Saturday, January 21, 2012

Weekend Open Thread...

Trial Balloon floated ?

NEW YORK - The owner and publisher of the Atlanta Jewish Times, Andrew Adler, has suggested that Israeli Prime Minister Binyamin Netanyahu consider ordering a Mossad hit team to assassinate U.S. President Barack Obama so that his successor will defend Israel against Iran.
Adler, who has since apologized for his article, listed three options for Israel to counter Iran’s nuclear weapons in an article published in his newspaper last Friday. The first is to launch a pre-emptive strike against Hamas and Hezbollah, the second is to attack Iran’s nuclear facilities and the third is to “give the go-ahead for U.S.-based Mossad agents to take out a president deemed unfriendly to Israel in order for the current vice president to take his place and forcefully dictate that the United States’ policy includes its helping the Jewish state obliterate its enemies.”
     First , i posted the link - not just so everyone could read the entire article , but so it could be clear the source was a leading newspaper of Israel - not a far fringe speculative blogspot. Second point , at a time when relations between the US and Israel are at a nadir , the idea this has been floated seems like curious timing. Third , we can feel some type of other event is in the offing - apart from being on Carrier transit watch , one has to consider an other event of some type closer to home. Fourth , in era where useful idiots can be influenced to do horrible things , the timing of this again seems curious. Fifth , the Op Ed was penned on January 15th - the same day the joint US - Israel Austere Challenge 12 was postponed and just days before General Dempsey was scheduled to travel to Israel for critical talks concerning Iran - again the timing is curious. stay tuned for other events and don't be surprised what or where they may occur ! 

Happy Saturday - Pondering The End Of The Dollar Based Global Trading System !

Asian Nations Start Currency Reforms to End their Use of Dollars

On December 25, 2011 it was reported that the world’s second and third largest economies will open currency swap lines in a move to side-step the U.S dollar and conduct trade in their own currencies. In a meeting between Japanese Prime Minister Yoshihiko Noda and Chinese Premier Wen Jianbao they officially announced their governments' intentions to conduct bilateral trade in yuan-yen without using U.S. dollars. The Japanese government said direct yen-yuan settlement should reduce currency risks and trading costs. Japan also announced it will start buying Renminbi bonds to hold as a reserve currency.
China and Japan, long time adversaries who disagree on most issues with regards to foreign policy can agree on one thing…to stop using dollars. Japan also topped off a busy week by signing a currency swap agreement with India with the same stated goal of moving bilateral trade between the two countries out of the USD.
     Fascinating the above news item was announced on December 25th - a perverse Christmas gift one might cynically say !      But rather than a radical break , this just represents a trend that includes Russia and China trading with Iran in currencies other than the dollar. And just yesterday , india announced it would buy oil from Iran in rupeees - so much for following the West's oil embargo demands !
     The move away from the dollar mirrors a similar trend we have seen - the fleeing of investors from stocks as the game has begun to viewed as rigged beyond rational participation. Stock volumes ex HFT trading have been dropping over the past 18 months or so ( following the infamous flash crash in May of 2010 ) , retail investors have withdrawn funds from domestic mutual funds over the same timeframe and with the advent of the MF Global debacle for investors - revulsion has moved to the CME as well after all , once bitten , twice shy - losing 1.2 billion in customer accounts has a funny way of making the corruption clear .

     So is it really a surprise to note that during the timeframe where retail investors have fled the broken hovels called markets , that a grand uptick in color revolutions have bloomed . "  MENA " came into the lexicon last year and as the New Year as begun , Syria and Iran adventures stand in the on deck circle - just waiting for their turn at bat. Does the media even discuss the ongoing chaos of Militia rule in Libya anymore , how often do you read anything about the NTC , Is Saif ( Gaddafi captured son ) still alive and who holds him captive again ? When push comes to shove , what will Russia and China do regarding any mass destruction campaign directed toward Iran - how long before we see / read or hear about some type of incident is the Strait of Hormuz? To the last point , recall Iran warned when the USS John C..Stennis left the Gulf at the end of December , the advice from Iran's Army chief Salehi was " I recommend and emphasize to the American carrier not to return to the Persian Gulf.We are not in the habit of warning more than one time. " While a date has not yet been announced , US officials expect the next transit of a carrier to be routine - and they are probably correct. But what if Iran chooses to start a War at the time and place of its own choosing ? Any predictions as to where such an other event might take us would depend the reaction of numerous nations , whose agendas aren't aligned with the West.

