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Meaningless Monday Market Movement

OECD graphWhy are you here?

I'm not even here, I'm in Paris – it's a holdiay, you know…  Americans work way too hard, we don't take enough vacations.  America is the ONLY country in the OECD that doesn't have any mandated paid vacations and everyone else, other than Japan, takes AT LEAST 20 days off during the year with France at 31.  Not only that but the average Parisiene works 40 hours on weeks they do show up while American workers tend to work 47 hours a week.

The really strange thing about this is that America is also the only country where time off is trending DOWN, not up.  What's all this talk about automation if we still have to show up for work every day?  After making steady progress to about 20.3 days off through 1998, the twin economic upeheavals of 2001 and 2008 dropped the average US vacation time to 16.2 days, that's including our 5 public holidays!  

americanslostworkweek

The short story is, Americans are generally terrified of losing their jobs so they don't even take the days off they are entitled to. Yes, our Per Capita GDP of $57,000 blows France's $42,000 out of the water but I don't think you'd find many people here who would trade their lifestyles for an extra $13,000 (and all that extra money we make goes towards paying for Health Care and College anyway).  

Anyway, American's REALLY don't want to get into the GDP measuring game as we fall very far short of other vacation champs like Norway and Ireland ($69,000), Singapore ($87,000), Luxemboug ($104,000) and Qatar ($127,000) and no wonder everyone is jealous of them, right?    Luxemborg requires workers to be paid 70% more to work on Sundays and strictly limits the work-week to 40 hours with a minimum of 25 paid vacation days AND 10 public holidays.  

Résultat de recherche d'images pour "us productivity wages"Less vacation time is simply another way the Capitalists steal from the workers.  As you can see from the chart on the left, more productivity meant more wages until the 70s and, as noted above, that was also the era of peak vacation time for US workers.  Since that time, Productivity has continued to grow at the same pace only wages have failed to keep up (in other words, the Corporations no longer share profits) and vacation time has dropped 20% as well.

The real quesiton is "Why do Americans put up with this kind of BS?"  What is wrong with American workers that they simply don't stand up for themselves.  How is it they have been convinced that making the elites ever richer will somehow benefit the average worker?  Clearly it has not.  Wages have stagnated for 40 years while Corporate Profits are up 150% and, as we noted last week, Corporations pay just 10% of all taxes collected in the US while in Europe it's closer to 20%, as Corporations pay a VAT for their consumption of finished goods as well.

That 10% means a lot, in the US, it would be another $300Bn – halfway to balancing the budget.  France has a budget defict of $84Bn, which has been cut in half since 2009 and is on track to drop to $40Bn or less over the next 2 years.  Our budget defict will climb from $440Bn to $1.5Tn PER YEAR if Trump passes his tax plan.  The US spends $4Tn out of a $20Tn GDP (20%) the French Government spends $1Tn out of $2.5Tn (40%) – the French may pay more taxes – but they get a lot more back.

Image associée

Health care if free, college is free at the bottom with top schools capped at 10,000 Euros ($12,000), public transportation is plentiful, pensions are generous and the social safety net is wide and strong.  In the US, because we are denied these benefits – you MUST work much harder than a French person to have the same lifestyle – that's no reason to crow about having a better GDP per capita.  As inconcievable as it may be to a lot of Americans – Europeans don't want your lifestyle and you probably wouldn't either if you realized you had a choice!  

Résultat de recherche d'images pour "greenspan tom tomorrow philstockworld"Choices will be made at this week's G20 summit in Hamburg and Trump is heading off to Europe while putting pressure on relations with Japan and China over North Korea which seems like he's winning Putin's bet that he can't piss off the entire World at the same time.  Abe lost a key election this weekend and his party has been weakened as Abenomice (ie. QExtreme) is coming off the rails.  Alan Greenspan thinks our Fed has done too little, too late and that we are "entering a very tough period of Stagflation."  

“The short term outlook begins to look sort of slightly buoyant, because the inflation actually moves profitability, and you get a sense that maybe things are over. But that’s going to be a false dawn.”

“We’ve been through this period before of stagflation, back in the 1970s, and it’s going to be very tough to get our way beyond it.”

The action today will be essentially meaningless but we do want to grab Silver (/SI) long at $16.50 again and Natural Gas (/NG) at $2.95 (/NGV7 is our preferred contract) – tight stops below should keep us out of trouble and they are both great stagflation plays.  

Now get out of here – it's a holiday!  

