Morning Update/ Market Thread 9/7 - Next President Won’t Have a Clue Either, Here’s Why Edition…

Good Morning,

The HFT hologram that is our markets rose steeply overnight, the current ramp began right on the support level of the current channel that you can clearly see in this daily chart of the SPX:



Along with the bounce off support, the dollar is down a little, bonds are off a little, oil recovered all of yesterday’s losses and some, gold & silver are down pretty substantially with gold possibly having put in a small double-top, and most food commodities are higher.

The only data to report this morning comes from the morally bankrupt Mortgage Broker’s Association where the current claim is that Purchase Applications rose .2%, but the Refinancing Index fell by a supposed 6.3% in the week prior. Their data is not trustworthy, here’s Econoday:

Highlights
Low rates aren't boosting demand for refinancing or home purchasing, according to the Mortgage Bankers Association whose refinance index fell for the third straight week, down 6.3 percent in the September 2 week, with the purchase index up only 0.2 percent to hold near record lows. The 30-year mortgage rate, down nine basis points in the week to 4.23 percent, is near the record the low of last October. The 15-year rate, down eight basis points at 3.41 percent, is at a record low. This report offers very timely indications on the housing market as will this afternoon's commentary in the Beige Book.

Right, can’t wait for the mysterious “Beige Book” to talk, as if anything the “Fed” mutters ever has any ring of truth to it.

Boy, that Mitt Romney really got out in front of Obama with his “59 Step” program to fix the economy, LOL. A picture of the Joker just popped into my head while Romney's "Obama hasn't a clue" words reverberate through cyberspace. No wait, a circus tent full of clowns might be a more fitting visual. None of his points are on target, none. It was the same with every President in recent memory – none can truly tackle the impossible math of debt.

Why? Because it is that very debt that is their power base.

Let that sink in for a minute… it's a very important statement.

Follow the money and you’ll find that private banks charge interest on loans made to the government to cover deficit spending – they do so through the bond and treasury markets. Where did the money they lent come from? It came from nothing – they created it from thin air in order to “purchase” that debt and then charge you interest.

Do the private banks have any incentive for the government to rein in deficit spending? Of course not, they profit from it!

They then take that money, and other money created from nothing, and use it to finance the campaigns of every swinging dick with half a brain who wants to run for President. Their financing creates the strings that control the puppet who perpetuates the current central banker paradigm. Any candidate who does not support that paradigm doesn’t receive the financing and thus is not electable in what has become a billion dollar made for television fluff drama.

And that’s why the impossible math of debt is the very power base that gives rise to more of the same idiocy. Just a slightly different foul aroma – this one spewing forth very weird religious undertones and other self-professed self-deceptive “moral high road” proclamations.

Whatever, I will personally do whatever I can to break this sick and perverted chain of puppetry, that starts by refusing to participate in their charade. Since the power base is the bond market, that is the place that should be receiving no support from the people. Not that it matters, because the banks are now so fully in charge that they have been allowed to print money from nothing to keep that power base from collapsing.

And thus we circle back around to the fact that the power base isn’t coming down without major league “other events” occurring. Occur they will, they are in progress at this time and the pace is exponential keeping time with the rise of the impossible exponential math.

Prior to the last election I stated that it doesn’t matter who the puppet is, they will have a very rough time because of the economy which will refuse to truly heal. Double so for the next puppet.

Morning Update/ Market Thread 9/6 - Still More Fallacious Thinking Edition…

Good Morning,

The markets are taking a beating this morning with European futures markets taking center stage over the weekend with huge declines. Our markets are going to open down more than 200 points, the dollar is rising sharply while the Euro falls, bonds are scrambling to new highs, oil is falling, gold reached another all-time high of $1927.40 before pulling back, silver surprisingly is lower, and unfortunately food commodities are holding steady in their orbit around planet inflation.

The Non-Manufacturing ISM is released at 10:00 Eastern this morning, we’ll report that inside of today’s Daily Thread. The rest of the week has very light data, the highlight of the week, of course – oh boy, can’t wait – is the President’s speech on jobs. UGH!