    As Iran gears up for its latest Great Prophet exercise in Febuary , let's see if the next Carrier transit occurs during that same timeframe - and then we shall see what happens next ! 

Friday, January 20, 2012

Morning Update/ Market Thread 1/20

Good Morning,

Equity futures are slightly lower, no wait, HFTs must have suckered in all they can… now shooting higher this morning with the dollar higher, bonds lower, oil lower, gold & silver lower, and food commodities slightly higher.

Stocks have now run up to a key long-term resistance line beginning at the ’07 top. Today the DOW sits almost exactly on it, and the S&P 500 is just below it as you can see in the 5 year weekly SPX chart below, heavy blue down slopping line:

I won’t be surprised either way – the markets could turn down from that line, or the criminal element who own the markets and make money from nothing could choose to run futures over that line on the weekend. Truly a casino not worth playing in, as it only enriches those on the wrong side of a proper rule of law.

Of note, the Baltic Dry Index broke through support on its latest plunge, setting a new low from one year ago:


The very conflicted liars at NAR (National Association of Realtors), who like to make numbers up, report that Existing Home Sales for November, NOVEMBER, jumped 4.3% to 4.61 million from 4.42 million, of course the prior month revised lower and besting expectations. Sorry, not a believer for many reasons, completely bogus… huge increases in sales do not occur from the month of October to November, and thus you have number juggling from already admitted number jugglers. Bogus.

Want to hear a self-interest statement from someone so corrupted they cannot speak the truth? I know, all you have to do is turn on your television... but this one is a prize winner:
Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

Then there's this from the NAR President:
NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”

LOL is really all one can say to that. The only true pent-up demand is from people underwater on their mortgages whose only dream is that they could actually sell their home to escape the nightmare that's been foisted upon them. I'd throw them both in prison if I could, and I would certainly prohibit the NAR from making unaudited economic reports on their own industry.

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

News Items From The Would Be Euro Super State - The Trend Is Not Your Friend !

     Good Morning and yes , the trend is not your friend - not in Europe at least !    The push for the Super State is on the move , not pausing for a minute.  Imagine where else bit in a Nanny state where the remedy for breaching a balanced budget rule would be fining the violators - thus pushing the violators further in breach of the rule , right ? Of course , that follows the EU once again beseeching Germany ( and the balance of the not broke yet nations ) to step up their transformation into formally broke ( and broken ) nations ! 
     In response , Germany naturally demurs on rushing to join the formally broken nation Club - its not quite ready to speed up payments for the presently unratified ESM , the current excuse being all participating countries should be onboard first. Not quite what the German finance Schauble said just a couple of weeks ago about Germany bringing its ESM payments considerably - but we know things change ! 
     The focus presently is all Greece , all the time - but keep in mind Portugal is waiting in the wings. the time for its " insolvency " close up " is nearing. Just note the sharp ramp in the borrowing costs for Portugal and the apparent lack of ECB support ( where is that SMP Program to buy some of the debt of Portugal ? ) Get another Troika Team ready for a road show - destination Portugal.
     Finally , as a closing thought , for once Greece Finance Minister Venizelos is right. Now is the critical time for the Final Battle . My questions to the FM - are you aware what War is being fought and who your enemies actually are  ? 

10.51 The EU's highest court will be able to fine any country that does not adopt a balanced budget rule in its constitution with a penalty of up to 0.1pc of GDP, shows the latest leaked draft treaty. That cash would be ploughed back into the ES
09.15 Greek Finance Minister Evangelos Venizelos has been speaking this morning about the negotiations on a debt haircut for private investors and over the next round of bail-out cash.
Not a long statement, by any means, but quite dramatic...
QuoteNow is the critical moment for the final battle.

08.45 There are negotiations aplenty in Greece today, with talks being held with the country's private creditors and the troika, which holds the purse strings on the much-needed bail-out cash.
08.20 Hungary has abandoned its planned merger of its central bank and its financial markets regulator, says PM Viktor Orban. The plan was causing a great deal of conflict between Hungary and the EU.

Thursday, January 19, 2012

" Curses are like a bird that returns again to his own nest !