 


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  1. Big U.S. Funds Aren’t Buying the European Recovery Story






  2. The Republican healthcare bill defies the party’s own ideology


  3. Cruella de Trump




  4. Craigs – "Nat – that last chart you posted about oil squeeze had no info as to what each line was and didn't make sense without know what the different color lines meant or what the scale is that is being measured? Can you enlighten us with what we are seeing on that particular chart?"

    Reading the paragraph with the chart…

    Muck – "Some selloff last few minutes… very interesting. 

    Notice what oil did into and after close? Again, liquidating tech stocks to cover their oil shorts. Evidenced in this chart where they got furious from 3PM EST on.

    WTI CRUDE, that's the line going UP gaining because people who went short are getting squeezed as the price rises. Those shorts are having to cover their margins and buy the contract.  How are they doing that? To raise the money they are liquidating TECH stocks , which is the line going DOWN, to BUY those OIL contracts.  Again, NOTE THE TIMING, coincidence? Invoke Gibbs Rule 39. https://www.tradingview.com/x/eMqy0hSl/


  5. Stocky – Hobson hillarious!!


  6. Phil – With time comes understanding and appreciation, this comes to mind.  

    FYI – Although, this famous burlesque routine was performed by:

    The Three Stooges in the movie Gents Without Cents (1944)
    Abbott and Costello in the movie Lost in a Harem (1944)
    Lucille Ball in the TV show I Love Lucy (1951), Season #1, Episode #19 ("The Ballet")
    Abbott and Costello on TV in The Abbott and Costello Show (1952–1953)

    it is alleged that Samuel Goldman or Joey Faye originated it. However, it was Harry Steppe that penned "Pokomoko" and performed it with the Stooges. Steppe also wrote for Phil Silvers and Abbott and Costello.  Being one of Bud Abbott's first partners, Harry introduced Bud to Lou Costello in 1934.

    Happy 4th everybody and enjoy.


  7. thanks nat that was great


  8. Good morning.

    Got to Disney but wifi is terrible. Will try to check in a bit later from a better spot.

    Europe is flat, don’t see much happening in our markets on a half day.


  9. Good Morning.


  10. Pretty big sell off so far in the metals this morning.


  11. go gnc!! Go LB!! Go GILD!! 

    FU FTR!!!

    FU TSLA!!!!


  12. Phil / Paris….Relax!,  enjoy your trip…..


  13. Disney up strong today.  Phil must be spending some big bucks !


  14. Nat or anyone up to speed on currency trades- recently spoke to a Forex trader I know and he is looking for a stronger Euro. He trades the currency pairs but suggest for non- Forex- selling FXE puts on any pull back. Also, selling calls on UUP. 

    Any comment? 


  15. Phil – Chill

    /CL up to 46.72  Condensed from Fri-Sat post… 

    My spider sense says weaker shorts took profits, to flush the die hard shorts? The last dip (52.22 down to 42.05 = 10.17);  a potential 50% retrace to $47.13; or .618 = $48.26; or .763 (1 – .236) = $49.81.

    Last two bounces were approx 12-14 trading day duration, we are at 7 in the current bounce.?  FYI, .763 was the retrace on the last dip

    Currently, approaching 50% level, probably looking for more "gas in the tank" to advance, pun intended. Stronger shorts (read men of conviction like Phil) are harder to squeeze or flush out. That impetus could arrive by Wacky Wend, depending on the number of shorts who won't back down.

    Closer review of daily chart indicates low to high cycle of 15 -16 trading days in the last two dips, currently on day 9 since the recent low. IF the cycle PLAYS out, then July 12th or 13th. That not uncommon "unwind" aka Wacky Wend, is one week in advance of Thur July 20th settlement of the Aug contract.

    As of Friday 6/30 close OI is 517,659M of fake WTI barrels.  On NYMEX as of 06/27 COTS there are a total (combined options and futures) of 403,392 commercials net short, that's quite a few and Out.


  16. Closer review of daily chart indicates low to high cycle of 15 -16 trading days in the last two dips

    that should read last two bounces after the dips….


  17. quiet day here…

     

    happy 4th PSW!


  18. Well, that's interesting with the NASDAQ down and everybody else up.   Well, that's interesting with the NASDAQ down and everybody else up. 

    DIS/Alba – Big bucks doesn't begin to cover it!  Everything here is ridiculously priced.    I'm glad we're only here for two days and then we head to the four seasons where we can get cheaper breakfasts i'm glad we're only here for two days and then we head to the four seasons where we can get cheaper breakfasts.  

