? That’s what I’m saying, in fact I’ve created a path where some of that fuel can be used to produce real things and create real jobs. If the situation bothers you and you would like your life’s energy to be truly productive, get in touch.

I’ll say it again, the markets are not real, and the “Fed” Ponzi is coming to an end. It was easy for math literate people to see a decade ago, and now even those who don’t ‘do’ math can see it. Just look at Libya, amazing how fast things can turn. One day you’re supporting those in power, and the next you are a hunted criminal. Karma. You don’t want to be on the wrong side on that day – think about your actions is all I’m saying.

Yesterday and still today the clown complicit media was touting the trumped up Durable Goods report. Today the Weekly Jobless Claims rise again, yet almost no mention of it in the circus… from the clowns. Fluff with no substance, it’s the fluff circus with complicit clowns and narcissistic criminals running the show. Embarrassing is what I say.

Weekly Jobless Claims jumped 9,000 to 417,000 from last week’s 408,000. Of course last week was revised higher 4k and so Econocomplicit compares apples to oranges to say that claims only rose 5,000 instead of the 9,000 it actually did, thus underreporting the climb by nearly 100%. Fluff, here’s the complicit clowns:
Initial jobless claims rose 5,000 in the August 20 week to an adjusted total of 417,000 but were skewed higher by a labor strike at telecom provider Verizon that has since ended. The Labor Department says there are at least 8,500 claims related to the strike in the week and at least 12,500 in the prior week (these levels are before adjustment). The adjusted total for the August 13 week is revised 4,000 higher to 412,000. The four-week average ended its seven-week run of declines, rising 4,000 to a 407,500 level that shows a 7,000 improvement from the month-ago comparison.

Continuing claims for the August 13 week fell 80,000 to 3.641 million for the lowest level since September 2008 and the financial meltdown. The four-week average is down 20,000 to 3.701 million with the month-ago comparison showing little change. The unemployment rate for insured workers, at 2.9 percent, has been inching back and forth between this level and 3.0 percent since February.

Markets are showing little initial reaction to the report which, outside of the Verizon strike, points to mildly improving conditions in the labor market.

My hope is that the clowns who earn money writing this tripe are fully invested in these markets – I’m sure they are, and I’m sure that in the end they will get what they deserve. If you don’t want to wind up in the same place as them, then I suggest you get real.

Those getting nervous by the attack on gold shouldn’t be. Gold is not going to collapse to nothing, not as long as the “Fed” is still wrongly in control of the production of our money. Sure, they are going to do everything they can to manipulate it and to shake you out of your position, that’s because the narcissists know what’s real and what’s not and they want it for themselves – narcissists don’t like others possessing more of what’s real than they do. Gold could lose half its value and still would have tripled from where it was just six years ago. Hang on, you will know it’s time to let go when you see something similar to Tripoli happening on the steps of the “Federal Reserve” building.

Wednesday, August 24, 2011

Morning Update/ Market Thread 8/24

Good Morning,

Equity futures are close to even this morning following yesterday’s fluff. The dollar is down, bonds are down a little, oil is flat, gold & silver are lower, while food commodities are flat as a tortilla – corn or wheat, doesn’t matter.

The people in this world who I respect the least, those who run the Mortgage Banker’s Association (okay, make that second to last), reported that the Purchase Index fell 5.7% in the prior week, and according to them hit the lowest level in modern record keeping. Here’s Econogullible:
July home sales proved disappointing and MBA's purchase index points to further bad news for August. The purchase index fell steeply for a second week, down 5.7 percent in the August 19 week and now at its lowest level in 15 years. Low interest rates aren't helping with applications falling across the board including a 15 percent fall for jumbo loans and an eight percent fall for government housing programs. Low rates had triggered a surge in refinancing applications which however eased back 1.7 percent in the latest week. Rates moved slightly higher in the week with the 30-year up seven basis points to 4.39 percent.