Stated another way - chickens coming home to roost ! First example is Croatia - why for the life of me would any country - fully observant of the austerity and draconian measures presently imposed upon Greece by the Troika , willing ask why do I sign up for membership ? Well Croatia seems to be willing to take the plunge and their commerce will suffer. Chicken farmers will be the first to see the chickens come home to roost but may find the chickens roosting come from italian producers. and welcome to EU rules and regulations which will increase the costs for Croatian farmers . Yet the Croats still probably will vite yes - I say don't complain for something you've willing signed up.

Thanks to massive propaganda, Croatia is foolishly about to join the EU. Chicken farmers (Croatians in general) are about to pay a steep price.

And how could we miss Greece when considering chickens roosting back at the ole homestead ? While the ongoing imminent conclusion to negotiations  ( maybe Monday they say now ) that have gone on and on for months , chickens may be coming home to those opportunistic hedgies ! As noted in the piece below , the IMF wants the coupon on the new bonds to not exceed 3 percent - well below the interest sought by the IIF ! And at 3 percent coupon ( which would assist Greece somewhat in lightening its debt load - of course the IMF and ECB could REALLY help Greece by throwing their Greek bonds into the haircut pot , but that's not presently on the table .) With hedgies stating they won't settle for a haircut exceeding 50 percent , how does Greece avoid forcing agreement with a Collective Action Clause being retroactively imposed by law ? Well , hedgies might just get to try out that human rights argument , as their gambit to buy bonds and seek full payment might come home to roost !

Late on Thursday Venizelos and Prime Minister Lucas Papademos met again with the head of the Institute of International Finance (IIF), Charles Dallara, for the completion of the agreement.
Sources said Dallara discussed his new proposal that provides for an average interest rate of 4.25 percent for the new bonds Greece will issue to replace the old ones, leading to 68 percent losses in net present value terms for bondholders.
The IIF proposed a coupon of 3 percent for bonds maturing until 2014, 4 percent from 2015 to 2020, and 4.5 percent for after 2020. For the latter, the proposal includes a rate surplus based on the country’s growth rate. Bondholders are also asking for European Union guarantees for the new bonds.
Before his meeting with Venizelos and Papademos, Dallara told journalists that he hoped the negotiations would quickly lead to an agreement.
Bank officials noted that there have been some substantial and in-depth negotiations in the last few days, and expressed their optimism for an agreement. However, they added that for a deal to be reached, the International Monetary Fund and the eurozone, and Germany in particular, will have to accept interest rates that can support the voluntary character of the agreement.
The IMF, sources say, is firmly insisting that the new bonds’ rate not exceed 3 percent, so that the haircut can lead to a substantial lightening of the debt load for Greece.

And in italy , we see chickens coming homeward bound - as italians pay the price for allowing their country to fall under the control of a Troika installed puppet ! How long before Italy falls totally under the control of the Troika - who knows for sure but the chickens are clucking softly in the distance - soon those sounds will be much closer. Petrol shock as service station managers close their stations doors for ten days , meanwhile Troika puppet Monti tries to peddle Austerity chicken pot pie !

Finally , as we count the chickens coming home and wonder which " other event " will occur next , just note that Special Forces Operatives are operating in the gulf - near Iran. In light of the present tensions , various exercise have taken place , planned to occur ( by both Iran and Israel / US forces ) , throwing more tension into a strained situation could be another bunch of chickens walking around clucking..... we can assume Special Forces are in hot spots around the globe - but why advertise this fact ? Be careful what you agitate for is what I suggest.

Tensions between the U.S. and Iran are at a high point, as the Islamic Republic threatens to close off a vital waterway and two U.S. aircraft carrier battle groups sit in the seas off the Iranian coast. But across the Persian Gulf, the U.S. has a previously unacknowledged weapon in reserve: a new special operations team.
Danger Room has confirmed with the U.S. Special Operations Command that a new elite commando team is operating in the region. The primary, day-to-day mission of the team, known as Joint Special Operations Task Force-Gulf Cooperation Council, is to mentor military units belonging to the U.S.’ oil-rich Arab allies, who collectively are known as the Gulf Cooperation Council. Those Arab states consider Iran to be their primary foreign threat.
Chickens clucking all around , looking for their nests. Be vigilant as things are moving faster than they appear.......