Every week the markets “wait” on another worthless speech – either from Wrong Way Bernanke, or from his minions, or from the central bank’s other lackey, Obama. Nothing they say can change the fact that their actions are disconnected from the impossible math reality. Here’s a quick lesson for the Haaarrrrvaaarrrdd and Crowlumbia crowd – for free, no megastudent loans necessary.

Prior to reaching the debt saturation point adding credit money into the economy works to create growth and jobs. After reaching the macroeconomic debt saturation point, however, adding credit money to the economy works as an anchor to REAL growth and destroys jobs.

What more do you need to know? The math at the saturation point is impossible – but now we’re way beyond the saturation point and the math is so far beyond impossible that there is simply no way, NO WAY, that our politicians can create the necessary change to right that impossible math while maintaining the status quo of having the central bankers in charge of creating our money. The central banker box that they created, their system of privately financing public debts, is going to come to an end – it must, the impossible math demands it. The zombies simply still don’t want to admit that they’re dead – zombies never do.

So puppet Obama will get up on stage and he’ll look pretty, he’ll have the teleprompters all loaded with his overlord’s smooth words, and he’ll stand up and deliver a speech that any non-thinking person can probably agree with. But for those who can actually ‘do’ math, they will realize that when a nation is saturated with debt, that creating large governmental make-work projects that the only “infrastructure” you’ll be left with is the paper chain of forever debt servicing and forever debt servitude.

What I’m saying is that any action he creates within the central banker paradigm will only add to the impossible math and make the underlying problem worse, not better. Sure, the government can hire 100 million people tomorrow, and you’ll see a huge tick up in employment, but your nation will only be that much deeper in debt when it’s time to make the payroll.

And no, taxing more from government workers isn’t the solution, it’s laughable. Watching the news has become a laughable comedy act, like last night watching some Congresswoman call for beating up the “overpaid” Postal employees. Like the employees are the reason the Post Office dug an $8.5 billion hole in just one year… yeah, let’s take everything away from the employees, tax them some more to boot, while devaluing their money and sending the cost of living to the moon. Oh yeah, that’s quite the economic plan.

Europe’s plan(s) is/are even more ridiculous, the math equally impossible. Just one look at the Greek 1 year says it all:



Again, no solution is possible until the paradigm that is the Central European Bank collapses – then real solutions will be aplenty.

Again with the free advice… send the central banking perpetrators to prison, take back the power to create money to Congress (the people’s representatives), end the process of creating national debt, separate special interest money from government, and unsaturated the saturated economy – I recommend following the procedures found within the outline of Freedom’s Vision, or some variant thereof that restores the natural rule of law.

Until then my forecast calls for major league “other events” and fluff unreal markets that expose themselves as such. Best of luck, we’re all going to need it as long as the crazies are running the asylum…

Weekend Open Thread...

Morning Update/ Market Thread 9/2 - Lack of Labor Day Edition…

Good Morning,

Since the Emperor has already been shown to be wearing no clothes, further proof of that fact supports the need for more of the same? Uh, okay.

Stocks were already diving overnight, but then tumbled on the release of the Employment Situation Report which produced headline numbers of ZERO Nonfarm Payroll jobs, while the rate stayed at a supposed 9.1%. Of course we know better, the true numbers rival the Great Depression numbers, those falling for the massaging of the numbers are simply central banker dupes.

In addition to stocks plunging, bonds are zooming, the dollar is down, oil is down, both gold & silver are zooming, and food commodities are lower. Again, this action shows the truth (except for the bond market), in that this is a monetary phenomena… it is there that you find the root of the unemployment.

Don’t be fooled by the talk of gold backed money, remember the “Roaring Twenties?” They roared despite being on a gold standard at the time. What really matters is not WHAT backs your money, but rather WHO controls its production.

Can you see the following conversation?

“Gee, Mr. President, what number for NFP would be the right number to sell your special interest proposed ‘jobs package’ without causing unnecessary alarm amongst our contributors?”

“Uh, well, how about zero?”

“Oh snap! Good choice, Mr. President. I’ll get the boys right on that!”

Of course they aren’t even bright enough to come up with something convincing. A zero, EXACTLY, number? Come on, do they think we are all stupid and no one knows how to do math? Look, the odds of producing that number dead on are extremely long if you are in fact using any form of scientific method to gather your data. To me this joke of a number is further proof that none of it is real anymore. Sorry, but while I was born at night, it wasn’t last night. Some advice for the clowns… next time at least fake it a little more cleverly.

Here’s Econogullible’s spin:

Highlights
Apparently, the recent federal debt ceiling debate fiasco and stock market decline spooked businesses to put a hold on hiring. Payroll jobs were unchanged in August, following a revised 85,000 increase in July, and revised 20,000 in June. The market consensus (updated Thursday afternoon) called for a 60,000 increase for the latest month. Revisions for June and July were down net 58,000. As in recent months, private sector employment was a little less weak since government jobs pulled down the total. Private nonfarm payrolls edged up 17,000 in August, following a 156,000 gain in July and 75,000 increase in June. The August figure came in sharply lower than the median estimate for a 75,000 increase.

In the private sector, goods-producing jobs edged down while service-providing jobs rose modestly. Goods-producing jobs slipped 3,000, following a 52,000 rise in July. Manufacturing jobs dipped 3,000 after a 36,000 boost the month before. Construction employment declined 5,000 after increasing 7,000. Mining expanded 6,000, following an 8,000 gain in July.

The public sector continued to contract as government employment fell 17,000, following a 71,000 drop in July.

Earnings growth fell back from the auto-sector induced jump in July. Average hourly earnings slipped 0.1 percent after jumping 0.5 percent in July. The market median estimate was for a 0.2 percent increase. The average workweek for all workers in August edged down to 34.2 hours from 34.3 in July. The consensus had called for 34.3 hours.

From the household survey, the unemployment rate posted at 9.1 percent, equaling the prior month and expectations.

Today's report clearly shows that momentum in the labor market has stalled. The curiosity is that while hiring has come to a standstill, layoffs have not picked up. Still, today's news is not good news for the economy and places more emphasis on the importance of President Barack Obama's upcoming plan for job creation and on whether the Fed will engage in QE3. The odds of another round of quantitative easing just went up.

Uh, huh. Catch that last part? Guarantee you that pretend conversation above is not that far off the mark. Are you scared enough yet to support more pathetic special interest rob you policies? Disgusting to watch the charade.

Here’s the entire phony report from the BLS which, when the fall of Rome occurs, will hopefully be replaced with a real agency that works in reality instead of political kabuki land:
Employment August 2011

When looking under the hood of this report, there is nothing but troubling numbers to be found. For example, in just one month the number of part time workers rose by 400,000. In order to produce zero job growth then, that must mean that 400,000 full-time jobs no longer exist, right? Oh, and last month’s number were revised sharply lower too. And that’s the truth about what’s happening, discourage workers are no longer counted, and those that still have jobs have either taken large pay cuts or are working part-time. The true statistics are being masked by manipulating who is counted in what category. The truth can be seen clearly in the following three charts which I’m surprised the “Fed” still makes available. The first one is the Civilian Employment Population Ratio – it clearly shows that all the fluff jobs created by financial engineering are now gone, as in all of them. Take a look at the time frame of expansion, and then how contraction coincides with reaching the debt saturation point:



The second chart shows the Mean Duration of Unemployment. Unbelievable that this chart doesn’t receive more attention. Again, the creation of debt via all forms of financial engineering works to add jobs until the debt saturation point is reached, but from that point forward the addition of more debt works to destroy jobs and real productivity:



And finally, despite the fact that our population has doubled since WWII, today we employ fewer people total in Manufacturing than we did in the year 1942!



Sick. And if you like that, then keep supporting the current paradigm until you, too, are either no longer employed or become “under-employed.”

Turning back to the BLS’s report, we see on the “Alternate Table” that U-6 unemployment, the one most closely resembling numbers of the past, remains stubbornly above 16%, with the seasonally adjusted number rising from 16.1% to 16.2%:



The phony “Birth/Death Model” created another 87,000 phony and nonexistent jobs:



Amazing that with all their “models” that ZERO would be their overall number. Yeah, that’s the ticket.

Shadow Stats knows what's real and what's not. Note that his number is still trending up while .gov numbers are trending down. He believes real unemployment is closer to 23% than it is to 9%.



Since we’re discussing things that aren’t real, might as well look at the “markets.” Below is a four hour chart showing a large rising wedge. The Elliott wavers are thinking that may be a wave 4, if the bottom boundary is broken then wave 5 down will likely be underway:



Please, oh please, won’t you give me some more QE? Of course this is clearly showing the root problem of WHO it is that’s in control of producing the money. The private banks are currently in control, so all forms of bailout benefit them while leaving the vast majority of others in the dirt. This will not change until the people take back control of that privilege that rightly belongs to everyone equally. That’s the root of the problem, just so that we can get down to what’s really wrong.

Morning Update/ Market Thread 9/1 - Sailing into the Mystic Edition…

Good Morning,

Equity futures are flat to down slightly this morning with the dollar rising a considerable amount, bonds are up a little, oil is hanging out at the still hurt locker level of $88.80 a barrel, gold’s hanging out at $1,825, silver is flat, and food commodities are also close to even.

The market is entering pretty stiff resistance in and just above the current area. On the SPX Daily chart below you can see that we are now at the 50% retrace level, approaching a rapidly descending upper Bollinger Band, just beneath an also down slopping 50DMA, and also just beneath a major long-term upslope line:



Weekly Jobless Claims once again remain stubbornly above 400k, coming in at 409,000, this is down from 417k last week, of course revised higher to 421k. In short, nothing to see but an ongoing depression here – just remember the old saying about it being a recession to those who have jobs, but to those who don’t it definitely feels like a depression:

Highlights
Initial jobless claims are trending sideways pointing to no significant improvement in the labor market. Initial claims did fall 12,000 in the August 27 week to 409,000, but the improvement is offset in part by a 4,000 upward revision to the prior week to 421,000 which is the highest level since mid July. Showing no improvement from a month ago is the four-week average which at 410,250 is up for the second week in a row and compares against 408,250 at month end July.

Continuing claims fell a slight 18,000 in data for the August 20 week to 3.735 million with the four-week average, down 3,000 to 3.726 million, trending flat for the last two months. The unemployment rate for insured workers is unchanged for the third week at 3.0 percent.

The Labor Department said there were no special factors in the latest report and specifically said there was no impact from the strike at telecom provider Verizon. For tomorrow's employment report, this report is unlikely to narrow expectations which range widely from a small contraction to a moderate gain.

Second quarter Productivity was revised downward to -.7%, while at the same time Labor Costs rose 3.3%, the worst of both. Of course I believe that actual productivity is far, far lower than reported, that’s because inflation is underreported, thus making productivity that’s measured in dollars artificially high. Also GDP counts the production of debt, financial engineering, as being “productive,” so it’s all complete mystic nonsense, and really that’s the giant disconnect from reality that has become the “economy.” At anyrate, most people can’t deal with the reality, and so they speak in the Mystic without realizing it. Oh, speaking of which, here’s Econoday actually not pumping for a change:

Highlights
As expected, second quarter productivity was revised down while unit labor costs were revised up slightly. Nonfarm productivity fell an annualized 0.7 percent, compared to the original estimate of a 0.3 percent dip and a 0.6 percent decrease in the first quarter. The consensus forecast called for a 0.5 percent decrease for the second quarter revision. Unit labor costs rose a revised 3.3 percent in the second quarter, compared to the initial 2.2 percent and first quarter's 6.2 percent. The drop in productivity reflected a revised more sluggish rise in output of 1.3 percent, compared to the initial estimate 1.8 percent and a first quarter rise of 0.9 percent annualized. Hours worked were unrevised up 2.0 percent.

Compensation grew an annualized 2.7 percent in the second quarter (originally 1.9 percent), following a 5.6 percent jump in the first quarter.

Year-on-year, productivity was up 0.7 percent in the second quarter-down from 1.2 percent in the first quarter. Year-ago unit labor costs came in at up 1.9 percent in the second quarter, compared to a rise 1.4 percent in the prior period.

Today's revisions are a reminder that the economy is soft (sluggish output) and that businesses likely see labor as expensive, reducing the incentive to hire.

The Manufacturing ISM and Construction Spending for August are released at 10:00 Eastern. I expect these to be not pretty, we’ll see, please join us in the Daily Thread as we head into the Mystic for a discussion on their release.