Right, record low. And we’re supposed to believe the wild refinancing number last week, but this week it’s negative? To say that they are making stuff up would be kind. To call their report a lie or outright fraud would be in line with reality.

The July Durable Goods report shows mysterious improvement. I don’t trust this report either and also realize that “goods” in their mind are always first measured in dollars, and to make them “real” they correct using inflation data that is simply not real. So, at this stage we are reporting this stuff just to keep an eye on the criminal enterprise that is the “Fed,” not that we believe or act on any data they produce. Here’s Econopray with the goods:
A monthly surge in new orders for motor vehicles & parts, the best in eight years, headlines a strong durable goods report for July. New orders for durable goods surged 4.0 percent in the month with the motor vehicle component up 11.5 percent in what appears to be the well anticipated Japanese-related snap back. Aircraft orders, which nearly always show wide month-to-month swings, rose 43 percent and together with motor vehicles made for a 14.6 percent jump in the transportation category. Excluding transportation, new orders rose a solid 0.7 percent following 0.6 and 0.8 percent gains in the two prior months.

A surge in overall shipments is another big plus for this report, up 2.5 percent on top of June's 1.1 percent gain. Primary metals show a third straight month of shipment strength as do motor vehicles and aircraft. Capital goods also show gains in shipments in what offers an early signal of strength for third-quarter business investment.

Other details show a steady 0.8 percent gain for overall inventories with unfilled orders showing an increasing rate of build, from 0.3 percent in June to 0.7 in July. But the one factor that limits the impact of this report on the economic outlook is that it's data for July. Early looks at August conditions, that is from the New York, Philly, and Richmond Feds, show significant contraction making it too soon to say whether manufacturing, which has been the economy's backbone, is once again re-accelerating.

Please… auto sales surging? Really? Sold to them.

The FHFA House Price Index is released at 10 Eastern this morning, and as usual will be reported inside of today’s Daily Thread.

So, the markets zoom ahead of the Jackson Hole “Fed” meeting announcement. Wow, really, can’t wait. What are they going to do? More QE? As if that has accomplished anything positive so far? Is there really political support for that? I’m not expecting nearly as much as the market seems to be, but know that regardless of what they do, or don’t do, the impossible math will continue to get worse as long as they are in control of the production of our money. That control provides them the string that makes the politicians into puppets, and the people into slaves.

Did Paul Krugman really say, "People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage?"

Space aliens and now this. And these are the guys held up as experts to the world and given Nobel Prizes?

Stupid is as stupid does, Forrest Krugman. This is called “The Broken Window Fallacy” (thanks Mick).

So many myths out there, so little time. Run Forrest, RUN!

Did you see the pictures of Warren Buffett meeting with Obama to tell him what he thinks of the economy?

What a piece of work, both of them. That they would even listen to criminal Buffett is one slap in the face of the people (don’t buy his BS “tax the billionaires” cover), but that they would tout the President listening to, or acting upon, an obvious special interest party shows blatantly once again that this is a special interest government. I can almost see the strings in that photo.

Tuesday, August 23, 2011

Morning Update/ Market Thread 8/23

Good Morning,

Futures were higher this morning… in fact they were substantially higher, but have since given all the after hours fluff back. The dollar, of course, took a plunge to allow the ramp in equities – the net effect is those in the market get to momentarily sustain their accounts while the rest of the world wallows to support them. It’s a giant inequity in the making, look for more nasty “other events” which are now constantly in motion. Bonds are lower, oil is higher, gold reached an unbelievable $1,915 an ounce before pulling back under $1,900, silver is following, and food commodities are zooming just to add injury to the now obvious insult.

The only economic release today is New Home Sales which is released at 10 Eastern and will be reported inside of today’s Daily Thread.