Morning Update/ Market Thread 1/19 - FRAUD, Deception, Depression Edition…

Equity futures continue higher this morning with billions in fraudulent “earnings” from Bank of America coupled with fraudulent economic data, they make quite the couple. The dollar is lower, bonds are lower, oil is higher of course, gold & silver are higher, and food commodities bounce a little following yesterday’s losses.

The fraudulent CPI was reported flat for December, here’s Econofraudpusher:
Consumer price inflation was nonexistent in December at the headline and core levels. The consumer price index in December was unchanged for the second month in a row with lower energy costs playing a key role. The December figure was lower than market expectations for a 0.1 percent rise. Excluding food and energy, the CPI decelerated to a modest 0.1 percent increase after gaining 0.2 percent in November. Market expectations were for a 0.1 percent rise.

By major components, energy dipped 1.3 percent after declining 1.6 percent in November. Gasoline fell 2.0 percent, following a 2.4 percent decline in November. Food price inflation firmed to 0.2 percent after rising 0.1 percent the prior month.

Within the core, upward pressure was seen in medical care, recreation, and rent. Declines were seen in used cars & trucks, new vehicles, and apparel.

Year-on-year, overall CPI inflation posted at 3.0 percent, compared to 3.4 percent in November (seasonally adjusted). The core rate edged held steady at 2.2 percent on a year-ago basis. On an unadjusted year-ago basis, the headline number was up 3.0 percent in November versus 3.4 percent in November. The core was up 2.2 percent, matching November's rate.

The latest CPI report continues to give the Fed leeway for continued loose monetary policy. Between favorable jobless claims, housing starts & permits, and low inflation, equity futures are moderately positive.

And here’s John Williams with something a little closer to reality, try tripling the fraud number for starters:

And just look at how the data has diverged since 1980. This divergence is at the root of much of the fraud in economic reporting today. It affects all statistics that are first measured in dollars and then made “real” by correcting for supposed inflation – things like GDP, manufacturing data, retail sales, and so on.

And is there any wonder that with trillions in swap lines, phony money, and massive leverage that both Jamie Dimon and Lloyd Blankfein come out on the same day and basically tell you that markets are going higher? Gee, do they have something they want to sell you, or are they confident in their ability to print? Perhaps herein lays a clue?


There’s your real unadulterated inflation, right there. Sure, “markets” are going to go up… but not nearly as fast as your food and energy costs, so we’ll just ignore those little goodies and report “inflation” without them.

Housing Starts fell to 657,000 in December, a depression era level, from November’s 685,000, a depression era level. Here’s Econofraudpurveyor:
New residential construction slipped in December but remains somewhat healthy after the jump the prior month. Permits are encouraging. Started declined 4.1 percent, after surging 9.1 percent in November. December's annualized pace of 0.657 million fell short of market expectations for 0.678 million units and is up 24.9 percent on a year-ago basis. The dip in the latest month was led by a 20.4 percent drop in the multifamily component, following a 23.0 percent boost in November. The single-family component advanced 4.4 percent after rising 3.0 percent the month before.

By region, the decline in starts was led by a 41.2 percent drop in the Northeast. Other regions showing decreases were the West, down 17.6 percent, and the South, 3.0 percent. The Midwest rebounded a sharp 54.8 percent. Seasonal factors are large this time of year and small unadjusted changes can lead to hefty seasonally adjusted changes.

Homebuilders remain modestly optimistic. Housing permits held steady, nudging down a mere 0.1 percent, following a 5.6 percent advance in November. The December rate of 0.679 million units annualized came in essentially equal to the consensus forecast for 0.680 million. Permits in November are up 7.8 percent on a year-ago basis.

The November ease in permits was led by a 3.7 percent decrease in multifamily permits after a 13.0 percent boost the month before. Single-family permits rose 1.8 percent, following a 1.9 percent increase in November.

Given that November was unexpectedly strong, the December dip in starts still reflects a recent and modest uptrend. And yesterday's NAHB housing market index gain adds to the view of modest upward momentum. Nonetheless, it still appears to be mainly in the multifamily component as the year-ago gain is stronger there-up 78.1 percent versus up 11.6 percent. And there is still plenty of supply for single-family homes.

Okay, “…somewhat healthy?” Really? “…modest uptrend?” Really… when the number is going down?

Why just look at that chart, you could almost spin that into an uptrend, couldn’t you? Well, let’s see you spin this piece of reality into an uptrend:

Housing Starts:

Gee, hard to see the “uptrend” there. Think I’ll stick with depression… unless you prefer ka-splat!

Weekly Jobless Claims dropped by 47,000 to 352,000 in the prior week, following the 399k report that was revised, of course, to 402k. This report is for a holiday week, but is supposed to be seasonally corrected. Personally, I think the bias and fraud inside of these reports is out of control. Still, it takes numbers under 350k to actually show job creation, so at best when taken at face value this is flat. Here’s Econocomplicit:
A very large weekly drop in initial jobless claims offers a splashy, but not definitive, indication of rising strength in the jobs market. Initial claims fell 50,000 in the January 14 week to 352,000 for the biggest drop since September 2005 when economic expansion was in full gear (prior week revised to 402,000). But weekly data early in the year are often choppy, the result of shortened holiday weeks. The 4-week average, down 3,500, points to less strength with the level of 379,000 not convincingly lower than the mid-December level of 380,750.

Continuing claims likewise show huge improvement, down 215,000 to 3.432 million. Here the 4-week average is down 34,000 to a recovery low of 3.576 million. While declines in initial claims point to an easing in layoffs, declines in continuing claims represent a mix of new hirings and new drop outs from the jobs market. The unemployment rate for insured workers slipped one tenth to 3.2 percent.

Today's report is certain to support the stock market, though questions over holiday factors will likely limit its impact. Yet should this improvement hold in next week's report, expectations for strong monthly employment data would really begin to build.

Would you like a side of deception to go along with your fraud, sir? Perhaps a little Prozac for dessert will help with that depression?

The Philly “Fed” Survey is released at 10:00 Eastern this morning.

No, I’m sure there’s never been a better time to buy than with the markets overbought, negative divergences everywhere… “but if I don’t get in I may miss it!” Don’t forget that Dimon and Blankfein say the market is going higher, and your government says that their “markets” are a great place for your retirement money. Or perhaps I can interest you in a government job, maybe one where you are asked to possibly sacrifice your life for your oil, err, I mean country (of course little Timmy Geithner will “borrow” it to keep the government running, is that okay with you?).

WTI Crude Oil & Base Money:

Hmmm… believe what you want.

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

Jumping the Shark !

      If you are of a certain age , you'll understand the expression. You may recall the episode on Happy Days where " The Fonz" jumps the shark - which over the years has become a part of the lexicon. In short when you jump the shark , you   break from your established norm and just fly off into Never Never Land , so to speak ! Maybe you have felt it - something hasn't felt right , there is a sense the morale compass has been misplaced. My first inkling of the shark being jumped probably came from following the events of the Iraq War ( number two ) , it wasn't so much that we basically invaded Iraq under completely false premises - the jump the shark moment came from the total lack of reaction from the average Joe and Jane to that fact that this had occurred !
     Apart from foreign policy , the idea of investing has jumped the shark as well ! The quaint concept of researching stocks , buying and holding them and benefitting from fundamental growth intrinsic to said companies has become transformed. Markets have become casinos - when the average length that a stock is held has dropped to 22 seconds due to high frequency trading and exotic algo trading program  , we aren't talking about jumping the shark..... we're talking about jumping up and down on that shark ! Investing has become gambling , the rules change during the game and the so called Regulators look the other way when the proverbial " fast one " gets pulled. Ponzi schemes galore , MF Global looting of customer accounts , reality show quality investment programs on mainstream television all lead to the general huckerism - yet once again , the average Joe and Jane snore away ,  not to be concerned.

    So , with this theme as a " jumping off " point ( pun intended ) , let's look at some items of the day !

Hedge funds have been known to use hardball tactics to make money. Now they have come up with a new one: suing Greece in a human rights court to make good on its bond payments.
According to New York Times, the tactic has emerged in conversations with lawyers and hedge funds as it became clear that Greece was considering passing legislation to force all private bondholders to take losses, while exempting the European Central Bank, which is the largest institutional holder of Greek bonds with 50 billion euros or so. ( So says the NYT )
   Is this a jump the shark moment ? At first blush , the answer might seem yes - however , in Europe the approach legally is different than in the US. In that regard , investors may be able to argue that a change in the law by Greece wherein the terms of their bonds are changed ( so that the investors receive less than they are owed ) , actually could be viewed as a property right violation. the kicker being property rights in Europe are viewed as human rights ! Imagine the novel concept of property rights being viewed as human rights being applied in US Courts ! Imagine how investing might change if investors' property rights were treated as human rights - how refreshing might would it be ? Wouldn't that be a boost to the investor psyche if your hard earned funds were treated as human rights when a MF Global steals your allegedly protected accounts ? Wouldn't a Chrysler or GM bondholder have felt better about the system if their rights as bondholders weren't trampled by a manipulation of bankruptcy rules to satisfy  a government agenda ? Wouldn't the average investor feel more secure if he or she believed their face can't get ripped off with impunity - while Regulators looked the other way ? In sum , perhaps property rights should be viewed as an intrinsic human right to salvage investor confidence and vindicate the rule of law.  Let's consider another topic....

And Scene...Kodak Files For Chapter 11 Bankruptcy

   Th headlines tell the grim story - another American Icon bites the dust  , is forced to file bankruptcy and is reduced to monetizing its intellectual property. My question to ponder is why was manufacturing allowed to jump the shark - when did the policy makers decide it was a great move to allow the established norm of american manufacturing leading our global growth , to just wither away ? The death of manufacturing has led to the withering away of former great cities such as Flint and Detroit , has impacted state revenues and employment across the country and has shifted financial strength from the West to Asia . When may this be addressed seriously ? Will it take losing auto manufacturing entirely to China before the eyes of the politicians focus on the hollowing out of America ? When you go to work today , would anyone even comment or notice Kodak has died quietly ? Would it take the death of a Company such as Microsoft to cause the average Joe or Jane to say " There goes the Fonz over the Shark " !  One final item to ponder..... there's that IMF story from yesterday
The Washington-based lender is aiming to increase its resources after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement. The IMF is studying options and will not comment further until it has consulted its members, the fund said. To incorporate a cash buffer, the lender is seeking a total $600 billion.
IMF Managing Director Christine Lagarde said yesterday her staff is looking at ways to expand the fund’s war-chest, which currently has about $385 billion available. While euro-region nations have already pledged to contribute 150 billion euros ($192 billion), the U.S. has said it has no plans to make new bilateral loans and leaders of Group of 20 nations ended last year at odds over the issue.

   If borrowing money to attempt to address a debt problem isn't jumping the proverbial shark , i don't know what is ! But we see the US wildly borrowing like mad , Europe borrowing like mad , the IMF borrowing like mad - just because it hasn't worked up to this point ,  is besides the point. But the incessant borrowing our way collectively into deeper debt has become a global norm - print faster , spend faster , go into debt faster. All things come to an end and the debt party will as well. At some point , folks will realize the shark has been jumped and we shall start on the path to returning to the norm. Pray that day comes before it's too late to salvage what we still have ! 


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.

Absurdity meet Insanity .......

 This would be absurdity .....
And since it has worked once, in the eyes of central planners it should work again, until it fails. Which it naturally will, just like the first LTRO iteration from 2008. But first, it will be expanded to a very ludicrous level, which will lead to the one outcome that Germany wants more than any other - send the euro plunging (remember - the primary correlation of 2012 is the ratio of ECB to FED assets), at least until the Fed steps right back into the currency devaluation fray, which it likely will as soon as March. So just how large will the next LTRO be? "Market talk is focusing on an even bigger amount to be borrowed at the next 3-year longer-term refinancing operation (LTRO) due on 29 February.GREED & fear has heard guesstimates of up to €1tn!" That's right - it is possible that in its quanto monetary diarrhea (but at least it's not printing, so the Bundesbank will be delighted), the ECB is about to increase its balance sheet from €2.7 trillion to € €3.7 trillion, or a €1.7 trillion ($2.2 trillion) expansion in 8 months! And gold is where again?

But here , here my friends comes Insanity ! Again from ZH...