    On the bright side though, I already got some business done.   I meant a lawyer from Belgium who just so happens to have the right expertise for a project PSW Investments is working on.   


  19. Best first sentence of a post by Phil – why are you here???  I don't know – so I am outta here – Happy 4th!


  20. Pstas – "Nat or anyone up to speed on currency trades- recently spoke to a Forex trader I know and he is looking for a stronger Euro."

    In the case of UST, primary dealers are required to absorb a certain amount of issuance. With MBS its open season. In either case, somebody buy's them or they sit.  Why is he Nattering about bonds??? Hush, hush my sweet Charlotte…

    Trebek: what happens when your biggest bond customer STOPS rolling over their bond and MBS purchases to the tune of $10B a month and intends to ramp that GAP up to $50B a month? 

    Answer: what is a larger float of available bonds for others to purchase and perhaps less bond purchases.

    Bottom line, under normal circumstances when bonds get bought, that sucks dollars out of circulation. Less dollars, higher dollar. Now consider the answer above, then reverse the last statement.

    When taking QT (quantitative tightening) be mindful of deleterious side effects, open market effects can include rising yields and lower bond prices, viz. higher cost of loan funds and operating costs, reducing profits and cash flow.

    In addition to rate diarrhea, economic capital choking may occur. Fed purchases consume "idle" dollars, however, bank and private purchases consume dollars which might have been used for other productive purposes, loans for investment in expansion and new activity. Diminished potential GDP.

    Beware of balance sheet constriction and angina. Depending who steps up and if they do, in the case of dealers and commercial banks, precious balance sheet capacity gets squeezed. viz.  liquidity and ability to PPT elsewhere will suffer, and perhaps other holdings might have to be liquidated?  More dollars.

    Ask you doctor if QT is right for you.  What is that large whooshing and snap crackle pop sound in the distance? Transference from the accretion disk to the event horizon and Out.  More details in History Repeating?,  Fed Devil In The Details? and Coffee, Crude Tea or Me?


  21. Phil – All up, Nasdaq down – more leveraged tech unwinding to cover those oil shorts.  Scary that tech has been where our two legged dog of a zombie economy, actually has been making a buck or two and Out.


  22.  And now the sailing begins. Will be funny if we end up flat.  


  23. die TSLA!!!!


  24.  phil. SI. With it well below 16.5 is it not safe to go long until it climbs back to that level?


  25.  If you didn't lose too much money, I would play silver again –  I would think somewhere between here and $15 it finally turns around. 

     Looks like the S&P failed again at 2440.    

     Natural gas took a round trip as well.   That's always good at $2.95.  

    Well, back to my vacation.

    Have a happy holiday everybody!

    - Phil 


  26. Hope you have a great vacation Phil!


  27. Happy holiday everyone





  28. New Jersey Lawmakers Strike Deal to End Budget Impasse


  29. ExxonMobil has a secret weapon against electric cars



  30. Detroit automakers’ sales dip, drag industry down


  31. Construction spending flat in May








  32. Republican Voters Blame Congress For Lack of Progress


  33. London/ Phil

    Hi Phil – Are you going to be in London this week?  Are you catching up with any PSW members?

    Thanks


  34. The mispricing of late PM on July 3, 2017 from the data feeders to NASDQ was fully used by TOS to account for our P/L….spooky and a bad nights sleep !! How can they just blindly accept this information?



  35. StJL – You are on the frequency, tuned into the wavelength, brother from another mother.

    As they and Jabo might say FU DRONES.  And now for a moment of ZEN….

    Such blue sky, such pretty clouds, it's a beautiful day? 

    Some people will never look at the sky, the same way again. How fucked up is that?

    When children or anyone, can't look up at the sky in amazement, rather than mortal fear…

    It's an upside down, sh*t cake, f-hole, take it in the arse hard, craptacular extravaganza, that needs to either come to terms with itself, and peace for all, or a miserable end.  Pun intended.

    While your looking up at those fireworks and wondering, Happy Fourth of July and this.   Out.



  36. Jim Chanos is not very optimistic:

    https://www.ineteconomics.org/perspectives/blog/jim-chanos-u-s-economy-is-worse-than-you-think

    Unlike other short sellers, he is not one to talk about 50% crashes so I am more confident in his analysis.


  37. Our healthcare is so screwed and we are going to make it worse – single payer please…

    http://www.visualcapitalist.com/u-s-spends-public-money-healthcare-sweden-canada/


  38. TECHY    somebody's FU today, not mine tough


  39. Good morning!

    Travel day so I'll be back on a bit after the market opens – if all goes well.  Taking the bullet train to London, so that should be fun.

    As noted last week, my best two days to meet up with people from London will be tomorrow and Friday around lunch at the 4 Seasons (Trinity Square) as I will be working later than that, so let me know if you will be around.

    Europe has been flattish while our markets did their silliness on Monday, the Nas action was very concerning, overall.

    But, if I wanted to pick a long, /NQ above 5,575 (tight stops below) for the bounce is the way to go.  Bounces should be even to 5,600 (weak) and 5,625 (strong) but any trouble at weak is a good indication to take $500 and run.

    On the whole, /NKD holds 20K, which is bullish for them but Dollar recovery helped a lot.

    Oil still holding up but watch for Brent to fail at $50 – over $50 on Brent is very bullish but still all about OPEC:

    Russia Said to Oppose Any Move to Deepen OPEC Cuts at July TalksRussia wants to stick to the current OPEC deal and would oppose any proposal for deeper production cuts at the group’s ministerial meeting later this month, said four Russian government officials. Any further supply reductions so soon after the existing agreement was extended would send the wrong message to the oil market, said one of the people. Such a move would suggest that OPEC, Russia and their allies are nervous that their pact to reduce output by a combined 1.8 million barrels a day through March 2018 isn’t doing enough to support prices, the official said. All four people spoke on condition of anonymity.

    Nobody wants gold or silver at the moment but I like them:

     Dollar back at 96:

    North Korea Launches Its First Ever ICBM, "Can Reach Alaska"

    Nasdaq Triggers Market-Wide Circuit-Breaker As AMZN(AMZN) "Crashes" 87% After-Hours

    The Best And Worst Performing Assets In The First Half Of 2017

    Havens Advance as Missile Test Rattles TradersA risk-off mood settled over markets on Tuesday, with haven assets including gold and the Japanese yen climbing and stocks slipping in the wake of an apparent milestone in North Korea’s weapons program. Early market optimism in Asia — sparked by bullish American economic data yesterday — gave way after North Korea said it successfully test-fired an intercontinental ballistic missile, moving the state closer to its goal of building a device capable of hitting the continental U.S. Gold headed for its first advance in four days. European stocks edged lower as miners rallied but telecom and utility shares dropped. Oil fluctuated between gains and losses.

    China's $162 Billion of Dealmaker Debt Raises AlarmChina struck deal after deal to acquire companies abroad over the last few years. Now the bill is coming due. The nation’s top corporate dealmakers, including HNA Group Co. and Fosun International Ltd., must pay off the equivalent of at least $11.5 billion in bonds and loans by the end of 2018 — a feat now complicated by government efforts to rein in their aggressive rush overseas.

    ECB's `Flexible' QE Model Falls Short on German Bond PurchasesEuropean Central Bank data showed it fell short of its target for purchases of German bonds under its quantitative-easing program for a third straight month in June, while favoring French and Italian securities as it combats a shortage in the euro region’s benchmark sovereign debt. The ECB fell short of its implied buying target, as dictated by the capital key, by 304 million euros ($345 million) last month, following a shortfall of 277 million euros in May, while the weighted average maturity rose to 5.33 years from a record-low 3.99 years in May.

    Macron's Premier Says France Must Break Spending Addiction. Prime Minister Edouard Philippe said France must break the addiction to public spending that has left its economy trailing peers as he outlined plans to rein in the budget and cut taxes. In his maiden speech at the National Assembly as premier, Philippe promised 20 billion euros ($23 billion) of tax cuts by the end of President Emmanuel Macron’s term in 2022. Spending will drop by the equivalent of 3 percentage points of gross domestic product in that time and taxation will fall by 1 point, he said. “We must face the truth about the financial situation of the country,” Philippe said. “France can no longer be the champion of both public spending and of taxes. France has an addiction to public spending, and like all addictions it requires willpower and courage to kick it.”

    Citi's Sentiment Indicator Crashes, And Four Other Things That Scare The Bank

    Georgia Sec. Of State Blasts "Fake News"; Says Media Biggest Threat To Democracy Not Russian Hackers

    Carmageddon: Record Incentives And Financing Terms Fail To Stem The Auto Bleeding In June

    Undercover Investigation Exposes Deteriorating Auto Lending Standards In Europe; No Job, No Problem

    Tesla(TSLA) deliveries lackluster in second quarter, but all eyes are on Model 3

    Robots are coming to a burger joint near you

    Why Apple(AAPL) shares are going ‘much higher,’ according to analyst Gene Munster