While on the subject of homes, I want to post an update to the Option-ARM reset chart since we are almost exactly at the peak of Option-ARM resets right now:

These mortgages must reset, and note that rates went down sharply right into the peak. Doesn’t matter, many of those ARMS will reset much higher anyway because of the way they were written (to take advantage of the home “owner”), and those looking to refinance won’t be able to because their McMansions won’t appraise for their loan value. That means more people will fall behind and will simply be unable to keep their payments going, thus further injury to the fraud/fluff banks.

Still, reaching the peak in resets means that a very heavy anchor is about to get lighter very quickly – and that will mean that the housing market will at least begin not to have the crush of ever increasing inventory. This will take time, don’t look for an immediate turn around, just that the pressure will begin to ease.

Let’s take a moment to assess the situation in Fukushima. It’s as ugly as ugly gets, the product of special interest pandering, unchecked growth, and greed, this should give tremendous pause to any nuclear advocate and yet here in the U.S. we are talking tough about coal, not nuclear despite the fact we have many vulnerable plants with waste stacked monumentally high. In the following video Arnie Gunderson once again rationally updates you on the situation:

New Data Supports Previous Fairewinds Analysis, as Contamination Spreads in Japan and Worldwide

We all need to get REAL folks, and stop supporting the criminals who brought this mess to you.

Monday, August 22, 2011

Morning Update/ Market Thread 8/22

Good Morning,

Equity futures are soaring… after tumbling more over the weekend. No, I won’t offer up some lame reason, I will simply remind that these “markets” are not real, they are a computer simulation designed to separate you from the fruits of your productive efforts, if any such efforts still exist. Of course the dollar must be giving up purchasing power for that to happen, bonds are lower, oil is higher, gold reached just under $1,900 (!!!) an ounce before pulling back, silver is zooming as well, and at this rate it won’t be long before than $17 hamburger costs $50.

The Chinese came right out and said it to Joe Biden – basically that we are in process of defaulting by devaluing our money, but that at some point in the future America will default on her debts. Yep, welcome to reality – I guess they really do teach math better over there.

The July Chicago “Fed’s” National Activity Index came in at -.29, this is better than June’s -.60. Remember two things about this; one is that it comes from the “Fed” and therefore is as real as the stock market activity; and two, is that the productivity cliff dive came in August, so next month’s reading should be interesting. Here’s Econodon’tknow:
Growth remained below historical trend in July but only slightly. The Chicago Fed's national activity index improved to minus 0.06 from an upwardly revised minus 0.38 in June (minus 0.46 first reported). The improvement is led by a plus 0.28 contribution from production-related indicators, well up from a very slight plus 0.03 contribution in June. Employment-related indicators came in at plus 0.05 vs June's minus 0.10. Consumption & housing was minus 0.33 in July, barely changed from minus 0.34 in June. Sales, orders & inventories are a negative in the month, at minus 0.06 vs June's plus 0.03.

The three-month moving average improved sharply in July, to minus 0.29 from minus 0.54 (upwardly revised from minus 0.60). Improvement in this report is of course welcome but whether it will extend into this month is uncertain given that July's strength is concentrated in manufacturing where early indications for August, that is from last week's Empire State and Philly Fed reports, are decidedly weak.

Huh? Did that make any sense whatsoever to you? If you don’t really know what you’re talking about, then the economic experts resort to the time-tested method of “Baffle ‘em with bullshit.” That, of course, is the favorite tool of almost everyone surrounding the markets and finance in general.

The economic data is fairly light this week, with housing data, consumer sentiment, and Q2 GDP revision later in the week.

The NASDAQ created an inverted hammer on Friday, and that was mirrored on the VIX. Below is a daily chart showing that hammer, whenever you see one like that you should be thinking reversal and it looks like we now are getting confirmation:

What will the markets do from here? Who cares? If you are smart, you will not contribute to the criminals and their enterprises, and you will instead look for REAL opportunities to put your money to work with real people who are doing real things.

Bill Still created an excellent video this weekend that should go viral because he is 100% correct: