Saturday, September 10, 2011

Weekend Open Thread...

Friday, September 9, 2011

Morning Update/ Market Thread 9/9 - “Other Events” Will Produce Change Edition…

Good Morning,

Markets are tumbling once again today, the dollar is rising strongly, the euro is falling, bonds are rising, oil is down, Gold & Silver are down, and food commodities are holding their elevated position a little too stubbornly.

The big plan out of the President was rumored to be $300 billion, then it became $400 billion, then $447 billion… Whatever, it’s simply more of the same with no real way to pay for any of it. The pace of number expansion, while huge, is meeting stiff political resistance making the odds of actually seeing this pass much lower than the $700 billion TARP. Note that the emergency atmosphere isn’t anywhere near the point of TARP passing with threats of end of the world and Paulson water boarding politicians Dick Cheney style. No, it’s going to take a much greater emergency to get this passed, and the truth is there are actually parts of it that would be much more effective than just giving taxpayer money to the banks – not that I’m saying it would be effective, but at least you might get a school renovation or two out of it before the empire collapses.

And collapse it will – all exponential things collapse, and we are defined by our money.

Speaking of money, yesterday the update to M2 was released showing that it had grown by another $30.4 billion in just the past week. Note that since 1980, only 30 years, that M2 has expanded 6.3 times what it was. That amounts to a non-compounded annual rate over 31 years of “growth” (inflation) of 20.4%:

Just look at the effect on the Money Multiplier – all by itself this chart is telling you that debt saturation has occurred. The Multiplier and Velocity diminish because new money must be used to service the debt and therefore does not circulate, it simply returns back to the bank to service prior loans:

And when you look at the Monetary Base, it has risen about 13.5 times since 1980, equaling a non-compounded 43.5% rate per year over the past 31 years. Oh yeah, the “Fed” is all over that stability mandate:

But the Debt Saturation becomes very clear when you look at the base money and overlay the Mean Duration of Unemployment over top. The correlation cannot be denied, and I’m sure that if the basic unemployment statistics weren’t so skewed that they, too, would match these charts:

As I’ve been saying for years now, the math is impossible, it is growing exponentially, and all exponential systems collapse. This one will be no different, the physical world demands that it happens, you cannot fool math nor Mother Nature with financial engineering and accounting fraud – at least not forever.

And thus it’s safe to say that “other events” are coming. Are you scared? The boogyman ghost of 9/11 is threatening you know! Better spend a few hundred billion more that you don’t have. Maybe a few more false pretense wars for good measure, yeah, that’ll save us all.

Those who know what’s real and what’s not are not scared. They do not participate in the criminal’s “markets.” They don’t hang out on Wall Street. But those nasty “other events” can and will affect us all, that’s why in the end it will pay for those who got real.

Those “other events” are well in motion if you are paying attention. Of course Europe is crumbling with “other events” spinning out of their impossible math tornado, and as I look at my local county newspaper this morning, it is running a headline that reads “Officials chase unconfirmed al-Qaida bomb plot.” Not only that, but there’s another article discussing how 500 Longshoremen in Longview, Washington are resorting to their own "other events:"
Early this morning in Longview, hundreds of Longshore workers stormed the port, overpowered security guards, damaged rail cars and dumped grain at the center of a labor dispute that has spread to other ports in the state, officials said.

Six guards were detained for a couple of hours after 500 or more Longshoremen broke down gates about 4:30 a.m. and smashed windows in the guard shack, said Longview Police Chief Jim Duscha.

No one was hurt, and nobody has been arrested. Most of the protesters returned to their union hall after cutting brake lines and spilling grain from a car at the EGT terminal, he said.

When was the last time you heard of wildcat strikes that included kidnapping guards? Evidently this storming of the facility was in response to seeing their labor union leader being hauled off by police who are doing the dirty work of management – and don’t even realize how they are being used. Sounds kind of like the 1930s, doesn’t it? There are a lot of parallels, only this time it’s far worse – the math was fixable then, it is no longer, at least not within the central banker box that we’ve all lived our lives in. A new box is coming.

Thursday, September 8, 2011

Morning Update/ Market Thread 9/8 - How to Bankrupt a Nation Edition…

Good Morning,

Of course you can’t have stocks higher and a good Jobless Report on the day the President is going to announce that he’s wasting $300 billion more of your future productive efforts – which by the way, amounts to $967 for every man, woman, and child in the united states. Family of four? That’ll be $3,868! Do you have it? How many families in the United States don’t have it? And remember, this is just the latest “great thinking” in how to “stimulate” our already debt saturated economy.

Next questions. When the government spends your money to “create” jobs, has it really created any jobs at all? Does money spent by the government really add to “production” and should it be counted in the GDP, especially when it’s done on credit? Oh yeah, where is the “money” coming from? Who profits from the interest on that money?

Yesterday’s 275 point rally? That’ll be $1.1 billion per point. Oh wait, it’s something more than that now.

And since the last $16 TRILLION or so, probably more, didn’t do a thing, are the people really gullible enough to believe that this will accomplish anything? The mainstream “experts” seem to think its “better than nothing,” and it will “stimulate the economy,” and too bad it’s not MORE. Oh, and the other take is that while the last “stimulus” wasn’t enough, it still worked to “create jobs,” even though there hasn’t been a single job added in the United States in well over a decade now.

Did it really “save” jobs? The answer is NO. Not only did the stimulus not save jobs, it is destroying jobs. Since we are way past macroeconomic debt saturation, the addition of more debt means more principal and interest that must be carried at the expense of real productivity and real jobs.

So, if you really want to bankrupt a nation, the United States has produced the perfect playbook. We were actually bankrupt quite some time ago, now we’re just step by step devaluing our money while we wait for “other events” to fully progress into the actual change that’s required to free our nation from the grips of criminal enterprise. The upcoming “election” won’t be it.

Oh, and if you want another example of how stimulus doesn’t work, just look at Japan were the Yen is worth next to nothing and where equipment orders continue to plunge while they wallow in their radioactive remnants.

Meanwhile, Weekly Jobless Claims continue to indicate that not only are we not adding jobs, but we are still shedding them even after years of that being the case. For the last week they rose from 409k up to 414k, a 5k weekly rise that econocomplicit calls a 2k rise since the previous week was revised higher once again. By the way, if you think the way these numbers are massaged is bad, you really don’t want to look at supposed corporate “earnings.” Let’s just say that “mark-to-model” is a great euphemism for the word “fraud,” and that’s just the tip of the fraud iceberg:
Jobless claims continue to hold steady, up 2,000 to 414,000 in the September 3 week (prior week revised 3,000 higher to 412,000). The latest gain and the prior revision are however going in the wrong direction, lifting the four-week average 3,750 to 414,750 which is nearly 9,000 above the month-ago comparison. The Labor Department said Hurricane Irene did not affect the data though it does expect a small 2,000 to 5,000 upward revision for the September 3 week. Four states had to be estimated due to Labor Day.

Continuing claims fell 30,000 to 3.717 million in data for the August 27 week with the four-week average up 6,000 to 3.735 million. The unemployment rate for insured workers, which has been edging back and forth between 3.0 and 2.9 percent since February, is at 3.0 percent for the fourth straight week.

The steady rate of jobless claims does not point to optimism among employers which, also based on payroll data, remain reluctant to expand their workforces. Watch for comments later today on the jobs market from Federal Reserve Chairman Ben Bernanke.

Nice sell for the upcoming theft of another $300 billion. If you have a job, I hope you have a few thou laying around to pay for it (Don’t worry, they won’t actually ask you for it, they’ll just devalue your purchasing power instead and you can make installments on it every time you fill up your tank or go to the store to buy your family some food.).

International Trade figures are out for the month of July – the pre-cliff month. The trade deficit narrowed, oh boy only $44.8 billion(!), primarily due to the fact that the price of oil was in free-fall for a good portion of the month. In fact, oil began the month at $100 and finished at about $85 with sojourns even lower. Again with Econohype:
Exports rebounded smartly in July, leading to a better-than-expected trade gap which narrowed to $44.8 billion from $51.6 the month before (originally $53.1 billion). The July trade gap was narrower than the consensus forecast for $51.9 billion. Importantly, exports rebounded 3.6 percent after dropping 2.2 percent in June. On the flip side, imports slipped 0.2 percent in July, following a 1.1 percent decline the month before.

The smaller trade gap came from shrinkage in all three major components. The improvement in the trade gap was led by the petroleum gap which shrank to $25.6 billion from $29.4 billion in June. The nonpetroleum goods gap also narrowed-to $34.1 billion from $36.6 billion the prior month. The services surplus grew to $15.8 billion in July from $15.5 billion the month before.

Looking at end use categories for goods, exports surged 4.8 percent while imports declined 0.3 percent in the latest month. The increase in exports was led by a $2.7 billion jump in industrial supplies, with increases also seen in capital goods excluding autos (up $2.2 billion) and automotive (up $1.3 billion). Modest declines were seen in consumer goods (down $0.6 billion) and food, feeds & beverages (down $0.1 billion).

The dip in imports by end use categories was led by a $2.5 billion drop in industrial supplies ($2.2 billion from crude oil). Food, feeds & beverages declined $0.3 billion. Import gains were seen in automotive (up $2.9 billion), capital goods excluding autos (up $0.3 billion), and in consumer goods (up $0.1 billion)

On a not seasonally adjusted basis, the July figures show surpluses, in billions of dollars, with Hong Kong $2.3 ($2.4 for June), Australia $1.7 ($1.4), and Singapore $1.2 ($1.0). Deficits were recorded, in billions of dollars, with China $27.0 ($26.7), OPEC $11.9 ($13.8), European Union $8.9 ($9.8), Japan $5.3 ($4.0), Mexico $4.9 ($6.4), Germany $4.2 ($4.0), and Canada $3.2 ($2.8).

Today's trade numbers are good news for manufacturers and for third quarter GDP. While today's jobless claims numbers were marginally disappointing, equities should like the export numbers. However, market focus is more on the speech by Fed Chairman Bernanke today and by President Obama on jobs this evening.

Major league Eyeroll please.

A lot of people were asking about “Operation Twist,” which is the next likely “Fed” trick. What “Twist” does is simply falsely and fraudulently shift short term low interest debt into longer term higher interest debt. Total debt still the same, although I can guarantee you that if you could really do the accounting it won’t as they’ll use their slight-of-hand moves to distract you. It will accomplish only delaying the inevitable, but it may not even accomplish that. In fact pretty sure it won’t. And don’t count on longer term rates coming down as they say, I call BS. What I think will actually happen is they will simply “use short term debt to buy long term debt,” and then on the back end they will refill, and refill, and refill the short term debt. In this manner they would be QEing still more, with the difference being they would be using the proceeds to buy down rates on the long end. In short, I think it will amount to more money printing and more deception, with a harder trail to follow, not that you can actually follow their trail now.

Remember, it is the bond market that is their power base, they are doing anything and everything they can in order to keep their house of cards from collapsing. It has already collapsed in reality, again we are just waiting for the “other events” to fully materialize.

Another “Stimulus,” another failure…

Wednesday, September 7, 2011

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:
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.

Tuesday, September 6, 2011

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…