Wednesday, January 18, 2012

Morning Update/ Market Thread 1/18 - Narcissistic Fantasy Land Edition…

Good Morning,

Equity futures are about even this morning as the IMF begs for half a trillion more. This is all fantasy, of course, as the IMF acts as if it is getting actual money from other countries, but in fact all of it is just created for the charade (please tax your people and then pay it back in gold, thank you). Bonds are higher (as if there’s actually any room up there), the dollar is lower, oil is flat, gold & silver are off a little, and food commodities are being drawn back down to that very large H&S neckline.

Meanwhile, way out on the fringes of Narcissistic Fantasy land, the morally challenged Mortgage Broker’s Association continues to crank out wild numbers with as much meaning as a fist full of IMF loans. Get this, not a typo, their one week supposed gain in the Purchase Index is 10.3%! And if that’s not crazy enough, the claim is that in one week the Refinance Index jumped 26.4%, moving the Composite index up 23.1%! In just one week! LOL! Now, you could say that it’s just unadjusted noise, but that is not the case. The nut jobs at the MBA intentionally no longer release the actual figures and only report this noise in order to make following their trail more difficult, and to intentionally deceive the public. The truth, of course, is that all these figures are at or near modern day lows, certainly not jumping 23%+ in the span of one week. Completely worthless is an understatement, and the MBA are the poster boys for what should be future legislation prohibiting unaudited self-reporting of major economic data. Here’s Econostupid:
An adjustment for New Years Day clouds what are enormous weekly gains for mortgage application data. The purchase index jumped 10.3 percent in the January 13 week to recover recent losses with the index back to where it was in mid December. The four-week average is up 2 percent. The refinancing index rose 26.4 percent and returns to its best level since August. The four-week average for refinancing is up 7 percent. Rates keep moving lower with the average 30-year conforming loan at 4.06 percent, down five basis points in the week. Next data on housing will be the monthly housing market index later this morning at 10:00 a.m. ET

Not calling them out is complicit.

The total trumped up PPI came in at -.1% for December. Less food and energy, which obviously nobody needs or uses, it was .3% positive. Year over year it is still hot, but vastly understated, coming in at +4.8%, which is down from +5.7%. This data too, is losing its meaning – people should be screaming about these levels, much less the actual levels that are at least twice as high as reported if not three times higher:
At the producer level in December, inflation was tugged down by gasoline and food costs but the core was warmer than expected. Producer prices edged down 0.1 percent after rebounding 0.3 percent the prior month. The latest number posted lower than market expectations for no change.

By major components, energy declined 0.8 percent, after nudging up 0.1 percent in November. Within energy, gasoline fell 2.3 percent, following a 0.1 percent dip in November. Food cost inflation eased to a 0.8 percent decline after jumping 1.0 percent the month before.

At the core level, the PPI firmed 0.3 percent after rising a modest 0.1 percent in November. A big part of this acceleration was due to reduced discounting for motor vehicles by dealers. Leading the core up were passenger cars, light trucks, pharmaceuticals, and tobacco.

For the overall PPI, the year-ago rate in December was 4.8 percent, compared to 5.9 in November (seasonally adjusted). The core rate in December edged up to 3.0 percent from 2.9 percent the month before. On a not seasonally adjusted basis for December, the year-ago headline PPI was up 4.8 percent versus 5.7 percent in November. The core firmed to 3.0 percent from 2.9 percent on an NSA year-ago basis.

Impossible math, even at these under reported rates. The waves move up and down, but the overall trend is the destruction of value and loss of confidence in your “money” (debt).

Industrial Production numbers improved and were better than expected, coming in at .4% in December, up from the -.2% in November. Again, these figures are closer to money production than to actual production of goods, as these production figures are first measured in dollars and then incorrectly adjusted for a fantastical rate of supposed inflation. I take a positive number here to mean not falling as fast as it was, oh, and the Capacity Utilization numbers are still crazy low – more like depression numbers, but in this case we’ve been shedding capacity for so long that it’s mind boggling that it’s still so low. Here’s Econocomplicit, baffling with BS:
Industrial production in December posted a healthy gain but the manufacturing component was even more robust. Overall industrial production rebounded 0.4 percent after dipping 0.3 percent in November. The latest number came in slightly lower than the consensus forecast for a 0.5 percent jump. By major components, manufacturing made a 0.9 percent comeback, following a 0.4 percent drop in November. The market median forecast for the manufacturing component was for a 0.5 percent gain. Econoday has added this component to its consensus forecasts. In December, utilities fell 2.7 percent while mining output expanded 0.3 percent.

Within manufacturing, durable goods rose 0.9 percent in December. Wood products, primary metals, and machinery registered gains of more than 2 percent. Some weakness was seen in nonmetallic mineral products, aerospace and miscellaneous transportation equipment, and furniture. Nondurable goods advanced 0.8 percent in December. Textile & product mills, petroleum & coal products, chemicals, and plastics & rubber products all gained 1.0 percent or more. Paper and apparel & leather fell.

Overall capacity utilization rebounded to 78.1 percent from 77.8 percent for November. Market expectations were for 78.1 percent.

The manufacturing sector appears to have regained some momentum and it is broad based.

The traditional non-NAICS numbers for industrial production may differ marginally from the NAICS basis figures.

Speaking of whatever, TIC Data (Treasury International Capital) for November came in with a big increase that Econocomplicit attributes to flight to safety to the U.S.. I think all the numbers that come from the Treasury or the Fed are garbage designed to throw people off the trail of their swaps, money printing, and backroom deals. Literally not worth the paper it’s printed on, it’s all Narcissistic Fantasy Land to me.

I, Nathan Martin, no longer consent to the lies.