February’s second 3-year LTRO looks set to be extremely large. Really extravagant claims (we have heard reports of €10 tn) are probably wide of the mark because this will not be a complete collateral free-for-all (unless NCBs choose to make it so, which for some of them is admittedly an open question; again, see rational player section below). But the idea of path-finder lightning springs to mind (High-speed cameras reveal that lightning evolves “bang BANG”, essentially); the last LTRO has removed any stigma, making managements who do not exploit the value on offer arguably careless at best. This is, on the face of it, very cheap protection indeed against any possibility of a liquidity crisis for three years.

What to take from this talk ? First , there won't be a 10 trillion LTRO , I hardly believe you see a 1 trillion LTRO either. but that's not really the point. What did we saw happen with the first LTRO of 489 billion  ? Were the billions borrowed by  the banks taking the money at one percent from the ECB  lent to businesses , did we see an increase in lending to each other in the interbank market ? No , what we have seen is an increase of funds deposited at the ECB in exchange for .25 percent interest - the sums at the ECB now exceed 500 billion ? And while the LTRO has allowed sovereigns to sell debt of very short duration , the question remains can they sell debt longer than 5 years , which would fall outside the ambit of the LTRO ? If the banks are as badly fractured as many surmise - zombies desperately trying to patch holes in their balance sheets and roll hundreds of billion in bank debt coming due in 2012  , will providing another 489 / 600 billion change the pattern of hoarding ? I think the answer is no , but let's see what happens Feb  29th when the second LTRO happens.

The real hidden message of someone floating a huge LTRO is that Greece just may be allowed to hit the wall Which means  the banks  ( and pension funds and insurers ) holding Greek , Irish , Portuguese , spanish , Italian , French ( you get the point ) debt are going to get tommy hammered when the default occurs and hard landing becomes reality - thus the LTRO is going to be the bailout to beat all bailouts . Imagine perhaps a trillion to a trillion and one half dispensed to the banks by the LTRO process in just a couple of months  , in just two fell swoops to boot ! Europe will make TARP look like child's play and they also have the ongoing SMP buying spanish , italian and probably irish debt - why should the euro stay over a range 1.10 to 1.20 with such a  level of debasement coming down the line ?

So , as the sums being looted from the taxpayers of europe soar to Mars and austerity is jammed down the throats of the newly poor to pay for this , simply understand things are going to get worse before they truly get worst ..... And that's a wrap !

Suspended Animation as we wait for the Greece fire !

Good morning ! Welcome to the Greece fire ! Another day -  more austerity , more greek families abandoning their children because they simply can't afford to care for them any longer and more greek suicides. Greece has been on a slow walk to hell over the past two years but the end appears to be coming into view - that being the March 20th cliff for the big bond redemptions. It appears clear that as things presently stand , the country can't make the 14.5 billion euros payment due on that date. It doesn't appear that the can to be kicked further ( as the can has been kicked to date. ) It seems unlikely as things stand now that Greece has any further possibilities for movement past a resolution of the bond redemption ( payment ) or default by March 20th. So , where do things stands today ? Let's go around the horn briefly .....

  • From The Telegraph: Greece prepares to give way to banks to secure debt deal
  • From The NYT: Greek Premier Says Creditors May Be Forced to Take Losses
  • From Fredw : Do you believe any of the spin , lies and jibber jabber ? 
  • Taking direct aim at hedge funds and other private holders of Greece’s debt, Prime Minister Lucas Papademos says he will consider legislationforcing the creditors to take losses on their holdings if no agreement can be reached in critical negotiations scheduled to resume Wednesday.

    Now , pay attention to the last point , this is critical to understanding the extent of the problem. PM L-Pap is threatening to seek passage of a law which in essence of a Collective Action Clause which would cram down what could amount to an approximately 70 percent loss on private investors if they don't "eat their peas " by Wednesday.  While the private investors are told to eat their peas , the IMF and ECB want to take nary a loss at all ! And since hedge funds have replaced european ( one exception being  Greek ) banks to a meaningful degree - as far as holding greek debt  ,  there is a serious question as to whether the hedgies will bite on such a deal. 

    Meanwhile , time rolls on , this Friday will be the 20th and it would probably take a good six weeks to complete the debt swap. That assumes a deal can be reached , the hedgies and banks play ball , litigation doesn't ensue and everything else lines up perfectly. In other words , don't hold your  breath ! 

    However , the sad fact remains as long as the ECB and IMF refuse to take losses on the holdings , the private investors would need to take a 100 percent loss to give Greece meaningful relief - have we heard any noises from the ECB or IMF that they will truly help Greece ? Of course not - so , while the focus remains on the private debt swap , just consider that without ECB and IMF participation at the same level as the private investors , Greece will still take it in the pants .

Tuesday, January 17, 2012

Morning Update/ Market Thread 1/17 - Meet the New Boss, Same as the Old Money Grubbing Boss…

Good Morning,

Equity futures are higher this morning despite S&P downgrades for France, the European Bailout Bozos, and much the rest of Europe. Of course it means the math gets worse with higher interest rates which deepens the spiral of impossible math, more printing, even more impossible math and so on… each event quickening the pace of events. Phony bond auctions where “success” is due to the creation of money to make them “successful” leads only to higher numbers for the things people on the planet need to live.

Equities are thus higher, bonds are close to even, the dollar is weaker, oil is back over $100, and food commodities are higher too. Notice how the weekends are used to ramp over resistance? Complete control by those who make money from nothing, own the exchanges, and use that money to create an artificial marketplace designed to suck in the productivity of people who are truly productive, unlike them.

The “Fed’s” Empire State Manufacturing Index picked up to 13.48 in January, up from 9.53, and thus beating expectations. Here’s the spin from Econocomplicit:
Manufacturing activity in the New York region is picking up nicely so far this month with growth back at a healthy hum. The Empire State index rose more than 5 points to 13.48 with the 6-month outlook up nearly 10 points to 54.87. Levels, after sinking in an 8-month hole, are now back where they were during the first half of last year.

Details show strength in new orders and, in a stand out result, strength in employment. Shipments are strong and inventories are being rebuilt. Contraction in delivery time points to plenty of spare capacity to be drawn on should activity continue to pick up steam. Negatives in the report are continuing declines in the sample's backlog orders and a jump higher in the cost of inputs, one that's likely tied to rising energy prices. But today's report is on balance very positive and, in what is the calendar's first look at January, points to building momentum for the manufacturing sector.

Oh, is manufacturing still a sector in our economy? I nearly forgot as it’s so small it’s hardly worth mention, unless you like counting military hardware and hamburgers.

Of course all of Europe and much of the developing world are re-entering recession as austerity is foisted upon them while trillions are funneled to the bankers. Here in the U.S., we are just liars and self-delusional Prozac junkies unable to acknowledge reality. The talk here is that the economy is “growing” and looking up, LOL. And if that’s true, then why, oh why, is the BDI sliding into the Abyss, Part III?


BDI Recent:

Oh yeah, manufacturing is growing, sure. That’s why shipping rates are plummeting.

It’s a so-so week for economic data, we’ll see CPI and Existing Home Sales later in the week. It seems the sport has become watching the size of the auctions and overnight deposits grow, like the record setting 501.9 billion Euros the ECB took in last night.

Bill Still sees reality for what it is and gives a good lesson in how those who create money from nothing use that money to buy both sides of the political spectrum, thus completely capturing our government! This is exactly why nothing will change until other events force the people to separate money from politics. Good video Bill!

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

Monday, January 16, 2012

Changes at Economic Edge…

It’s my privilege to introduce a new writer to Economic Edge, FredW, who will now be making regular contributions to this site. Fred keeps a very level keel about him while gathering pertinent information from around the globe and commenting on its relevance. He has provided that service for me for quite some time, even prior to becoming a regular commenter here. I trust and respect his judgment, I value his opinion and his time, and think his updates provide a valuable service that you’ll appreciate as well.

Fred has been in the legal profession for many years, primarily taking on cases where he feels he is helping others, and I know that is what motivates him to do this as well. Working by day, look for Fred’s posts to come fast and furious in the early morning hours, some evenings, and on weekends. His inputs will make Economic Edge the go to place to stay abreast of REAL economic news and world events!

I’ll keep making posts as able, and will use the morning post as the Daily Market Thread. On days I’m not able to post the Market Thread, Fred will designate one of his posts for the day’s running commentary. Please feel free to comment on other posts as well, we ask that you please try to keep comments pertinent to the post, otherwise post all other comments inside of the Daily Market Thread.

Please give Fred a big welcome and be sure to thank him for his time!